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OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
Depositor
OPTION ONE MORTGAGE CORPORATION,
Originator and Master Servicer
FEDERAL HOME LOAN MORTGAGE CORPORATION,
Guarantor (with respect to the Class A-1 Certificates
and the Class S-1 Certificates)
and
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2002
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Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates, Series 2002-5
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms...................................................................................7
SECTION 1.02. Accounting.....................................................................................64
SECTION 1.03. Allocation of Certain Interest Shortfalls......................................................64
SECTION 1.04. Rights of the NIMS Insurer and the Guarantor...................................................65
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans...................................................................67
SECTION 2.02. Acceptance of REMIC 1 by Trustee...............................................................70
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the Originator.................................72
SECTION 2.04. Representations and Warranties of the Originator with Respect to the
Mortgage Loans.................................................................................75
SECTION 2.05. Representations, Warranties and Covenants of the Master Servicer...............................76
SECTION 2.06. Representations and Warranties of the Depositor................................................79
SECTION 2.07. Representations and Warranties of the Originator...............................................80
SECTION 2.08. Covenants of the Originator....................................................................83
SECTION 2.09. Negative Covenants of the Trustee and the Master Servicer......................................83
SECTION 2.10. Conveyance of the Subsequent Mortgage Loans....................................................83
SECTION 2.11. Conveyance of REMIC Regular Interests and Acceptance of REMIC 2 and
REMIC 3 by the Trustee; Issuance of Certificates...............................................88
SECTION 2.12. Issuance of Certificates.......................................................................90
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Master Servicer to Act as Master Servicer......................................................91
SECTION 3.02. Sub-Servicing Agreements Between Master Servicer and Sub-Servicers.............................93
SECTION 3.03. Successor Sub-Servicers........................................................................94
SECTION 3.04. Liability of the Master Servicer...............................................................95
SECTION 3.05. No Contractual Relationship Between Sub-Servicers and the Guarantor, the
NIMS Insurer, the Trustee or Certificateholders................................................95
SECTION 3.06. Assumption or Termination of Sub-Servicing Agreements by Trustee...............................95
SECTION 3.07. Collection of Certain Mortgage Loan Payments...................................................96
SECTION 3.08. Sub-Servicing Accounts.........................................................................97
SECTION 3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts.........................97
i
SECTION 3.10. Collection Account, Initial Deposit Accounts and Distribution Account..........................98
SECTION 3.11. Withdrawals from the Collection Account and Distribution Account..............................101
SECTION 3.12. Investment of Funds in the Interest Coverage Accounts, Collection Account,
Initial Deposit Accounts and the Distribution Account.........................................103
SECTION 3.13. [Reserved]....................................................................................105
SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
Coverage......................................................................................105
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................107
SECTION 3.16. Realization Upon Defaulted Mortgage Loans.....................................................108
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files...............................................110
SECTION 3.18. Servicing Compensation........................................................................112
SECTION 3.19. Reports to the Trustee; Collection Account Statements.........................................113
SECTION 3.20. Statement as to Compliance....................................................................113
SECTION 3.21. Independent Public Accountants' Servicing Report..............................................113
SECTION 3.22. Access to Certain Documentation; Filing of Reports by Trustee.................................114
SECTION 3.23. Title, Management and Disposition of REO Property.............................................116
SECTION 3.24. Obligations of the Master Servicer in Respect of Prepayment Interest
Shortfalls...........................................................................119
SECTION 3.25. Convertible Mortgage Loans....................................................................119
SECTION 3.26. Obligations of the Master Servicer in Respect of Mortgage Rates and
Monthly Payments..............................................................................120
SECTION 3.27. Solicitations.................................................................................120
SECTION 3.28. Net WAC Rate Carryover Reserve Account........................................................120
SECTION 3.29. Advance Facility..............................................................................122
SECTION 3.30. Reports of Foreclosure and Abandonment of Mortgaged Properties................................123
SECTION 3.31. Notification of Adjustments...................................................................123
SECTION 3.32. Excess Net WAC Rate Reserve Fund..............................................................123
ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions.................................................................................126
SECTION 4.02. The Guarantee.................................................................................132
SECTION 4.03. Statements....................................................................................132
SECTION 4.04. Remittance Reports; Advances..................................................................136
SECTION 4.05. Pre-Funding Accounts..........................................................................138
SECTION 4.06. Interest Coverage Accounts....................................................................140
SECTION 4.07. Distributions on the REMIC Regular Interests..................................................141
SECTION 4.08. Allocation of Realized Losses.................................................................144
SECTION 4.09. The Trustee Remittance Report.................................................................145
SECTION 4.10. Loan Data Remittance Report...................................................................146
SECTION 4.11. Compliance with Withholding...................................................................147
ARTICLE V
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THE CERTIFICATES
SECTION 5.01. The Certificates..............................................................................148
SECTION 5.02. Registration of Transfer and Exchange of Certificates.........................................148
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............................................154
SECTION 5.04. Persons Deemed Owners.........................................................................154
SECTION 5.05. Appointment of Paying Agent...................................................................154
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Originator, the Master Servicer and the Depositor............................155
SECTION 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the
Originator, the Master Servicer or the Depositor..............................................155
SECTION 6.03. Indemnification; Limitation on Liability of the Master Servicer and Others....................155
SECTION 6.04. Master Servicer Not to Resign.................................................................157
SECTION 6.05. Delegation of Duties..........................................................................157
SECTION 6.06. [Reserved]....................................................................................158
SECTION 6.07. Inspection....................................................................................158
ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of Termination.........................................................159
SECTION 7.02. Trustee to Act; Appointment of Successor......................................................161
SECTION 7.03. Waiver of Defaults............................................................................162
SECTION 7.04. Notification to Certificateholders............................................................163
SECTION 7.05. Survivability of Master Servicer Liabilities..................................................163
SECTION 7.06. Rights of the Guarantor to Exercise Rights of Class A-1 Certificateholders....................163
SECTION 7.07. Trustee to Act Solely with Consent of the Guarantor...........................................164
SECTION 7.08. Mortgage Loans, Trust Fund and Accounts Held for Benefit of the
Guarantor............................................................................164
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee.............................................................................166
SECTION 8.02. Certain Matters Affecting the Trustee.........................................................167
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.........................................169
SECTION 8.04. Trustee May Own Certificates..................................................................169
SECTION 8.05. Trustee Fee and Expenses......................................................................170
SECTION 8.06. Eligibility Requirements for Trustee..........................................................170
SECTION 8.07. Resignation or Removal of Trustee.............................................................170
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SECTION 8.08. Successor Trustee.............................................................................172
SECTION 8.09. Merger or Consolidation of Trustee............................................................172
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.................................................172
SECTION 8.11. Limitation of Liability.......................................................................174
SECTION 8.12. Trustee May Enforce Claims Without Possession of Certificates.................................174
SECTION 8.13. Suits for Enforcement.........................................................................175
SECTION 8.14. Waiver of Bond Requirement....................................................................175
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal Requirement.....................................175
ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration..........................................................................176
SECTION 9.02. Prohibited Transactions and Activities........................................................178
SECTION 9.03. Indemnification with Respect to Certain Taxes and Loss of REMIC Status........................178
ARTICLE X
TERMINATION
SECTION 10.01. Termination..........................................................................180
SECTION 10.02. Additional Termination Requirements..................................................182
SECTION 10.03. Tax Indemnification..................................................................183
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment............................................................................184
SECTION 11.02. Recordation of Agreement; Counterparts...............................................185
SECTION 11.03. Limitation on Rights of Certificateholders...........................................185
SECTION 11.04. Governing Law; Jurisdiction..........................................................186
SECTION 11.05. Notices..............................................................................186
SECTION 11.06. Severability of Provisions...........................................................187
SECTION 11.07. Article and Section References.......................................................187
SECTION 11.08. Notice to the Rating Agencies, the Guarantor and the NIMS Insurer....................187
SECTION 11.09. Further Assurances...................................................................188
SECTION 11.10. Third Party Rights...................................................................189
SECTION 11.11. Benefits of Agreement................................................................189
SECTION 11.12. Acts of Certificateholders...........................................................189
SECTION 11.13 No Petition..........................................................................189
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EXHIBITS:
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit A-3 Form of Class S-1 Certificates
Exhibit A-4 Form of Class S-2 Certificates
Exhibit A-5 Form of Class M-1 Certificates
Exhibit A-6 Form of Class M-2 Certificates
Exhibit A-7 Form of Class M-3 Certificates
Exhibit A-8 Form of Class M-4 Certificates
Exhibit A-9 Form of Class B Certificates
Exhibit A-10 Form of Class C Certificates
Exhibit A-11 Form of Class P Certificates
Exhibit A-12 Form of Class R Certificates
Exhibit A-13 Form of Class R-X Certificates
Exhibit B [Reserved]
Exhibit C Form of Mortgage Loan Purchase Agreements
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 Residual Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Form of ERISA Representation Letter
Exhibit N Form of Liquidation Report
Exhibit O Option One Mortgage Corporation Underwriting Guidelines
Exhibit P Form of Loan Data Remittance Report
Exhibit Q Form of Trustee's Remittance Report
Exhibit R Form of Subsequent Transfer Instrument
Exhibit S Form of Addition Notice
Exhibit T Form of Special Sub-Servicing Agreement
Schedule I Prepayment Charge Schedule
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This Pooling and Servicing Agreement is dated as of July 1,
2002 (the "Agreement"), among OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as
depositor (the "Depositor"), OPTION ONE MORTGAGE CORPORATION, as originator (in
such capacity, the "Originator") and master servicer (in such capacity, the
"Master Servicer"), FEDERAL HOME LOAN MORTGAGE CORPORATION, as Guarantor of the
Class A-1 Certificates and the Class S-1 Certificates (the "Guarantor") and
▇▇▇▇▇ 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 thirteen
classes of certificates, designated as (i) the Class A-1 Certificates, (ii) the
Class A-2 Certificates, (iii) the Class S-1 Certificates, (iv) the Class S-2
Certificates, (v) the Class M-1 Certificates, (vi) the Class M-2 Certificates,
(vii) the Class M-3 Certificates, (viii) the Class M-4 Certificates, (ix) the
Class B Certificates, (x) the Class P Certificates, (xi) the Class C
Certificates, (xii) the Class R Certificates and (xiii) the Class R-X
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 Group I Mortgage Loans, the Group II
Mortgage Loans and certain other related assets subject to this Agreement (but
exclusive of the Pre-Funding Accounts, the Interest Coverage Accounts, the
Initial Deposit Accounts, the Net WAC Rate Carryover Reserve Account, the Excess
Net WAC Rate Reserve Fund 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)
----------- ----------------- ----------------- ----------------
LT1 Variable(2) $243,779,098.42 October 25, 2032
LT1-PF Variable(2) $ 93,720,801.58 October 25, 2032
LT2 Variable(2) $166,683,261.09 October 25, 2032
LT2-PF Variable(2) $ 58,316,738.91 October 25, 2032
LT-S1 Variable(2) $ 37,500,000.00 October 25, 2032
LT-S2 Variable(2) $ 25,000,000.00 October 25, ▇▇▇▇
▇▇-▇ Variable(2) $ 100.00 October 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.
2
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)
----------- ----------------- ----------------- ----------------
MT-AA Variable(2) $612,499,902.00 October 25, 2032
MT-A1 Variable(2) $ 3,037,500.00 October 25, 2032
MT-A2 Variable(2) $ 2,025,000.00 October 25, 2032
MT-M1 Variable(2) $ 406,250.00 October 25, 2032
MT-M2 Variable(2) $ 343,750.00 October 25, 2032
MT-M3 Variable(2) $ 203,120.00 October 25, 2032
MT-M4 Variable(2) $ 93,750.00 October 25, 2032
MT-B Variable(2) $ 109,380.00 October 25, 2032
MT-ZZ Variable(2)) $ 6,281,248.00 October 25, 2032
MT-S1(1) Variable(2) N/A(3) October 25, 2032
MT-S1(2) Variable(2) N/A(3) October 25, 2032
MT-S1(3) Variable(2) N/A(3) October 25, 2032
MT-S2(1) Variable(2) N/A(3) October 25, 2032
MT-S2(2) Variable(2) N/A(3) October 25, 2032
MT-S2(3) Variable(2) N/A(3) October 25, 2032
MT-P Variable(2) $ 100.00 October 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 Interests MT-SI(1), MT-S1(2) and MT-S1(3) will not have
Uncertificated Principal Balances, but will accrue interest on their
Uncertificated Notional Amounts outstanding from time to time which
shall each equal the Uncertificated Principal Balance of REMIC 1
Regular Interest LT-S1. REMIC 2 Regular Interests MT-S2(1), MT-S2(2)
and MT-S2(3) will not have Uncertificated Principal Balances, but will
accrue interest on their Uncertificated Notional Amounts outstanding
from time to time which shall each equal the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT-S2.
3
REMIC 3
-------
As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the REMIC 2 Regular Interests
as a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC 3." The Class R-3 Interest represents the sole
class of "residual interests" in REMIC 3 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for each Class of Certificates that represents one or more of the "regular
interests" in REMIC 3 created hereunder:
Original Class
Pass-Through Certificate Principal Assumed Final
Class Designation Rate Balance Maturity Date(1)
----------------- ---- ------- ----------------
Class A-1.................... Variable(2) $303,750,000.00 October 25, 2032
Class A-2.................... Variable(2) $202,500,000.00 October 25, 2032
Class S-1.................... N/A(3) N/A(3) October 25, 2032
Class S-2.................... N/A(3) N/A(3) October 25, 2032
Class M-1.................... Variable(2) $ 40,625,000.00 October 25, 2032
Class M-2.................... Variable(2) $ 34,375,000.00 October 25, 2032
Class M-3.................... Variable(2) $ 20,312,000.00 October 25, 2032
Class M-4.................... Variable(2) $ 9,375,000.00 October 25, 2032
Class B...................... Variable(2) $ 10,938,000.00 October 25, 2032
Class C Interest............. Variable(2) $ 3,124,900.00(4) October 25, 2032
Class P Interest............. N/A(5) $ 100.00 October 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-1 Certificates will receive all amounts distributed to
REMIC 2 Regular Interests MT-S1(1), MT- S1(2) and MT-S1(3) and the
Class S-2 Certificates will receive all amounts distributed to REMIC 2
Regular Interests MT-S2(1), MT-S2(2) and MT-S2(3).
(4) The Class C Interest will accrue interest at their variable
Pass-Through Rate on the Notional Amount of the Class C Interest
outstanding from time to time which shall equal the aggregate of the
Uncertificated Principal Balances of the REMIC 2 Regular Interests. The
Class C Interest will not accrue interest on its Certificate Principal
Balance. The Class C Interest will also be entitled to the Subsequent
Mortgage Loan Interest, as a right with respect to a component of the
Class C Interest 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 Interest will not accrue interest.
4
REMIC 4
-------
As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the Class C Interest as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC 4." The Class R-4 Interest represents the sole class of
"residual interests" in REMIC 4 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the indicated Class of Certificates that represents a "regular interest" in
REMIC 4 created hereunder:
Initial Aggregate
Certificate Principal Latest Possible
Class Designation Pass-Through Rate Balance Maturity Date(1)
----------------- ----------------- ------- ----------------
Class C Certificates Variable(2) $3,124,900.00 October 25, 2032
_______________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loans with the latest maturity date has been
designated as the "latest possible maturity date" for the Class C
Certificates.
(2) The Class C Certificates will receive 100% of amounts received in
respect of the Class C Interest.
5
REMIC 5
-------
As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the Class P Interest as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC 5." The Class R-5 Interest represents the sole class of
"residual interests" in REMIC 5 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the indicated Class of Certificates that represents a "regular interest" in
REMIC 5 created hereunder:
Initial Aggregate
Certificate Principal Latest Possible
Class Designation Pass-Through Rate Balance Maturity Date(1)
----------------- ----------------- ------- ----------------
Class P Certificates N/A(2) $ 100.00 October 25, 2032
_______________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity
date for the Mortgage Loans with the latest maturity date has been
designated as the "latest possible maturity date" for the Class P
Certificates.
(2) The Class P Certificates will receive 100% of amounts received in
respect of the Class P 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 Residual
Certificates are not entitled to distributions in respect of interest and,
accordingly, will not accrue interest.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either of the Collection Account and Distribution
Account.
"Accrual Period": With respect to the Class A Certificates and
the Mezzanine Certificates (other than the Class B 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, the Class B Certificates, the Class C Certificates and
any Definitive 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 2.10, 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 S.
"Adjustable Rate Mortgage Loan": A first lien Mortgage Loan
which provides at any period during the life of such loan for the adjustment of
the Mortgage Rate payable in respect thereto. The Adjustable Rate Mortgage Loans
are identified as such on the Mortgage Loan Schedule.
"Adjusted 30/360 Guarantee Fee Rate": With respect to any
Distribution Date, the product of (x) the Guarantee Fee Rate multiplied by a
fraction, the numerator of which is the Certificate Principal Balances of the
Class A-1 Certificates immediately prior to such Distribution Date and the
denominator of which is the outstanding Principal Balance of the Group I
Mortgage Loans plus any amount remaining on deposit in the Group I Pre-Funding
Account as of the first day of the month preceding the month of such
Distribution Date (the Original Group I Pre-Funded Amount being deemed to be on
deposit in the Group I Pre-Funding Account as of such date if such
7
date occurred prior to the Closing Date) and (y) a fraction, the numerator of
which is the actual number of days elapsed in the related Accrual Period and the
denominator of which is 30.
"Adjusted Actual/360 Guarantee Fee Rate": With respect to any
Distribution Date, the Guarantee Fee Rate multiplied by a fraction, the
numerator of which is the aggregate Certificate Principal Balances of the Class
A-1 Certificates immediately prior to such Distribution Date and the denominator
of which is the outstanding Principal Balance of the Group I Mortgage Loans plus
any amount remaining on deposit in the Group I Pre-Funding Account as of the
first day of the month preceding the month of such Distribution Date (the
Original Group I Pre-Funded Amount being deemed to be on deposit in the Group I
Pre-Funding Account as of such date if such date occurred prior to the Closing
Date).
"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 and (ii) the
Servicing Fee Rate.
"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 Mortgage Rate for such Mortgage Loan as
of the first day of the month preceding the month in which the related
Distribution Date occurs minus the sum of (i) the Trustee Fee Rate and (ii) the
Servicing Fee Rate.
"Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan, each adjustment date, on which the Mortgage Rate of such Mortgage
Loan may change 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.
8
"Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of Mezzanine Certificates, the sum of (i) any
Realized Losses allocated to such Class of Certificates on such Distribution
Date and (ii) the amount of any Allocated Realized Loss Amount for such Class of
Certificates remaining unpaid from the previous Distribution Date.
"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 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 Accounts (exclusive of investment income) after
giving effect to any purchase of Subsequent Mortgage Loans and (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 Accounts for distribution on the Certificates over (ii) the sum of (1)
amounts reimbursable or payable to the Master Servicer pursuant to Section
3.11(a) or the Trustee pursuant to Section 3.11(b), (2) amounts deposited in the
Collection Account or the Distribution Account pursuant to clauses (A) through
(I) above, as the case may be, in error and (3) any indemnification payments or
expense reimbursements made by the Trust Fund pursuant to Section 8.05.
Available Funds shall not include 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 or any Master Servicer Prepayment Charge Payment Amount
relating to a Prepayment Charge payable on any Mortgage Loan.
"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.
9
"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.
"Book-Entry Certificates": Any of the Certificates that shall
be registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A-2 Certificates, Class S-2 Certificates and the Mezzanine
Certificates (other than the Class B Certificates) shall be Book-Entry
Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which the Guarantor or banking or savings institutions in the
Commonwealth of Pennsylvania, 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 Residual
Certificate.
"Certificateholder": The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified Organization
or non-U.S. Person shall not be a Holder of a Residual Certificate for any
purpose hereof and, solely for the purposes of giving any consent pursuant to
this Agreement, any Certificate registered in the name of the Depositor or the
Master Servicer or any Affiliate thereof shall be deemed not to be outstanding
and the Voting Rights to which it is entitled shall not be taken into account in
determining whether the requisite percentage of Voting Rights necessary to
effect any such consent has been obtained, except as otherwise provided in
Section 11.01. The Trustee, the Guarantor 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, the Guarantor 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-1
Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 0.10% per annum and (B) after the Optional Termination Date,
0.20% per annum. With respect to the Class A-2 Certificates on each Distribution
Date (A) on or prior to the Optional Termination Date, 0.25% per annum and (B)
after the Optional Termination Date, 0.50% per annum. With respect to the Class
M-1 Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 0.57% per annum and (B) after the Optional Termination Date,
0.855% 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)
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after the Optional Termination Date, 1.725% per annum. With respect to the Class
M-3 Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 1.70% per annum and (B) after the Optional Termination Date,
2.550% per annum. With respect to the Class M-4 Certificates on each
Distribution Date (A) on or prior to the Optional Termination Date, 2.05% per
annum and (B) after the Optional Termination Date, 3.075% 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 Interests MT-S1(1), MT-S1(2), MT-S1(3), MT-S2(1), MT-S2(2) and
MT-S2(3)) over (B) the then aggregate Certificate Principal Balances of the
Class A Certificates, the Mezzanine Certificates and the Class P Certificates
then outstanding.
"Certificate Register" and "Certificate Registrar": The
register maintained and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same
priority of payment and bear the same class designation and the form of which is
identical except for variation in the Percentage Interest evidenced thereby.
"Class A Certificateholder": Any Holder of a Class A
Certificate.
"Class A Certificates": Any Class A-1 Certificate or Class A-2
Certificate.
"Class A Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Class A-1 Principal Distribution Amount
and (ii) the Class A-2 Principal Distribution Amount.
"Class A-1 Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (i) the Group I Principal Remittance Amount for such Distribution Date,
and the denominator of which is (ii) the Principal Remittance Amount for such
Distribution Date.
"Class A-1 Certificate": Any one of the Class A-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-1, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
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"Class A-1 Principal Distribution Amount": The excess of (x)
the Certificate Principal Balance of the Class A-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
62.00% and (ii) the aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (B) the aggregate Stated Principal Balance of
the Group I Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class A-2 Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (i) the Group II Principal Remittance Amount for such Distribution
Date, and the denominator of which is (ii) the Principal Remittance Amount for
such Distribution Date.
"Class A-2 Certificate": Any one of the Class A-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class A-2 Principal Distribution Amount": The excess of (x)
the Certificate Principal Balance of the Class A-2 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
62.00% and (ii) the aggregate Stated Principal Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (B) the aggregate Stated Principal Balance of
the Group II Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class B Certificate": Any one of the Class B Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-9, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class B Principal Distribution Amount": The excess of (x) the
sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Certificate Principal Balance of the Class M-2 Certificates (after taking
into account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the Certificate Principal Balance of the Class M-3
Certificates (after taking into account the payment of the Class M-3 Principal
Distribution Amount on such Distribution Date), (v) the Certificate Principal
Balance of the Class M-4
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Certificates (after taking into account the payment of the Class M-4 Principal
Distribution Amount on such Distribution Date) and (v) the Certificate Principal
Balance of the Class B Certificates immediately prior to such Distribution Date
over (y) the lesser of (A) the product of (i) 99.00% 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 related 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-10,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 4.
"Class C Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class C Certificates,
evidencing a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-5, representing
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 aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date) and (ii) the Certificate
Principal Balance of the Class M-1 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 75.00% 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 related Overcollateralization Floor.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6, representing
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 aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the
13
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) 86.00% 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 related Overcollateralization Floor.
"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7, representing
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 aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Certificate Principal Balance of the Class M-2 Certificates (after taking
into account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (iv) the Certificate Principal Balance of the Class M-3
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 92.50% 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 related Overcollateralization Floor.
"Class M-4 Certificate": Any one of the Class M-4 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-8, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-4 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Certificate Principal Balance of the Class M-2 Certificates (after taking
into account the payment of the Class M-2 Principal
14
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date) and (v)
the Certificate Principal Balance of the Class M-4 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
95.50% 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 related Overcollateralization
Floor.
"Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-11,
representing the right to distributions as set forth herein and therein and
evidencing a regular interest in REMIC 5.
"Class P Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class P Certificates,
evidencing a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
"Class R Certificate": The Class R Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-12 and evidencing the
ownership of the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest.
"Class R-X Certificate": The Class R-X Certificate executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-13 and evidencing the
ownership of the Class R-4 Interest and the Class R-5 Interest.
"Class R-1 Interest": The uncertificated Residual Interest in
REMIC 1.
"Class R-2 Interest": The uncertificated Residual Interest in
REMIC 2.
"Class R-3 Interest": The uncertificated Residual Interest in
REMIC 3.
"Class R-4 Interest": The uncertificated Residual Interest in
REMIC 4.
"Class R-5 Interest": The uncertificated Residual Interest in
REMIC 5.
"Class S Certificates": Any Class S-1 Certificate or Class S-2
Certificate.
"Class S-1 Certificate": Any one of the Class S-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form
15
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 S-2 Certificate": Any one of the Class S-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 S-1 Rate": With respect to REMIC 2 Regular Interest
LT2S1 and the Class S-1 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
LT1 over (ii) the excess (but not less than zero) of (x) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1 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
LT1 over (ii) the excess (but not less than zero) of (x) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1 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
LT1 over (ii) the excess (but not less than zero) of (x) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1 over (y) 2.50% per annum;
(D) in the case of each Distribution Date thereafter, 0.00%
per annum.
"Class S-2 Rate": With respect to REMIC 2 Regular Interest
LT2S2 and the Class S-2 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
LT2 over (ii) the excess (but not less than zero) of (x) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT2 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
LT2 over (ii) the excess (but not less than zero) of (x) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT2 over (y) 4.50% per annum;
16
(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
LT2 over (ii) the excess (but not less than zero) of (x) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT2 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).
"Closing Date": July 30, 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 "▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Trustee, in trust
for registered Holders of Option One Mortgage Loan Trust 2002-5, Asset-Backed
Certificates, Series 2002-5," which must be an Eligible Account.
"Compensating Interest": As defined in Section 3.24 hereof.
"Convertible Mortgage Loan": Any Adjustable-Rate Mortgage Loan
which permits the Mortgagor thereunder to convert the Mortgage Rate thereon to a
fixed Mortgage Rate.
"Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at Sixth and Marquette,
Minneapolis, Minnesota 55479-0113, Attention: Option One Series 2002-5, or at
such other address as the Trustee may designate from time to time by notice to
the Certificateholders, the Depositor, the Guarantor, the Master Servicer, the
Originator and the Seller.
"Corresponding Certificate": With respect to (i) REMIC 2
Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, (ii) REMIC 2 Regular Interest MT-A2, (iii) REMIC 2
Regular Interest MT-M1, (iv) REMIC 2 Regular Interest MT-M2, (v) REMIC 2 Regular
Interest MT-M3, (vi) REMIC 2 Regular Interest MT-M4, (vii) REMIC 2 Regular
Interest MT-B and (viii) REMIC 1 Regular Interest MT-P and REMIC 2 Regular
Interest MT-P, (i) the Class A-1 Certificates, (ii) the Class A-2 Certificates,
(iii) Class M-1 Certificates, (iv) Class M-2 Certificates, (v) Class M-3
Certificates, (vi) the Class M-4 Certificates, (vii) the Class B Certificates
and (viii) 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 Accounts, calculated prior to taking into account payments of
principal on the Mortgage Loans and distribution of the Group I Principal
Distribution Amount and the Group II Principal
17
Distribution Amount to the Holders of the Certificates then entitled to
distributions of principal on such Distribution Date.
"Custodian": ▇▇▇▇▇ 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) July 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), after giving effect to
scheduled payments due on or before such Cut-off Date, whether or not received.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Deficiency Amount": With respect to any Distribution Date,
the sum of (i) the Guaranteed Interest Distribution Amount and (ii) the
Guaranteed Principal Distribution Amount.
"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.
18
"Depositor": Option One Mortgage Acceptance Corporation, a
Delaware corporation, or any successor in interest.
"Depository": The initial Depository shall be The Depository
Trust Company and upon request, Clearstream Banking Luxembourg and the Euroclear
System, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Participant": A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Distribution Date,
the 10th day of the calendar month in which such Distribution Date occurs or, if
such 10th day is not a Business Day, the Business Day immediately preceding such
10th day.
"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 Residual Certificate by such Person
may cause any Trust REMIC or any Person having an ownership interest in any
Class of Certificates (other than such Person) to incur liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the transfer of an ownership interest in the Residual Certificate to such
Person. A corporation will not be treated as an instrumentality of the United
States or of any state or political subdivision thereof, if all of its
activities are subject to tax and, a majority of its board of directors is not
selected by a governmental unit. The term "United States", "state" and
"international organizations" shall have the meanings set forth in Section 7701
of the Code.
"Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Distribution Account, ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as Trustee, in trust for the registered Certificateholders of
Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates, Series 2002-5"
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 August 2002.
19
"Due Date": With respect to each Mortgage Loan and any
Distribution Date, the first day of the calendar month in which such
Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was
due (or, in the case of any Mortgage Loan under the terms of which the Monthly
Payment for such Mortgage Loan was due on a day other than the first day of the
calendar month in which such Distribution Date occurs, the day during the
related Due Period on which such Monthly Payment was due), exclusive of any days
of grace.
"Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month preceding the month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
"Eligible Account": Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the short-term unsecured debt obligations of such holding
company) are rated P-1 by ▇▇▇▇▇'▇, F-1 by Fitch or A-1 by S&P (or comparable
ratings if ▇▇▇▇▇'▇, Fitch and S&P are not the Rating Agencies) at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits in
which are fully insured by the FDIC (to the limits established by such
corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the NIMS Insurer, the
Guarantor, 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 the Guarantor (as evidenced by a
letter from the Guarantor to the Trustee and the NIMS Insurer) and 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 Group Net WAC Rate Amount": For any Distribution Date
and the Class ▇- ▇ Certificates, the positive excess, if any, of (i) the amount
of interest accrued on the Class A-1 Certificates for such Distribution Date
calculated at the Net WAC Rate for the Class A-1 Certificates over (ii) the
amount of interest accrued on the Class A-1 Certificates at the Pool Net WAC
Rate. For any Distribution Date and the Class A-2 Certificates, the positive
excess, if any, of (i) the amount of interest accrued on the Class A-2
Certificates for such Distribution Date calculated at the Net
20
WAC Rate for the Class A-2 Certificates over (ii) the amount of interest accrued
on the Class A-2 Certificates at the Pool Net WAC Rate.
"Excess Mezzanine Net WAC Rate Amount": For any Distribution
Date and any class of Mezzanine Certificates, the positive excess, if any, of
(i) the amount of interest accrued on the Mezzanine Certificates for such
Distribution Date calculated at the Pool Net WAC Rate over (ii) the lesser of
(a) the amount of interest accrued on the Mezzanine Certificates at the Net WAC
Rate for the Class A-1 Certificates or (b) the amount of interest accrued on the
Mezzanine Certificates at the Net WAC Rate for the Class A-2 Certificates.
"Excess Net WAC Rate Reserve Fund": As defined in Section
3.32.
"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.
"Excess Pool Net WAC Rate Amount": For any Distribution Date
and the Class A-1 Certificates, the positive excess, if any, of (i) the amount
of interest accrued on the Class A-1 Certificates for such Distribution Date
calculated at the Pool Net WAC Rate over (ii) the amount of interest accrued on
the Class A-1 Certificates at the Net WAC Rate for the Class A-1 Certificates.
For any Distribution Date and the Class A-2 Certificates, the positive excess,
if any, of (i) the amount of interest accrued on the Class A-2 Certificates for
such Distribution Date calculated at the Pool Net WAC Rate over (ii) the amount
of interest accrued on such Class A-2 Certificates at the Net WAC Rate for the
Class A-2 Certificates.
"Extended Period": As defined in Section 3.23(b).
"Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Net Monthly Excess Cashflow for such
Distribution Date and (y) the Overcollateralization Deficiency Amount for such
Distribution Date.
"▇▇▇▇▇▇ ▇▇▇": Federal National Mortgage Association or any
successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Originator or the Master Servicer pursuant to or as
contemplated by Section 2.03 or 10.01), a determination made by the Master
Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Master Servicer, in its reasonable good faith judgment,
expects to be finally recoverable in respect thereof have been so recovered. The
Master Servicer shall maintain records, prepared by a Servicing Officer, of each
Final Recovery Determination made thereby.
"Fitch": Fitch Ratings, or its successor in interest.
21
"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.
"Formula Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates (other than the Class B
Certificates), the lesser of (i) LIBOR plus the related Certificate Margin and
(ii) the applicable Maximum Cap Rate.
"▇▇▇▇▇▇▇ Mac": The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under Title
III of the Emergency Home Finance Act of 1970, as amended, 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 Accounts (exclusive of investment income) has been reduced to
zero or (b) October 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.
"Group I Basic Principal Distribution Amount": With respect to
any Distribution Date, the excess of (i) the Group I Principal Remittance Amount
for such Distribution Date over (ii) the Overcollateralization Release Amount,
if any, for such Distribution Date multiplied by the Class A-1 Allocation
Percentage.
"Group I Initial Deposit Account": The Group I Initial Deposit
Account established in accordance with Section 3.10(b) hereof and maintained by
the Trustee, which shall be entitled "▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as Trustee, in trust for registered Holders of Option One Mortgage
Loan Trust 2002-5, Asset-Backed Certificates, Series 2002-5 Group I Initial
Deposit Account," which must be an Eligible Account.
"Group I Interest Coverage Account": The account established
and maintained pursuant to Section 4.06, as defined therein.
"Group I Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group I
Mortgage Loans.
"Group I Mortgage Loan": A Mortgage Loan assigned to Loan
Group I with a principal balance that conforms to ▇▇▇▇▇▇▇ Mac loan limits.
"Group I Pre-Funding Account": The account established and
maintained pursuant to Section 4.05, as defined herein.
22
"Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group I Basic Principal Distribution
Amount for such Distribution Date and (ii) the Extra Principal Distribution
Amount for such Distribution Date multiplied by the Class A-1 Allocation
Percentage.
"Group I Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) each scheduled payment of principal collected
or advanced on the Group I Mortgage Loans by the Master Servicer that were due
during the related Due Period, (ii) the principal portion of all partial and
full principal prepayments of the Group I Mortgage Loans 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 with respect to the Group I Mortgage Loans, (iv) that portion
of the Purchase Price, representing principal of any repurchased Group I
Mortgage Loan, deposited to the Collection Account during such Prepayment
Period, (v) the principal portion of any related Substitution Adjustments
deposited in the Collection Account during such Prepayment Period with respect
to the Group I Mortgage Loans, (vi) on the Distribution Date on which the Trust
Fund is to be terminated pursuant to Section 10.01, that portion of the
Termination Price, in respect of principal on the Group I Mortgage Loans and
(vii) on the Distribution Date immediately following the end of the Funding
Period, any remaining amounts in the Group I Pre-Funding Account (exclusive of
investment income therein) after giving effect to any purchase of Subsequent
Group I Mortgage Loans.
"Group II Basic Principal Distribution Amount": With respect
to any Distribution Date, the excess of (i) the Group II Principal Remittance
Amount for such Distribution Date over (ii) the Overcollateralization Release
Amount, if any, for such Distribution Date multiplied by the Class A-2
Allocation Percentage.
"Group II Initial Deposit Account": The Group II Initial
Deposit Account established in accordance with Section 3.10(b) hereof and
maintained by the Trustee, which shall be entitled "▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Trustee, in trust for registered Holders of Option One
Mortgage Loan Trust 2002-5, Asset-Backed Certificates, Series 2002-5 Group II
Initial Deposit Account," which must be an Eligible Account.
"Group II Interest Coverage Account": The account established
and maintained pursuant to Section 4.06, as defined therein.
"Group II Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group II
Mortgage Loans.
"Group II Mortgage Loan": A Mortgage Loan assigned to Loan
Group II with a principal balance that may or may not conform to ▇▇▇▇▇▇▇ Mac
loan limits.
"Group II Pre-Funding Account": The account established and
maintained pursuant to Section 4.05, as defined herein.
23
"Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group II Basic Principal Distribution
Amount for such Distribution Date and (ii) the Extra Principal Distribution
Amount for such Distribution Date multiplied by the Class A-2 Allocation
Percentage.
"Group II Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) each scheduled payment of principal collected
or advanced on the Group II Mortgage Loans by the Master Servicer that were due
during the related Due Period, (ii) the principal portion of all partial and
full principal prepayments of the Group II Mortgage Loans 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 with respect to the Group II Mortgage Loans, (iv) that portion
of the Purchase Price, representing principal of any repurchased Group II
Mortgage Loan, deposited to the Collection Account during such Prepayment
Period, (v) the principal portion of any related Substitution Adjustments
deposited in the Collection Account during such Prepayment Period with respect
to the Group II Mortgage Loans, (vi) on the Distribution Date on which the Trust
Fund is to be terminated pursuant to Section 10.01, that portion of the
Termination Price, in respect of principal on the Group II Mortgage Loans and
(vii) on the Distribution Date immediately following the end of the Funding
Period, any remaining amounts in the Group II Pre-Funding Account (exclusive of
investment income therein) after giving effect to any purchase of Subsequent
Group II Mortgage Loans.
"Guarantee": The obligations of the Guarantor pursuant to
Section 4.02.
"Guarantee Fee": For any Distribution Date and with respect to
the Guaranteed Certificates, the fee payable to the Guarantor in respect of its
services as Guarantor that accrues at the applicable Guarantee Fee Rate for such
Guaranteed Certificates on a balance equal to the aggregate Certificate
Principal Balance of the Class A-1 Certificates immediately prior to such
Distribution Date, computed on the basis of a 360-day year and the actual number
of days elapsed in the related Accrual Period. Notwithstanding the foregoing, if
the Guarantee Fee with respect to the Guaranteed Certificates becomes payable on
the basis of a 360-day year and twelve 30-day months pursuant to Section
4.04(b), then the Guarantee Fee with respect to the Guaranteed Certificates will
accrue for each Distribution Date at the applicable Guarantee Fee Rate on the
Certificate Principal Balance of the Class A-1 Certificates immediately prior to
such Distribution Date, on the basis of a 360-day year and twelve 30-day months.
"Guarantee Fee Rate": The per annum rate set forth in a side
letter of the Guarantor, addressed to the Trustee, the Depositor, the Originator
and the Master Servicer.
"Guaranteed Certificates": The Class A-1 Certificates and the
Class S-1 Certificates.
"Guaranteed Interest Distribution Amount": For any
Distribution Date and the Guaranteed Certificates, the amount, if any, after
giving effect to the distributions made pursuant to clauses (i), (ii) and (iii)
of Section 4.01(a)(I) and clause (iii) of Section 4.01(a)(II), by which the (i)
sum of (x) the Monthly Interest Distributable Amount and the Unpaid Interest
Shortfall Amount payable on the Guaranteed Certificates for such Distribution
Date and (y) the Net Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls allocated to the Guaranteed Certificates for such
24
Distribution Date exceeds (ii) the amount of interest actually paid to the
Holders of the related Classes of Guaranteed Certificates on such Distribution
Date.
"Guaranteed Principal Distribution Amount": With respect to
any Distribution Date, (a) the amount, if any, by which (i) the Certificate
Principal Balance of the Class A-1 Certificates (after giving effect to all
amounts distributable and allocable to principal on such Class A-1 Certificates
but prior to giving effect to any Guarantor Payment on such Distribution Date)
exceeds (ii) the aggregate Stated Principal Balance of the Group I Mortgage
Loans (after giving effect to the principal portion of Monthly Payments due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) plus any amounts remaining on deposit in the Group I Pre-Funding Account
and (b) in the case of the Distribution Date in October 2032, any unpaid
Certificate Principal Balance of the Class A-1 Certificates.
"Guarantor": ▇▇▇▇▇▇▇ Mac, or its successor in interest.
"Guarantor Payment": Any payment made by the Guarantor in
respect of a Deficiency Amount.
"Guarantor Reimbursement Amount": With respect to any
Distribution Date, (i) the sum of any accrued but unpaid Guarantee Fees and (ii)
the sum of all amounts paid by the Guarantor in respect of Deficiency Amounts on
all prior Distribution Dates to the extent not previously reimbursed, with
interest thereon at a rate equal to the Prime Rate plus 2.00%.
"Holder": See "Certificateholder."
"Indenture": An indenture relating to the issuance of notes
guaranteed by the NIMS Insurer.
"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.
"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.
"Information Circular": The Information Circular of the
Depositor dated July 19, 2002, relating to the Guaranteed Certificates.
25
"Initial Certificate Principal Balance": With respect to any
Regular Certificate, the amount designated "Initial Certificate Principal
Balance" on the face thereof.
"Initial Deposit": With respect to the Initial Group I
Mortgage Loans, $132,838.70 in cash to be deposited by the Depositor with the
Trustee for deposit into the Group I Initial Deposit Account on or before the
Closing Date, relating to Initial Group I Mortgage Loans having a first Due Date
in the Due Period relating to the Distribution Date in September 2002. With
respect to the Initial Group II Mortgage Loans, $82,625.30 in cash to be
deposited by the Depositor with the Trustee for deposit into the Group II
Initial Deposit Account on or before the Closing Date, relating to Initial Group
II Mortgage Loans having a first Due Date in the Due Period relating to the
Distribution Date in September 2002.
"Initial Deposit Accounts": The Group I Initial Deposit
Account and the Group II Initial Deposit Account.
"Initial Group I Mortgage Loan": Any of the Group I Mortgage
Loans included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Initial Group I Mortgage Loans as of the Cut-off Date is equal to
$281,279,198.42.
"Initial Group II Mortgage Loan": Any of the Group II Mortgage
Loans included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Initial Group II Mortgage Loans as of the Cut-off Date is equal
to $191,683,261.09.
"Initial Mortgage Loan": Any of the Initial Group I Mortgage
Loans or Initial Group II Mortgage Loans included in the Trust Fund as of the
Closing Date.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are received by the Master Servicer and are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Master Servicer would follow in
servicing mortgage loans held for its own account, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Interest Coverage Accounts": The Group I Interest Coverage
Account and the Group II Interest Coverage Account.
"Interest Coverage Amounts": The amount to be paid by the
Depositor to the Trustee for deposit in the Group I Interest Coverage Account on
the Closing Date pursuant to Section 4.06, which amount is $656,544.68 and the
amount to be paid by the Depositor to the Trustee for deposit in the Group II
Interest Coverage Account on the Closing Date pursuant to Section 4.06, which
amount is $409,078.00.
"Interest Determination Date": With respect to the Class A
Certificates and the Mezzanine Certificates (other than the Class B
Certificates) and each Accrual Period, the second LIBOR Business Day preceding
the commencement of such Accrual Period.
26
"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 the first Accrual Period, 1.81% per
annum. With respect to each Accrual Period after the first Accrual Period, the
rate determined by the Trustee on the related Interest Determination Date on the
basis of the "Interest Settlement Rate" for U.S. dollar deposits of one-month
maturity set by the British Bankers' Association (the "BBA") as such rate
appears on Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date. With respect to any Interest Determination Date, if the
BBA's Interest Settlement Rate does not appear on Telerate Page 3750 as of 11:00
a.m. (London time) on such date, or if Telerate Page 3750 is not available on
such date, the Trustee will obtain such rate from Reuters Monitor Money Rates
Service page "LIBOR01" or Bloomberg L.P. page "BBAM." If such rate is not
published for such Interest Determination Date, LIBOR for such date will be the
most recently published Interest Settlement Rate. In the event that the BBA no
longer sets an Interest Settlement Rate, the Guarantor will designate an
alternative index that has performed, or that the Guarantor expects to perform,
in a manner substantially similar to the BBA's Interest Settlement Rate. The
Guarantor will select a particular index as the alternative index only if it
receives an Opinion of Counsel that the selection of such index will not cause
any Trust REMIC to lose its classification as a REMIC for federal income tax
purposes.
"LIBOR Business Day": Any day on which banks in London,
England and The City of New York are open and conducting transactions in foreign
currency and exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified herein, as of the end of the
related Prepayment Period, that all Liquidation Proceeds which it expects to
recover with respect to the liquidation of the Mortgage Loan or disposition of
the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full, (ii) a Final
Recovery Determination is made as to such Mortgage Loan or (iii) such Mortgage
Loan is removed from the Trust Fund by reason of its being purchased, sold or
replaced pursuant to or as contemplated by Section 2.03 or Section 10.01. With
respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property or (ii) such REO Property
is removed from the Trust Fund by reason of its being sold or purchased pursuant
to Section 3.23 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts
received in respect of the rental of any REO Property prior to REO Disposition)
received by the Master Servicer in connection with (i) the taking of all or a
part of a Mortgaged Property by exercise of the power of eminent domain or
condemnation, (ii) the liquidation of a defaulted Mortgage Loan by means of a
trustee's
27
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 Data Remittance Date": With respect to any Distribution
Date, four Business Days after the related Determination Date.
"Loan Data Remittance Report": As defined in Section 4.10(a).
"Loan-to-Value Ratio": As of any date and as to any Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the
Principal Balance of the Mortgage Loan (and, with respect to any second lien
Mortgage Loan, the Principal Balance of the related first lien Mortgage Loan
plus the Principal Balance of such second lien Mortgage Loan), and the
denominator of which is the Value of the related Mortgaged Property.
"Loan Group": Either Loan Group I or Loan Group II, as the
context requires.
"Loan Group I": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group I.
"Loan Group II": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group II.
"Losses": As defined in Section 9.03.
"Loss Mitigation Procedures": The policies and procedures set
forth in Exhibit G hereto relating to the realization on delinquent Mortgage
Loans.
"Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost, misplaced or
destroyed and has not been replaced, an affidavit from the Originator certifying
that the original Mortgage Note has been lost, misplaced or destroyed (together
with a copy of the related Mortgage Note) and indemnifying the Trust against any
loss, cost or liability resulting from the failure to deliver the original
Mortgage Note in the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Marker Rate": With respect to the Class C Interest and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 2 Pass- Through Rates for REMIC 2 Regular Interest
MT-A1, REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest MT-M1, REMIC 2
Regular Interest MT-M2, REMIC 2 Regular Interest MT-M3, REMIC 2 Regular Interest
MT-M4, REMIC 2 Regular Interest MT-B and REMIC 2 Regular Interest MT-ZZ, with
the rate on REMIC 2 Regular Interest MT-A1 subject to a cap equal to the lesser
of (i) LIBOR plus the Certificate Margin of the Class A-1 Certificates and (ii)
the Pool Net WAC Rate for the purpose of this calculation; with the rate on
REMIC 2 Regular Interest MT-A2 subject to a cap equal to the lesser of (i) LIBOR
plus the Certificate Margin of the Class A-2 Certificates and (ii)
28
the Pool Net WAC Rate for the purpose of this calculation; with the rate on
REMIC 2 Regular Interest MT-M1 subject to a cap equal to the lesser of (i) LIBOR
plus the Certificate Margin of the Class M-1 Certificates and (ii) the Pool Net
WAC Rate for the purpose of this calculation; with the rate on REMIC 2 Regular
Interest MT-M2 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class M-2 Certificates and (ii) the Pool Net WAC Rate
for the purpose of this calculation; with the rate on REMIC 2 Regular Interest
MT-M3 subject to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the Class M-3 Certificates and (ii) the Pool Net WAC Rate for the
purpose of this calculation; with the rate on REMIC 2 Regular Interest MT-M4
subject to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class M-4 Certificates and (ii) the Pool Net WAC Rate for the purpose of
this calculation; with the rate on REMIC 2 Regular Interest MT-B subject to a
cap equal to the lesser of (i) 6.80% per annum and (ii) the Pool Net WAC Rate
for the purpose of this calculation; and with the rate on REMIC 2 Regular
Interest MT-ZZ 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 REMIC 2 Regular
Interest MT-A1, REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest MT-M1,
REMIC 2 Regular Interest MT-M2, REMIC 2 Regular Interest MT-M3 and REMIC 2
Regular Interest MT-M4 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 35.00% 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-1 Certificates, a per annum rate equal to the product of (x) the average of
the Adjusted Net Maximum Mortgage Rates of the Group I Mortgage Loans, weighted
on the basis of the outstanding Principal Balances of the Group I Mortgage Loans
as of the first day of the month preceding the month of such Distribution Date
less the sum of (A) the Adjusted Actual/360 Guarantee Fee Rate (multiplied by a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days
29
elapsed in the related Accrual Period, if the Guarantee Fee with respect to the
Guaranteed Certificates becomes payable on the basis of a 360-day year and
twelve 30-day months pursuant to Section 4.04(b)) and (B) the Pass-Through Rate
for the Class S-1 Certificates for such Distribution Date multiplied by a
fraction, the numerator of which is the Notional Amount of the Class S-1
Certificates immediately prior to such Distribution Date and the denominator of
which is the sum of the outstanding Principal Balances of the Group I Mortgage
Loans as of the first day of the month preceding the month of such Distribution
Date and any amount remaining in the Group I Pre- Funding Accounts (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.
For any Distribution Date and the Class A-2 Certificates, a
per annum rate equal to the product of (x) the average of the Adjusted Net
Maximum Mortgage Rates of the Group II Mortgage Loans, weighted on the basis of
the outstanding Principal Balances of the Group II 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-2 Certificates for such Distribution Date
multiplied by a fraction, the numerator of which is the Notional Amount of the
Class S-2 Certificates immediately prior to such Distribution Date and the
denominator of which is the sum of the outstanding Principal Balances of the
Group II Mortgage Loans as of the first day of the month preceding the month of
such Distribution Date and any amount remaining in the Group II Pre-Funding
Accounts (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.
For any Distribution Date and the Mezzanine Certificates
(other than the Class B Certificates), the lesser of (i) the Maximum Cap Rate
for the Class A-1 Certificates and (ii) the Maximum Cap Rate for the Class A-2
Certificates.
"Maximum MT-ZZ 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 MT-ZZ for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-ZZ minus the
REMIC 2 Overcollateralized Amount, in each case for such Distribution Date, over
(b) Uncertificated Accrued Interest on REMIC 2 Regular Interest MT-A1 with the
rate on REMIC 2 Regular Interest MT-A1 subject to a cap equal to the lesser of
(i) LIBOR plus the Certificate Margin of the Class A-1 Certificates and (ii) the
Pool Net WAC Rate for the purpose of this calculation; Uncertificated Accrued
Interest on REMIC 2 Regular Interest MT-A2 with the rate on REMIC 2 Regular
Interest MT-A2 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class A-2 Certificates and (ii) the Pool Net WAC Rate
for the purpose of this calculation; Uncertificated Accrued Interest on REMIC 2
Regular Interest MT-M1 with the rate on REMIC 2 Regular Interest MT-M1 subject
to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of the
Class M-1 Certificates and (ii) the Pool Net WAC Rate for the purpose of this
calculation; Uncertificated Accrued Interest on REMIC 2 Regular Interest MT-M2
with the rate on REMIC 2 Regular Interest MT-M2 subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class M-2 Certificates
and (ii) the Pool Net WAC Rate for the purpose of this calculation;
Uncertificated Accrued Interest on REMIC 2 Regular Interest MT-M3 with the rate
on REMIC 2 Regular Interest MT-M3 subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin
30
of the Class M-3 Certificates and (ii) the Pool Net WAC Rate for the purpose of
this calculation; Uncertificated Accrued Interest on REMIC 2 Regular Interest
MT-M4 with the rate on REMIC 2 Regular Interest MT-M4 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class M-4
Certificates and (ii) the Pool Net WAC Rate for the purpose of this calculation;
Uncertificated Accrued Interest on REMIC 2 Regular Interest MT-B with the rate
on REMIC 2 Regular Interest MT-B subject to a cap equal to the lesser of (i)
6.80% per annum and (ii) the Pool Net WAC Rate 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
REMIC 2 Regular Interest MT-A1, REMIC 2 Regular Interest MT-A2, REMIC 2 Regular
Interest MT-M1, REMIC 2 Regular Interest MT-M2, REMIC 2 Regular Interest MT-M3
and REMIC 2 Regular Interest MT-M4 shall be multiplied by a fraction, the
numerator of which is the actual number of days in the Accrual Period and the
denominator of which is 30.
"Maximum Mortgage Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.
"Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate, Class M- 3 Certificate, Class M-4 Certificates or Class B
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 Mezzanine Certificates, the Class C Certificates and
any Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class C Certificates) of such Class
immediately prior to such Distribution Date, in each case, (i) increased by the
amount of the Excess Group Net WAC Rate Amount, if any, for such Distribution
Date, and (ii) reduced by (x) the amount of the Excess Pool Net WAC Rate Amount
or Excess Mezzanine Net WAC Rate Amount, if any, for such Distribution Date and
(y) Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
(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). With respect to the Class S
Certificates, and any Distribution Date, the amount of interest accrued during
the related Accrual Period at the related Pass-Through Rate on the related
Notional Amount of the Class S 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 (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, (i) the Monthly Interest Distributable
Amount for the Class S-1 Certificates and any Distribution Date will be deemed
to be the Uncertificated Accrued Interest for REMIC 2 Regular Interests MT-
S1(1), MT-S1(2) and MT-S1(3) for such Distribution Date and (ii) the Monthly
Interest Distributable Amount for the Class S-2 Certificates and any
Distribution Date will be deemed to be the Uncertificated Accrued Interest for
REMIC 2 Regular Interest MT-S2(1), MT-S2(2) and MT-S2(3) for such Distribution
Date.
31
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.01; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": ▇▇▇▇▇'▇ 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 2.10 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 Agreements": Collectively, the
agreements among the 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, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Exhibit D, as
supplemented by each schedule of Subsequent Mortgage Loans attached to a
Subsequent Transfer Instrument which, as of the Closing Date, shall conform to
the Mortgage Loan Schedule as provided to the Guarantor in electronic format
prior to the Closing Date. 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 name of the Mortgagor and the Originator's
Mortgage Loan identifying number;
(2) the city, state, and zip code of the Mortgaged
Property;
(3) the type of residential dwelling constituting the
Mortgaged Property;
(4) the occupancy status (as represented by the borrower)
of the Mortgaged Property at origination;
(5) the original months to maturity;
32
(6) the date of origination;
(7) the first Due Date;
(8) the stated maturity date;
(9) the stated remaining months to maturity as of the
applicable Cut-off Date;
(10) the original principal amount of the Mortgage Loan;
(11) the Stated Principal Balance of the Mortgage Loan as
of the applicable Cut- off Date;
(12) whether such Mortgage Loan is a Balloon Mortgage Loan
(if such Mortgage Loan is a Fixed-Rate Mortgage
Loan);
(13) the current Mortgage Rate of the Mortgage Loan as of
the applicable Cut-off Date;
(14) the current principal and interest payment of the
Mortgage Loan as of the applicable Cut-off Date;
(15) the interest "paid to date" of the Mortgage Loan as
of the applicable Cut-off Date;
(16) the Loan-to-Value Ratio at origination;
(17) the delinquency status of the Mortgage Loan as of the
applicable Cut-off Date;
(18) the Originator's credit grade assigned to such
Mortgage Loan;
(19) a code indicating the Index that is associated with
such Mortgage Loan (if such Mortgage Loan is an
Adjustable-Rate Mortgage Loan);
(20) the Gross Margin (if such Mortgage Loan is an
Adjustable-Rate Mortgage Loan);
(21) the Periodic Rate Cap for the initial Adjustment Date
(if such Mortgage Loan is an Adjustable-Rate Mortgage
Loan);
(22) the Minimum Mortgage Rate (if such Mortgage Loan is
an Adjustable-Rate Mortgage Loan);
(23) the Maximum Mortgage Rate (if such Mortgage Loan is
an Adjustable-Rate Mortgage Loan);
33
(24) the Periodic Rate Cap for each Adjustment Date after
the initial Adjustment Date (if such Mortgage Loan is
an Adjustable-Rate Mortgage Loan);
(25) the first Adjustment Date immediately following the
applicable Cut-off Date (if such Mortgage Loan is an
Adjustable-Rate Mortgage Loan);
(26) the rate adjustment frequency (if such Mortgage Loan
is an Adjustable-Rate Mortgage Loan);
(27) the purpose of such Mortgage Loan (i.e. purchase,
cash out refinance or rate/term refinance);
(28) the credit score ("FICO") of such Mortgage Loan;
(29) the number of units;
(30) the lien position of the Mortgage Loan;
(31) the documentation type of the Mortgage Loan;
(32) the number of years the related Prepayment Charge, if
any, is in effect; and
(33) the Loan Group for such Mortgage Loan.
The Mortgage Loan Schedule shall set forth the following
information, with respect to the Mortgage Loans in the aggregate and for each
Loan Group as of the Cut-off Date (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
34
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 the rate as adjusted on the most recent Adjustment Date, to
equal the sum, rounded as provided in the Mortgage Note, of the Index,
determined as set forth in the related Mortgage Note, plus the related Gross
Margin subject to the limitations set forth in the related Mortgage Note. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated
Mortgage Loan or any other disposition of related Mortgaged Property (including
REO Property) the related Liquidation Proceeds and Insurance Proceeds net of
Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid
servicing fees received and retained in connection with the liquidation of such
Mortgage Loan or Mortgaged Property.
"Net Monthly Excess Cashflow": With respect to each
Distribution Date, the sum of (a) any Overcollateralization Release Amount for
such Distribution Date and (b) the excess of (x) Available Funds for such
Distribution Date over (y) the sum for such Distribution Date of (A) the Monthly
Interest Distributable Amounts for the Class A Certificates, the Class S
Certificates and the Mezzanine Certificates, (B) the Unpaid Interest Shortfall
Amounts for the Class A Certificates and the Class S Certificates, (C) the
Principal Remittance Amount, (D) the Guarantee Fee, (E) the Guarantor
Reimbursement Amount and (F) the Trustee Fee.
"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-1 Certificates, a per annum rate equal to the product of (i) the average
of the Adjusted Net Mortgage Rates of the Group I Mortgage Loans, weighted on
the basis of the outstanding Principal Balances of the Group I Mortgage Loans as
of the first day of the month preceding the month of such Distribution Date less
the sum of (A) the Adjusted Actual/360 Guarantee Fee Rate (multiplied by 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, if the Guarantee
Fee with respect to the Guaranteed
35
Certificates becomes payable on the basis of a 360-day year and twelve 30-day
months) and (B) the Pass-Through Rate for the Class S-1 Certificates for such
Distribution Date multiplied by a fraction, the numerator of which is the
Notional Amount of the Class S-1 Certificates immediately prior to such
Distribution Date and the denominator of which is the sum of the outstanding
Principal Balances of the Group I Mortgage Loans as of the first day of the
month preceding the month of such Distribution Date and any amount remaining in
the Group I Pre-Funding Accounts (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 Uncertificated REMIC 2 Pass-Through Rate of the REMIC 2 Regular Interest for
which such Class of Certificates is the Corresponding Certificate.
With respect to each Distribution Date and the Class A-2
Certificates, a per annum rate equal to the product of (i) the average of the
Adjusted Net Mortgage Rates of the Group II Mortgage Loans, weighted on the
basis of the outstanding Principal Balances of the Group II 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-2 Certificates for such Distribution Date
multiplied by a fraction, the numerator of which is the Notional Amount of the
Class S-2 Certificates immediately prior to such Distribution Date and the
denominator of which is the sum of the outstanding Principal Balances of the
Group II Mortgage Loans as of the first day of the month preceding the month of
such Distribution Date and any amount remaining in the Group II Pre-Funding
Accounts (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 Uncertificated REMIC
2 Pass-Through Rate of the REMIC 2 Regular Interest for which such Class of
Certificates is the Corresponding Certificate.
With respect to each Distribution Date and the Mezzanine
Certificates (other than the Class B Certificates), the lesser of (i) the Net
WAC Rate for the Class A-1 Certificates and (ii) the Net WAC Rate for the Class
A-2 Certificates. With respect to each Distribution Date and the Class B
Certificates, the product of (x) the lesser of (i) the Net WAC Rate for the
Class A-1 Certificates and (ii) the Net WAC Rate for the Class A-2 Certificates
and (y) a fraction, the numerator of which is the actual number of days elapsed
in the related Accrual Period and the denominator of which is 30.
With respect to each Distribution Date and the Class S-1
Certificates, a per annum rate equal to the weighted average of the Adjusted Net
Mortgage Rates of the Group I Mortgage Loans, weighted on the basis of the
outstanding Principal Balances of the Group I Mortgage Loans as of the first day
of the month preceding the month of such Distribution Date less the Adjusted
30/360 Guarantee Fee Rate.
With respect to each Distribution Date and the Class S-2
Certificates, a per annum rate equal to the weighted average of the Adjusted Net
Mortgage Rates of the Group II Mortgage Loans, weighted on the basis of the
outstanding Principal Balances of the Group II Mortgage Loans as of the first
day of the month preceding the month of such Distribution Date.
36
"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 accrued on such Class of Certificates for such Distribution Date
calculated at the related Formula Rate, in the case of the Class A Certificates
and the Mezzanine Certificates (other than the Class B Certificates), or the
applicable fixed rate set forth in the definition of "Pass-Through Rate" in the
case of the Class S Certificates and the Class B Certificates, over (ii) the
amount of interest accrued on such Class of Certificates at the related Net WAC
Rate for such Distribution Date and (B) the related Net WAC Rate Carryover
Amount for the previous Distribution Date not previously paid, together with
interest thereon at a rate equal to the related Formula Rate in the case of the
Class A Certificates and the Mezzanine Certificates (other than the Class B
Certificates), or the applicable fixed rate set forth in the definition of
"Pass-Through Rate" in the case of the Class S Certificates or the Class B
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 or other entity, the principal assets of
which include the Class C Certificates, the Class P Certificates or the Residual
Certificates.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, will
not be ultimately recoverable from Late Collections, Insurance Proceeds,
Liquidation Proceeds or condemnation proceeds on such Mortgage Loan or REO
Property as provided herein.
"Notional Amount": Immediately prior to any Distribution Date
(on or before the 30th Distribution Date), with respect to the Class S-1
Certificates, an amount equal to the Uncertificated Principal Balance of REMIC 1
Regular Interest LT-S1 immediately prior to such Distribution Date. Immediately
prior to any Distribution Date, with respect to the Class S-2 Certificates, an
amount equal to the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT-S2 immediately prior to such Distribution Date. Immediately prior to any
Distribution Date, with respect to the Class C Interest and the Class C
Certificates, the aggregate of the Uncertificated Principal Balances of the
REMIC 2 Regular Interests (other than REMIC 2 Regular Interests MT-S1(1),
MT-S1(2), MT-S1(3), MT-S2(1), MT-S2(2) and MT-S2(3)).
"Offered Certificates": The Class A-2 Certificates, the Class
S-2 Certificates and the Mezzanine Certificates (other than the Class B
Certificates) offered to the public pursuant to the Prospectus Supplement.
37
"Offering Circular": The Offering Circular Supplement dated
July 19, 2002, together with the Offering Circular dated December 1, 1999,
relating to ▇▇▇▇▇▇▇ Mac's Structured Pass- Through Certificates, Series T-044.
"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 and the Guarantor, except that any opinion
of counsel relating to (a) the qualification of any Trust REMIC as a REMIC or
(b) compliance with the REMIC Provisions must be an opinion of Independent
counsel.
"Optional Termination Date": The first Distribution Date on
which the Master Servicer or the NIMS Insurer may opt to terminate the Trust
Fund pursuant to Section 10.01.
"Original Class Certificate Principal Balance": With respect
to the Class A Certificates, the Mezzanine Certificates, the Class C Interest,
the Class C Certificates, the Class P Interest and the Class P Certificates, the
corresponding amounts set forth opposite such Class above in the Preliminary
Statement.
"Original Notional Amount": With respect to the Class S-1
Certificates, $37,500,000. With respect to the Class S-2 Certificates,
$25,000,000. With respect to the Class C Interest and the Class C Certificates,
$625,000,000.
"Original Group I Pre-Funded Amount": The amount deposited by
the Depositor in the Group I Pre-Funding Account on the Closing Date, which
amount is $93,720,801.58.
"Original Group II Pre-Funded Amount": The amount deposited by
the Depositor in the Group II Pre-Funding Account on the Closing Date, which
amount is $58,316,738.91.
"Original Pre-Funded Amounts": The Original Group I Pre-Funded
Amount and the Original Group II Pre-Funded Amount.
"Originator": Option One Mortgage Corporation, a California
corporation, or its successor in interest, in its capacity as originator under
the Mortgage Loan Purchase Agreements.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distributions in respect of the Group I Basic Principal
Distribution Amount and the Group II Basic Principal Distribution Amount on such
Distribution Date).
38
"Overcollateralization Floor": With respect to the Class A-1
Certificates, $1,875,000. With respect to the Class A-2 Certificates,
$1,250,000. With respect to the Mezzanine Certificates, $3,125,000.
"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, $3,125,000.
"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
Accounts 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 (other than the Class B Certificates) and any Distribution Date,
the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Pool Net WAC Rate for such Distribution Date.
With respect to the Class S-1 Certificates and the Class S-2
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-1 Certificates and the Class S-2 Certificates will
not have a Pass-Through Rate and (B) the Monthly Interest Distributable Amount
for the Class S-1 Certificates and any Distribution Date will be deemed to be
100% of the amount distributed on REMIC 2 Regular Interests MT-S1(1), MT-S1(2)
and MT-S1(3) for such Distribution Date and the Monthly Interest Distributable
Amount for the Class S-2 Certificates and any Distribution Date will be deemed
to be 100% of the amount distributed on REMIC 2 Regular Interests MT-S2(1),
MT-S2(2) and MT-S2(3) for such Distribution Date.
With respect to the Class B Certificates and any Distribution
Date, the lesser of (x) 6.80% per annum and (y) the Pool Net WAC Rate for such
Distribution Date.
39
With respect to the Class C Interest and any Distribution
Date, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (A)
through (I) below, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of the REMIC 2 Regular Interests (other than
REMIC 2 MT-S1(1), MT-S1(2), MT-S1(3), MT-S2(1), MT-S2(2) and MT-S2(3)). For
purposes of calculating the Pass-Through Rate for the Class C Interest, the
numerator is equal to the sum of the following components:
(A) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-AA;
(B) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-A1;
(C) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-A2;
(D) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest Mt-M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-M1;
(E) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-M2;
(F) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-M3;
(G) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-M4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-M4;
(H) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-B; and
(I) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-ZZ.
With respect to the Class C Certificates, 100% of the interest
distributable to the Class C Interest, expressed as a per annum rate.
40
"Paying Agent": Any paying agent appointed pursuant to Section
5.05.
"Percentage Interest": With respect to any Certificate (other
than a Residual Certificate), a fraction, expressed as a percentage, the
numerator of which is the Initial Certificate Principal Balance or Notional
Amount represented by such Certificate and the denominator of which is the
Original Class Certificate Principal Balance or initial Notional Amount of the
related Class. With respect to a Residual Certificate, the portion of the Class
evidenced thereby, expressed as a percentage, as stated on the face of such
Certificate; PROVIDED, HOWEVER, that the sum of all such percentages for each
such Class totals 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 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 and ▇▇▇▇▇▇▇
Mac senior debt obligations, but excluding any of such securities whose
terms do not provide for payment of a fixed dollar amount upon maturity
or call for redemption;
(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 its ultimate parent has a short-term uninsured debt
rating in the highest available rating category of S&P, if rated by
S&P, the highest available rating category of ▇▇▇▇▇'▇, if rated by
▇▇▇▇▇'▇ and the highest rating category of Fitch, if rated by Fitch,
and provided that each such investment has an original maturity of no
more than 365 days; (B) any other demand or time deposit or deposit
which is fully insured by the FDIC; and (C) ▇▇▇▇▇▇▇ Mac participation
certificates and other ▇▇▇▇▇▇▇ Mac guaranteed mortgage-backed
securities with a remaining term to maturity of no more than 365 days;
(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 or higher by S&P, rated A2 or higher by ▇▇▇▇▇'▇ and
rated F-1+ or higher by Fitch, provided, however, that collateral
transferred pursuant to such repurchase obligation must be of the type
described in clause (i) above and must (A) be
41
valued daily at current market prices plus accrued interest or (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 registered under the
Investment Company Act of 1940, including funds managed or advised by
the Trustee or an affiliate of the Trustee, such money market fund
having a rating by at least one of S&P and ▇▇▇▇▇'▇ and (a) a rating by
S&P of "AAA" if rated by S&P, (b) a rating by ▇▇▇▇▇'▇ of "Aaa" if rated
by ▇▇▇▇▇'▇ and (c) a rating by Fitch of "AAA" if rated by Fitch; and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Guarantor and the
NIMS Insurer;
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,
▇▇▇▇▇ 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.
42
"Pool Balance": As of any date of determination, the aggregate
principal balance of the Mortgage Loans in both Loan Groups as of such date.
"Pool Net WAC Rate": A per annum rate (but not less than zero)
equal to the weighted average of:
(a) the Uncertificated REMIC 1 Pass-Through Rate with respect
to REMIC 1 Regular Interest LT1 for such Distribution Date weighted on
the basis of the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1;
(b) the Uncertificated REMIC 1 Pass-Through Rate with respect
to REMIC 1 Regular Interest LT1-PF for such Distribution Date, weighted
on the basis of the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1-PF;
(c) the Uncertificated REMIC 1 Pass-Through Rate with respect
to REMIC 1 Regular Interest LT2 for such Distribution Date weighted on
the basis of the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT2;
(d) the Uncertificated REMIC 1 Pass-Through Rate with respect
to REMIC 1 Regular Interest LT2-PF for such Distribution Date weighted
on the basis of the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT2-PF;
(e) the excess, if any, of (i) the Uncertificated REMIC 1
Pass-Through Rate with respect to REMIC 1 Regular Interests LT-S1 for
such Distribution Date over (ii) (A) in the case of the 1st
Distribution Date through the 10th Distribution Date, 6.00% per annum,
(B) in the case of the 11th Distribution Date through the 20th
Distribution Date, 4.50% per annum, (C) in the case of the 21st
Distribution Date through the 30th Distribution Date, 2.50% per annum
and (D) in the case of any Distribution Date thereafter, 0.00% per
annum, weighted on the basis of the Uncertificated Principal Balance of
REMIC 1 Regular Interest LT-S1;
(f) the excess, if any, of (i) the Uncertificated REMIC 1
Pass-Through Rate with respect to REMIC 1 Regular Interest LT-S2 for
such Distribution Date over (ii) (A) in the case of the 1st
Distribution Date through the 10th Distribution Date, 6.00% per annum,
(B) in the case of the 11th Distribution Date through the 20th
Distribution Date, 4.50% per annum, (C) in the case of the 21st
Distribution Date through the 30th Distribution Date, 2.50% per annum
and (D) in the case of any Distribution Date thereafter, 0.00% per
annum, weighted on the basis of the Uncertificated Principal Balance of
REMIC 1 Regular Interest LT-S2; and
(g) the Uncertificated REMIC 1 Pass-Through Rate with respect
to REMIC 1 Regular Interest LT-P for such Distribution Date, weighted
on the basis of the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT-P.
"Pre-Funding Accounts": The Group I Pre-Funding Account and
the Group II Pre- Funding Account.
"Prepayment Assumption": As defined in the Prospectus
Supplement.
43
"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
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 and the Guarantor.
"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 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.
44
"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 July 1, 2002) and
ending on the Determination Date of the calendar month in which such
Distribution Date occurs.
"Prime Rate": The prime rate of United States money center
commercial banks as published in The Wall Street Journal.
"Principal Balance": As to any Mortgage Loan other than a
Liquidated Mortgage Loan, and any day, the related Cut-off Date Principal
Balance, MINUS all collections credited against the Principal Balance of any
such Mortgage Loan. For purposes of this definition, a Liquidated Mortgage Loan
shall be deemed to have a Principal Balance equal to the Principal Balance of
the related Mortgage Loan as of the final recovery of related Liquidation
Proceeds and a Principal Balance of zero thereafter. As to any REO Property and
any day, the Principal Balance of the related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) the Group I Principal Remittance Amount and
(ii) the Group II Principal Remittance Amount.
"Prospectus Supplement": That certain Prospectus Supplement
dated July 19, 2002 relating to the public offering of the Offered Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, 3.16(c)
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
45
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,
the Guarantor or the Trustee in respect of the breach or defect giving rise to
the purchase obligation.
"Qualified Insurer": Any insurance company acceptable to
▇▇▇▇▇▇▇ Mac.
"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 Agreements 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, have the same Index as
the Deleted Mortgage Loan and have the same Adjustment Date frequency after the
first Adjustment Date as 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 and have
not been 30 or more days delinquent since origination, (ix) have a Loan-to-Value
Ratio as of the date of substitution equal to or lower than the Loan-to- Value
Ratio of the Deleted Mortgage Loan as of such date, (x) have a risk grading
determined by the Originator at least equal to the risk grading assigned on the
Deleted Mortgage Loan, (xi) have been underwritten or reunderwritten by the
Originator in accordance with the same underwriting criteria and guidelines as
the Deleted Mortgage Loan, (xii) with respect to any Group I Mortgage Loan, have
an original Principal Balance within the loan limits prescribed by ▇▇▇▇▇▇▇ Mac
for one- to four-family residential mortgage loans, (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 Agreements applicable to the
Deleted Mortgage Loan, (xv) have the same Due Date as the Deleted Mortgage Loan,
(xvi) not be a Convertible Mortgage Loan unless that Deleted Mortgage Loan was a
Convertible Mortgage Loan and (xvii) be approved by the Guarantor. 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
46
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 (xiv) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.
Notwithstanding the foregoing, within 90 days following the
Startup Day, the Depositor, with the consent of the Guarantor and the NIMS
Insurer, shall be permitted to substitute Mortgage Loans with a Principal
Balance not to exceed 1.00% of the sum of the Cut-off Date Principal Balance of
the Initial Mortgage Loans and the Original Pre-Funded Amounts, so long as the
conditions set forth in Section 2.10(c) are met.
"Rating Agency or Rating Agencies": ▇▇▇▇▇'▇, Fitch 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 and
acceptable to the Guarantor, 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 B Certificates, the Class P Certificates, the Class C Certificates and
the Residual Certificates, the Close of Business on the last Business Day of the
calendar month preceding the month in which the related Distribution Date occurs
and (ii) with respect to the Class A Certificates and the Mezzanine Certificates
(other than the Class B 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-2 Certificate
or a Mezzanine Certificate are available pursuant to Section 5.02(c), 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.
"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.
47
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC 1": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made consisting of: (i) such
Mortgage Loans as from time to time are subject to this Agreement, together with
the Mortgage Files relating thereto, and together with all collections thereon
and proceeds thereof, (ii) any REO Property, together with all collections
thereon and proceeds thereof, (iii) the Trustee's rights with respect to the
Mortgage Loans under all insurance policies required to be maintained pursuant
to this Agreement and any proceeds thereof, (iv) the Depositor's rights under
the Mortgage Loan Purchase Agreements (including any security interest created
thereby), (v) the obligations of the Guarantor to the Holders of the Guaranteed
Certificates under the Guarantee and (vi) 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 Accounts, Pre-Funding
Accounts, the Net WAC Rate Carryover Reserve Account, the Initial Deposit
Accounts, the Excess Net WAC Rate Reserve Fund, any Master Servicer Prepayment
Charge Payment Amounts or any Subsequent Mortgage Loan Interest.
"REMIC 1 Regular Interest LT1": 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 LT1 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 LT1-PF": 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 LT1-PF
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 LT2": 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 LT2 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 LT2-PF": 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 LT2-PF
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,
48
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 LT-S1": 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 LT-S1
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 LT-S2": 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 LT-S2
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 LT-P": 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 LT-P 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 Interests": REMIC 1 Regular Interest LT1,
REMIC 1 Regular Interest LT1-PF, REMIC 1 Regular Interest LT2, REMIC 1 Regular
Interest LT2-PF, REMIC 1 Regular Interest LT-S1, REMIC 1 Regular Interest LT-S2,
and REMIC 1 Regular Interest LT-P.
"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 Group I Pre- Funding Account
and (ii) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest MT-AA minus the Marker Rate, divided by (b) 12.
"REMIC 2 Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to the product of (i) the sum of the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and the amounts on deposit in the Pre- Funding Accounts 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 MT-AA, REMIC 2
Regular Interest MT-A1, REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest
MT-M1, REMIC
49
2 Regular Interest MT-M2, REMIC 2 Regular Interest MT-M3, REMIC 2 Regular
Interest MT-M4, REMIC 2 Regular Interest MT-B, and REMIC 2 Regular Interest
MT-ZZ and the denominator of which is the aggregate of the Uncertificated
Principal Balances of the REMIC 2 Regular Interests (other than REMIC 2 Regular
Interest MT-AA and REMIC 2 Regular Interest MT-P).
"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 (other than REMIC 2 Regular Interests MT-S1(1),
MT-S1(2), MT-S1(3), MT-S2(1), MT-S2(2) and MT- S2(3)) minus (ii) the aggregate
of the Uncertificated Principal Balances of REMIC 2 Regular Interest MT-A1,
REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest MT-M1, REMIC 2 Regular
Interest MT-M2, REMIC 2 Regular Interest MT-M3, REMIC 2 Regular Interest MT-M4
and REMIC 2 Regular Interest MT-B in each case as of such date of determination.
"REMIC 2 Regular Interest MT-AA": 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 MT-AA
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 MT-A1": 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 MT-A1
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 MT-A2": 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 MT-A2
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 MT-M1": 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 MT-M1
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 MT-M2": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC
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2. REMIC 2 Regular Interest MT-M2 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 MT-M3": 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 MT-M3
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 MT-M4": 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 MT-M4
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 MT-B": 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 MT-B 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 MT-ZZ": 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 MT-ZZ
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 MT-P": 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 MT-P 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 MT-S1(1)": 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 MT-S1(1)
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall not be entitled to distributions of
principal.
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"REMIC 2 Regular Interest MT-S1(2)": 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 MT-S1(2)
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall not be entitled to distributions of
principal.
"REMIC 2 Regular Interest MT-S1(3)": 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 MT-S1(3)
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall not be entitled to distributions of
principal.
"REMIC 2 Regular Interest MT-S2(1)": 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 MT-S2(1)
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall not be entitled to distributions of
principal.
"REMIC 2 Regular Interest MT-S2(2)": 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 MT-S2(2)
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall not be entitled to distributions of
principal.
"REMIC 2 Regular Interest MT-S2(3)": 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 MT-S2(3)
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall not be entitled to distributions of
principal.
"REMIC 2 Regular Interests": REMIC 2 Regular Interest MT-AA,
REMIC 2 Regular Interest MT-A1, REMIC 2 Regular Interest MT-A2, REMIC 2 Regular
Interest MT-M1, REMIC 2 Regular Interest MT-M2, REMIC 2 Regular Interest MT-M3,
REMIC 2 Regular Interest MT-M4, REMIC 2 Regular Interest MT-B, REMIC 2 Regular
Interest MT-ZZ, REMIC 2 Regular Interest MT-S1(1), REMIC 2 Regular Interest
MT-S1(2), REMIC 2 Regular Interest MT-S1(3), REMIC 2 Regular Interest MT-S2(1),
REMIC 2 Regular Interest MT-S2(2), REMIC 2 Regular Interest MT-S2(3) and REMIC 2
Regular Interest MT-P.
"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 4": The segregated pool of assets consisting of the
Class C Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class C Certificates and the
52
Class R-X Certificates (in respect of the Class R-4 Interest), pursuant to
Article II hereunder, and all amounts deposited therein, with respect to which a
separate REMIC election is to be made.
"REMIC 5": The segregated pool of assets consisting of the
Class P Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class P Certificates and the Class R-X Certificates (in respect
of the Class R-5 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, the
REMIC 2 Regular Interests, the Class C Interest and the Class P Interest.
"Remittance Report": A report prepared by the Master Servicer
and delivered to the Trustee, the Guarantor 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 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.
53
"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.
"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 ▇▇▇▇▇▇▇ Mac 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 Certificates": The Class R Certificates and the
Class R-X Certificates.
"Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee,
the Chairman or Vice Chairman of the Board of Directors or Trustees, the
Chairman or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, any vice president, any assistant vice
president, the Secretary, any assistant secretary, the Treasurer, any assistant
treasurer, the Cashier, any assistant cashier, any trust officer or assistant
trust officer, the Controller and any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and, with respect to a particular matter,
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"S&P": Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or its successor in interest.
"Seller": Any one or all of: (i) Option One Mortgage
Corporation, a California corporation or (ii) Option One Owner Trust 2001-1A,
Option One Owner Trust 2001-1B, Option One Owner Trust 2001-2 and/or Option One
Owner Trust 2002-3, 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
54
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": 0.50% per annum.
"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 in accordance with this Agreement.
"Special Sub-Servicer": ▇▇▇▇▇▇ Loan Servicing LP, a Delaware
limited partnership, in its capacity as Special Sub-Servicer of the Specially
Serviced Mortgage Loans.
"Specially Serviced Mortgage Loan": As defined in the Special
Sub-Servicing Agreement.
"Special Sub-Servicing Agreement": The Special Sub-Servicing
Agreement, dated the Closing Date, among the Master Servicer, the Special
Sub-Servicer and Credit-Based Asset Servicing and Securitization LLC, as
accepted and agreed by the Guarantor, the NIMS Insurer and as acknowledged by
the Trustee, regarding the servicing of the Specially Serviced Mortgage Loans by
the Special Sub-Servicer, substantially in the form attached hereto as Exhibit
T.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the outstanding principal balance of such
Mortgage Loan as of the Cut-off Date (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
55
or before such date of determination, and (iv) any Realized Loss incurred with
respect thereto as a result of a Deficient Valuation made during or prior to the
Due Period for the most recent Distribution Date coinciding with or preceding
such date of determination; and (b) as of any date of determination coinciding
with or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of the Trust Fund, minus the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stepdown Date": The earlier to occur of (a) the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A
Certificates has been reduced to zero and (b) the later to occur of (i) the
Distribution Date occurring in August 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 Group I Principal Distribution Amount and the Group II
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date) is equal to or greater than 38.00%. The
Overcollateralization Target Amount will not be permitted to "step down" on the
Stepdown Date or on any other date.
"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 Group I Mortgage Loan": A Subsequent Mortgage Loan
to be included in Loan Group I.
"Subsequent Group II Mortgage Loan": A Subsequent Mortgage
Loan to be included in Loan Group II.
"Subsequent Mortgage Loan": A Mortgage Loan sold by the
Depositor to the Trust Fund pursuant to Section 2.10, 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
(adjusted for the payments of the Guarantee Fee and the Trustee Fee) with
respect to a Group I Subsequent Mortgage Loan during the Due Periods relating to
the first three Distribution Dates in excess of 2.87439% per annum and any
amount constituting a monthly payment of interest received or advanced at the
Net Mortgage Rate (adjusted for the payment of the Trustee Fee) with respect to
a Group II Subsequent Mortgage Loan
56
during the Due Periods relating to the first three Distribution Dates in excess
of 2.8987% 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 Agreements": The agreements
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 R, 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 average for the three most
recent calendar months of the fraction, expressed as a percentage, the numerator
of which is (x) the sum (without duplication) of the aggregate of the Principal
Balances of all Mortgage Loans that are (i) 60 or more days Delinquent,
57
(ii) in bankruptcy and 60 or more days Delinquent, (iii) in foreclosure and 60
or more days Delinquent or (iv) REO Properties, and the denominator of which is
(y) the sum of the 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 45.00% 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 Amounts exceeds the applicable percentages set
forth below with respect to such Distribution Date:
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
------------------------------ ----------
August 2005 through July 2006 3.00%
August 2006 through July 2007 4.00%
August 2007 through July 2008 4.75%
August 2008 through July 2009 5.25%
August 2009 and thereafter 5.50%
"Trust": Option One Mortgage Loan Trust 2002-5, 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, REMIC 3, REMIC 4 and
REMIC 5, the Interest Coverage Accounts, the Pre-Funding Accounts, the Net WAC
Rate Carryover Reserve Account, the Initial Deposit Accounts and the Excess Net
WAC Rate Reserve Fund.
"Trust REMICs": REMIC 1, REMIC 2, REMIC 3, REMIC 4 and REMIC
5.
"Trustee": ▇▇▇▇▇ 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 4.01 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
58
previous Distribution Date, to the extent received or advanced) and any amount
in the Pre-Funding Accounts 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.
"Trustee Remittance Report": As defined in Section 4.09(a).
"Trustee Reporting Date": With respect to any Distribution
Date, the fifth Business Day prior to such Distribution Date.
"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
LT-S1 or REMIC 1 Regular Interest LT-S2, as applicable, 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 Interests MT-S1(1), MT-S1(2),
MT-S1(3), MT-S2(1), MT-S2(2) and MT-S2(3)), 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 Interests MT-S1(1), MT-S1(2), MT-S1(3), MT-S2(1), MT-S2(2) and
MT- S2(3)) 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 MT-ZZ shall be increased by interest deferrals as
provided in Section 4.08. With respect to the Class C Interest as of any date of
determination, an amount equal to the excess, if any, of (A) the then aggregate
Uncertificated Principal Balances of the REMIC 1 Regular Interests over (B) the
then aggregate Certificate Principal Balances of the Class A Certificates, the
Mezzanine Certificates and the Class P Interest then outstanding. The
Uncertificated Principal Balance of each REMIC Regular Interest that has an
Uncertificated Principal Balance shall never be less than zero. REMIC 2 Regular
Interests MT-S1(1), MT-S1(2), MT-S1(3), MT-S2(1), MT-S2(2) and MT-S2(3) will not
have Uncertificated Principal Balances.
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"Uncertificated REMIC 1 Pass-Through Rate": With respect to
the REMIC I Regular Interests, the weighted average of the Adjusted Net Mortgage
Rates (less the Adjusted 30/360 Guarantee Fee Rate) of the Initial Mortgage
Loans for such Distribution Date; provided, however, (x) with respect to REMIC 1
Regular Interest LT1-PF, (i) for the first three Distribution Dates, 2.87439%
and (ii) for each Distribution Date thereafter, the weighted average of the
Adjusted Net Mortgage Rates (less the Adjusted 30/360 Guarantee Fee Rate) of the
Group I Mortgage Loans for such Distribution Date and (y) with respect to REMIC
1 Regular Interest LT2-PF, (i) for the first three Distribution Dates, 2.8987%
and (ii) for each Distribution Date thereafter, the weighted average of the
Adjusted Net Mortgage Rates of the Group II Mortgage Loans for such Distribution
Date.
"Uncertificated REMIC 2 Pass-Through Rate":
(A) With respect to REMIC 2 Regular Interest MT-AA, REMIC 2
Regular Interest MT-A1, REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest
MT-M1, REMIC 2 Regular Interest MT-M2, REMIC 2 Regular Interest MT-M3, REMIC 2
Regular Interest MT-M4, REMIC 2 Regular Interest MT-B and REMIC 2 Regular
Interest MT-P for such Distribution Date the Pool Net WAC Rate;
(B) With respect to REMIC 2 Regular Interest MT-S1(1) and the
first 30 Distribution Dates, 2.50%, and with respect to REMIC 2 Regular Interest
MT-S1(1) and any Distribution Date thereafter, 0.00% per annum;
(C) With respect to REMIC 2 Regular Interest MT-S1(2) and the
first 20 Distribution Dates, 2.00%, and with respect to REMIC 2 Regular Interest
MT-S1(2) and any Distribution Date thereafter, 0.00% per annum;
(D) With respect to REMIC 2 Regular Interest MT-S1(3) and the
first 10 Distribution Dates, 1.50%, and with respect to REMIC 2 Regular Interest
MT-S1(3) and any Distribution Date thereafter, 0.00% per annum;
(E) With respect to REMIC 2 Regular Interest MT-S2(1) and the
first 30 Distribution Dates, 2.50%, and with respect to REMIC 2 Regular Interest
MT-S2(1) and any Distribution Date thereafter, 0.00% per annum;
(F) With respect to REMIC 2 Regular Interest MT-S2(2) and the
first 20 Distribution Dates, 2.00%, and with respect to REMIC 2 Regular Interest
MT-S2(2) and any Distribution Date thereafter, 0.00% per annum; and
(G) With respect to REMIC 2 Regular Interest MT-S2(3) and the
first 10 Distribution Dates, 1.50%, and with respect to REMIC 2 Regular Interest
MT-S2(3) and any Distribution Date thereafter, 0.00% per annum.
"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.
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"United States Person" or "U.S. Person": A citizen or resident
of the United States, a corporation, partnership (or other entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in, or under the laws of, the United States, any state
thereof, or the District of Columbia (except in the case of a partnership, to
the extent provided in Treasury regulations) provided that, for purposes solely
of the restrictions on the transfer of Residual Certificates, no partnership or
other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are required by
the applicable operative agreement to be United States Persons, or an estate the
income of which from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to the
Certificates (other than the Class C Certificates, the Class P Certificates and
the Residual 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. Because the Monthly Interest Distributable Amount for any Class
of Certificates, by definition, is limited to interest on such Class at the
Pass-Through Rate thereon, any Net WAC Rate Carryover Amount, by definition,
will not be included within any Unpaid Interest Shortfall Amount with respect to
the Class A Certificates, the Class S Certificates or the Mezzanine
Certificates.
"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 ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ 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
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Mortgage Loan (which is a Mortgage Loan the proceeds of which
were not used to purchase the related Mortgaged Property) or a
Mortgage Loan originated in connection with a "lease option
purchase" if the "lease option purchase price" was set 12
months or more prior to origination, such value of the
Mortgaged Property is based solely upon clause (i) above.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates shall have
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
Residual 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 Residual Certificates) shall be allocated among all Holders of each such
Class in proportion to the outstanding Certificate Principal Balance or Notional
Amount of such Certificates and the Voting Rights allocated to the Class P
Certificates and the Residual Certificates shall be allocated among all Holders
of each such Class in proportion to such Holders' respective Percentage
Interest; PROVIDED, HOWEVER that when none of the Regular Certificates are
outstanding, 100% of the Voting Rights shall be allocated among Holders of the
Residual Certificates in accordance with such Holders' respective Percentage
Interests in the Certificates of such Class. Notwithstanding any of the
foregoing, on any date on which any Guaranteed Certificates are outstanding or
any amounts are owed to the Guarantor under this Agreement, all of the Voting
Rights allocated to the Guaranteed Certificates shall be vested in the
Guarantor.
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 Class A Certificates, the
Class S Certificates and the Mezzanine Certificates, on a PRO RATA basis based
on, and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Certificate Principal Balance 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
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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 Interest Shortfalls and any Relief
Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated (i) with respect to the Group I Mortgage
Loans, first, to REMIC 1 Regular Interest LT1 and REMIC 1 Regular Interest
LT1-PF and then to REMIC 1 Regular Interest LT-S1, 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 Group I
Mortgage Loans shall be allocated first, to REMIC 1 Regular Interest LT1 and
then to REMIC 1 Regular Interest LT-S1, and such amounts relating to the
Subsequent Group I Mortgage Loans shall be allocated to REMIC 1 Regular Interest
LT1-PF and (ii) with respect to the Group II Mortgage Loans, first, to REMIC 1
Regular Interest LT2 and REMIC 1 Regular Interest LT2-PF and then to REMIC 1
Regular Interest LT-S2, 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 Group II Mortgage Loans shall be allocated
first, to REMIC 1 Regular Interest LT2 and then to REMIC 1 Regular Interest
LT-S2, and such amounts relating to the Subsequent Group II Mortgage Loans shall
be allocated to REMIC 1 Regular Interest LT2-PF.
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 (i) the Group I Mortgage Loans
for any Distribution Date shall be allocated first, to Uncertificated Accrued
Interest payable to REMIC 2 Regular Interest MT-AA and REMIC 2 Regular Interest
MT-ZZ 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
MT-AA, REMIC 2 Regular Interest MT-A1, REMIC 2 Regular Interest MT-M1, REMIC 2
Regular Interest MT-M2, REMIC 2 Regular Interest MT-M3, REMIC 2 Regular Interest
MT-M4, REMIC 2 Regular Interest MT-B and REMIC 2 Regular Interest MT-ZZ 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 and (ii) the Group II Mortgage Loans for any Distribution Date shall be
allocated first, to Uncertificated Accrued Interest payable to REMIC 2 Regular
Interest MT-AA and REMIC 2 Regular Interest MT-ZZ 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 MT-AA, REMIC 2 Regular Interest
MT-A2, REMIC 2 Regular Interest Mt-M1, REMIC 2 Regular Interest MT-M2, REMIC 2
Regular Interest MT-M3, REMIC 2 Regular Interest MT-M4, REMIC 2 Regular Interest
MT-B and REMIC 2 Regular Interest MT-ZZ 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.
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SECTION 1.04. Rights of the NIMS Insurer and the
Guarantor.
(a) 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.
(b) Notwithstanding anything to the contrary anywhere in this
Agreement, all rights and benefits of the NIMS Insurer hereunder shall
permanently terminate upon the later to occur of (A) such time as the notes
insured by the NIMS Insurer shall no longer be outstanding and (B) the payment
in full to the NIMS Insurer of any amounts owed to the NIMS Insurer in respect
of its guarantee of payment on such notes.
(c) The rights of the NIMS Insurer or the Guarantor referenced
in Sections 3.02(a), 3.03, 6.04, 7.01, 7.02(a) and 7.03 of this Agreement shall
be applied as follows:
(i) In the event that the Class M-2 Certificates are rated by
two of three Rating Agencies as follows: at least "A" (in the case of
Fitch and/or S&P) or "A2" (in the case of ▇▇▇▇▇'▇), the ▇▇▇▇ Insurer
shall have the right to act, after consultation with the Guarantor;
(ii) In the event that (x) the rating of the Class M-2
Certificates is reduced by two of the three Rating Agencies to less
than "A" or "A2" and (y) the Class M-3 Certificates, the Class M-4
Certificates and the Class B Certificates have an aggregate Certificate
Principal Balance greater than zero and/or the Overcollateralized
Amount is greater than zero, the NIMS Insurer and the Guarantor each
shall have the right to act, upon the receipt of the reasonable consent
of the other; and
(iii) In the event that (x) the rating of the Class M-2
Certificates is reduced by two of the three Rating Agencies to less
than "A" or "A2" and (y) the Class M-3 Certificates, the Class M-4
Certificates and the Class B Certificates have no aggregate Certificate
Principal Balance and the Overcollateralized Amount is equal to zero,
the Guarantor shall have the sole right to act.
The NIMS Insurer and the Guarantor shall promptly consult each
other with regard to the rights referred to in this sub-section. If this
consultation would create a delay that would have a material adverse effect on
this Agreement, each party may act individually with respect to their rights and
consult with the other party after such action has been taken. Any consents
required between the NIMS Insurer and the Guarantor shall not be unreasonably
withheld or delayed.
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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 and the
Guarantor all the right, title and interest of the Depositor, including any
security interest therein for the benefit of the Depositor, in and to (i) each
Mortgage Loan identified on the Mortgage Loan Schedule, including the related
Cut-off Date Principal Balance, all interest accruing thereon on and after the
Cut-off Date and all collections in respect of interest and principal due after
the Cut-off Date; (ii) property which secured each such Mortgage Loan and which
has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its
interest in any insurance policies in respect of the Mortgage Loans; (iv) the
rights of the Depositor under the Mortgage Loan Purchase Agreements, (v) the
Original Pre-Funded Amounts, (vi) all other assets included or to be included in
the Trust Fund, (vii) the Initial Deposit and (viii) 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 2.10,
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 ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as Trustee for registered Holders of
Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5, 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
65
attorney, as the case may be, certified to be a true and complete copy
of the original submitted for recording;
(iii) an original Assignment, in form and substance acceptable
for recording. The Mortgage shall be assigned either (A) in blank or
(B) to "▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Trustee
for registered Holders of Option One Mortgage Loan Trust 2002-5,
Asset-Backed Certificates, Series 2002-5, 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 Depositor does hereby deliver to, and deposit with the
Trustee, the Initial Deposit, the Interest Coverage Amounts, the Original
Pre-Funded Amounts and $1,000 cash for deposit into the Net WAC Rate Carryover
Account, for the uses and purposes set forth herein, and the Trustee hereby
acknowledges receipt of the same. The Depositor shall, in accordance with
Section 2.10, deliver or cause to be delivered to, and deposited with the
Trustee or the Custodian the Mortgage File with respect to each Subsequent
Mortgage Loan.
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
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 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 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 Originator 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.
66
Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File, the
Originator shall have 90 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 Originator
shall either repurchase or substitute for such Mortgage Loan in accordance with
Section 2.03.
The 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 Originator 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). 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.
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 Guarantor, 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 the Guarantor or the 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 Originator, (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 (v)
and (vi) above) set forth in the preceding sentence or (b) upon the occurrence
of condition (v) or (vi) in the preceding sentence, the Depositor shall be
required to deliver such Assignments for recording as provided above, promptly
and in any event within 30 days following receipt of such notice.
Notwithstanding the foregoing, if the Originator fails to pay the cost of
recording the Assignments, such expense will be paid by the Master Servicer, and
if the Master Servicer 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.
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 forty-five (45) days of the Closing Date (or Subsequent
Transfer Date, with respect to Subsequent Mortgage Loans) the Originator shall
cause to be completed such endorsements "Pay to the order of ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as Trustee for registered Holders of Option One
Mortgage Loan Trust 2002-5, Asset-Backed Certificates, Series 2002-5, without
recourse. "
67
The Depositor herewith delivers to the Trustee and the
Guarantor an executed copy of the Mortgage Loan Purchase Agreements.
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 270 days of its submission for recordation. In the
event that the Master Servicer cannot provide a copy of such document certified
by the public recording office within such 270 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 of REMIC 1 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 "REMIC 1" 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 and the Guarantor.
The Trustee agrees to execute and deliver (or cause the
Custodian to execute and deliver) to the Depositor, the Guarantor 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.
The Trustee agrees, for the benefit of the Certificateholders
and the Guarantor, to review (or to cause the Custodian to review) each Mortgage
File within 45 days after the Closing Date, with respect to each Initial
Mortgage Loan or 45 days after 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 and the Guarantor, to
certify to the Depositor, the Master Servicer, the Guarantor 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,
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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.
Prior to the date that is 180 days following the date of this
Agreement the Trustee shall deliver (or cause the Custodian to deliver) to the
Depositor, the Master Servicer, the Guarantor 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 Guarantor, the NIMS Insurer and the Master
Servicer. In addition, upon the discovery by the Originator, the Depositor, the
Guarantor, 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 Agreements in respect of any Mortgage Loan which materially adversely
affects such Mortgage Loan or the interests of the related Certificateholders or
the Guarantor 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 the Guarantor 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.
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(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 Agreements or in Section 2.04 in
respect of any Mortgage Loan which materially adversely affects the value of
such Mortgage Loan or the interest therein of the Certificateholders or the
Guarantor (it being understood that with respect to the representations and
warranties set forth in (xl) through (xliii) of Exhibit A to the Mortgage Loan
Purchase Agreements, a breach of any such representation shall be deemed to
materially adversely affect the interests of the Guarantor), the Trustee shall
promptly notify the Originator, the NIMS Insurer, the Guarantor 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 90
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
Agreements 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 90 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 90 day period, if the Originator shall have commenced to cure
such breach within such 90 day period, the Originator shall be permitted to
proceed thereafter diligently and expeditiously to cure the same within the
additional period provided under the Mortgage Loan Purchase Agreements. The
Purchase Price for the repurchased Mortgage Loan shall be delivered by the
Originator to the Master Servicer for deposit 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
and the Guarantor.
(b) The Originator indemnifies and holds the Trust Fund, the
Trustee, the Depositor, the Guarantor, the NIMS Insurer and each
Certificateholder harmless against any and all taxes, claims, losses, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments, and any
other costs, fees and expenses that the Trust Fund, the Trustee, the Depositor,
the Guarantor, the NIMS Insurer and any Certificateholder may sustain in
connection with any actions of the Originator relating to a repurchase of a
Mortgage Loan other than in compliance with the terms of this Section 2.03, to
the extent that any such action causes (a) any federal or state 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
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860G(d)(l) of the Code, or (b) any Trust REMIC to fail to qualify as a REMIC at
any time that any Certificate is outstanding.
(c) 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
or the Guarantor in any Mortgage Loan, the Depositor shall cure such breach in
all material respects.
(d) 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 or the Guarantor in any Mortgage Loan, the Master Servicer
shall cure such breach in all material respects.
(e) 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, the Guarantor 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, the Guarantor
and the NIMS Insurer a certification substantially in the form of Exhibit F-2
hereto with respect to such Qualified Substitute Mortgage Loan or Loans, with
any applicable exceptions noted thereon. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution are not part of
the Trust Fund and will be retained by the Originator. For the month of
substitution, distributions to Certificateholders will reflect the collections
and recoveries in respect of such Deleted Mortgage Loan in the Due Period
preceding the month of substitution and the Originator shall thereafter be
entitled to retain all amounts subsequently received in respect of such Deleted
Mortgage Loan. The Originator shall give or cause to be given written notice to
the Guarantor not less than 10 Business Days prior to the related Determination
Date of its intention to effect such substitution, and if such notice from the
Originator to the Guarantor shall contain all information that the Guarantor may
require to conduct its due diligence evaluation of each mortgage loan proposed
to be substituted (including the complete and final data file of each such
mortgage loan), then the Guarantor shall grant or withhold its approval of the
mortgage loans proposed to be substituted not less than 3 Business Days prior to
such Determination Date. The Originator shall give or cause to be given written
notice to the Certificateholders, the Guarantor 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
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of the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of
such amended Mortgage Loan Schedule to the Guarantor, 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 Agreements, including all applicable representations and warranties
thereof included in the Mortgage Loan Purchase Agreements 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, the Guarantor and the NIMS Insurer an Opinion of
Counsel, to be delivered not less than 10 Business Days prior to the related
Determination Date, 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 Trust 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.
(f) Upon discovery by the Originator, the Master Servicer, the
Guarantor, the NIMS Insurer or the Trustee that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the party discovering such fact shall within two Business Days give
written notice thereof to the other parties. In connection therewith, the
Originator or the Depositor, as the case may be, shall repurchase or, subject to
the limitations set forth in Section 2.03(d), substitute one or more Qualified
Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the
earlier of discovery or receipt of such notice with respect to such affected
Mortgage Loan. Such repurchase or substitution shall be made (i) by the
Originator if the affected Mortgage Loan's status as a non-qualified mortgage is
or results from a breach of any representation, warranty or covenant made by the
Originator under the Mortgage Loan Purchase Agreements 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). The Trustee shall reconvey to the Depositor or
the Originator, as the case may be, the Mortgage Loan to be released
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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. Representations and Warranties of
the Originator with Respect to the
Mortgage Loans.
The Originator hereby represents and warrants to the Guarantor
and the Trustee for the benefit of the Certificateholders that as of the Closing
Date or as of such other date specifically provided herein:
(a) The representations and warranties made by the Originator
pursuant to Section 3.01 of the Mortgage Loan Purchase Agreements are
hereby being made to the Guarantor and the Trustee for the benefit of
the Certificateholders and are true and correct as of the Closing Date
or as of such other date specifically provided therein.
(b) Any written agreement between the Mortgagor in respect of
a Mortgage Loan and the Originator or the Master Servicer modifying
such Mortgagor's obligation to make payments under such Mortgage Loan
applied the Originator's or the Master Servicer's underwriting
standards or reflected a good faith assessment of such Mortgagor's
ability to repay the modified Mortgage Loan.
With respect to the representations and warranties set forth
or referred to in this Section 2.04 that are made to the best of the
Originator's knowledge or as to which the Originator has no knowledge, if it is
discovered by the Depositor, the Guarantor, the Originator, the Master Servicer
or the Trustee that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan or the interest therein of the Certificateholders or the
Guarantor 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 or warranty was made, such inaccuracy shall be deemed a
breach of the applicable representation or warranty.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Certificateholders
and the Guarantor notwithstanding any restrictive or qualified endorsement or
assignment. Upon discovery by any of the Depositor, the Guarantor, the NIMS
Insurer, the Master Servicer, the Originator or the Trustee of a breach of any
of the foregoing representations and warranties which materially and adversely
affects the value of any Mortgage Loan or the interests therein of the
Certificateholders or the Guarantor, the party discovering such breach shall
give prompt written notice to the other parties and the Guarantor, and in no
event later than two Business Days from the date of such discovery. Within 90
days of its discovery or its receipt of notice of any such missing or materially
defective documentation or any such breach of a representation or warranty, the
Originator shall promptly deliver such missing document or cure such defect or
breach in all material respects, or in the event such defect or breach cannot be
cured, the Originator shall repurchase the affected Mortgage Loan or cause the
removal of such Mortgage Loan from the Trust Fund and substitute for it one or
more Qualified Substitute Mortgage Loans, in either case, in accordance with
Section 2.03. It is understood and agreed that the obligations of the Originator
set
73
forth in Section 2.03(a) to cure, substitute for or repurchase a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreements constitute the sole remedies
available to the Certificateholders, the Guarantor or to the Trustee on their
behalf respecting a breach of the representations and warranties contained in
this Section 2.04. The Originator represents that the Originator's obligations
with respect to the representations and warranties in Sections 2.04 and 2.10 of
this Agreement are guaranteed by Block Financial Corporation and H&R Block, Inc.
SECTION 2.05. Representations, Warranties and
Covenants of the Master Servicer.
The Master Servicer hereby represents, warrants and covenants
to the Trustee and the Guarantor, for the benefit of each of the Trustee, the
Guarantor and the Certificateholders and to the Depositor that as of the Closing
Date or as of such date specifically provided herein:
(i) The Master Servicer is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
formation and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing in
the states where the Mortgaged Property is located if the laws of such
state require licensing or qualification in order to conduct business
of the type conducted by the Master Servicer or to ensure the
enforceability or validity of each Mortgage Loan; the Master Servicer
has the power and authority to execute and deliver this Agreement and
to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of transfer to
be delivered pursuant to this Agreement) by the Master Servicer and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Master Servicer, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally; and all
requisite corporate action has been taken by the Master Servicer to
make this Agreement valid and binding upon the Master Servicer in
accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer
and will not result in the breach of any term or provision of the
charter or by-laws of the Master Servicer or result in the breach of
any term or provision of, or conflict with or constitute a default
under or result in the acceleration of any obligation under, any
agreement, indenture or loan or credit agreement or other instrument to
which the Master Servicer or its property is subject, or result in the
violation of any law, rule, regulation, order, judgment or decree to
which the Master Servicer or its property is subject;
(iii) The execution and delivery of this Agreement by the
Master Servicer and the performance and compliance with its obligations
and covenants hereunder do not require the consent or approval of any
governmental authority or, if such consent or approval is required, it
has been obtained;
(iv) This Agreement, and all documents and instruments
contemplated hereby which are executed and delivered by the Master
Servicer, constitute and will constitute valid,
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legal and binding obligations of the Master Servicer, enforceable in
accordance with their respective terms, except as the enforcement
thereof may be limited by applicable bankruptcy laws and general
principles of equity;
(v) [Reserved]
(vi) The Master Servicer does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(vii) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against the Master Servicer
that, either individually or in the aggregate, (A) may result in any
change in the business, operations, financial condition, properties or
assets of the Master Servicer that might prohibit or materially and
adversely affect the performance by such Master Servicer of its
obligations under, or validity or enforceability of, this Agreement, or
(B)may result in any material impairment of the right or ability of the
Master Servicer to carry on its business substantially as now
conducted, or (C) may result in any material liability on the part of
the Master Servicer, or (D) would draw into question the validity or
enforceability of this Agreement or of any action taken or to be taken
in connection with the obligations of the Master Servicer contemplated
herein, or (E) would otherwise be likely to impair materially the
ability of the Master Servicer to perform under the terms of this
Agreement;
(viii) Neither this Agreement nor any information, certificate
of an officer, statement furnished in writing or report delivered to
the Trustee or the Guarantor by the Master Servicer in connection with
the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements contained therein, in light of the circumstances
under which they were made, not misleading (except to the extent that
any such information, statement or report has been corrected or
superseded in writing by the Master Servicer as of the Closing Date, it
being understood (i) that the Master Servicer has delivered no
certificate of an officer prior to the Closing Date and (ii) that any
representations, warranties and indemnifications as to the accuracy and
completeness of the Information Circular or the Prospectus Supplement
made by Option One Mortgage Corporation in agreements and Officers'
Certificates delivered by Option One Mortgage Corporation on the
Closing Date in connection with the transactions contemplated by this
Agreement shall be interpreted such that the information in the
Information Circular and the Prospectus Supplement is deemed to correct
and/or supersede as of the Closing Date, within the meaning of this
parenthetical, any information, statement or report delivered by the
Master Servicer to the Trustee or the Guarantor prior to the Closing
Date that is inconsistent with the information in the Information
Circular or the Prospectus Supplement or that was omitted from such
information, statement or report delivered prior to the Closing Date);
(ix) 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
75
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;
(x) The Master Servicer will not waive any Prepayment Charge
unless it is waived in accordance with the standard set forth in
Section 3.01; and
(xi) The Master Servicer has fully furnished, in accordance
with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on
its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company or their successors (the "Credit Repositories") on
a monthly basis.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, the Depositor, the Guarantor and the Certificateholders. Upon discovery
by any of the Depositor, the Guarantor, 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 or the Guarantor, 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 Guarantor,
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 set forth
in Sections 2.05(ix) or 2.05(x) 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 Section 2.05(ix) 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(ix)
above), the Master Servicer 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(x) 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 Guarantor, the Depositor or the Trustee on behalf of the
Certificateholders, pursuant to the Mortgage Loan Purchase Agreements,
respecting a breach of the representations, warranties and covenants of the
Originator contained in the Mortgage Loan Purchase Agreements.
76
The Master Servicer represents that the Master Servicer's
obligations with respect to the representations and warranties in Section 2.05
of this Agreement are guaranteed by Block Financial Corporation and H&R Block,
Inc.
SECTION 2.06. Representations and Warranties of
the Depositor.
The Depositor represents and warrants to the Guarantor and the
Trustee on behalf of the Certificateholders as follows:
(i) This Agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
the Depositor had good and marketable title to each Mortgage Loan
(insofar as such title was conveyed to it by the Seller) subject to no
prior lien, claim, participation interest, mortgage, security interest,
pledge, charge or other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred
all right, title and interest in the Mortgage Loans to the Trustee on
behalf of the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to
the Trustee on behalf of the Trust with any intent to hinder, delay or
defraud any of its creditors;
(v) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with full corporate power and authority to own its assets and conduct
its business as presently being conducted;
(vi) The Depositor is not in violation of its articles of
incorporation or by-laws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Depositor is a party or by which it or
its properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or
business of the Depositor or which might materially and adversely
affect the properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this
Agreement by the Depositor, and the consummation of the transactions
contemplated thereby, do not and will not result in a material breach
or violation of any of the terms or provisions of, or, to the knowledge
of the Depositor, constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Depositor is a party or by which the Depositor is bound or to which
any of the property or assets of the Depositor is subject,
77
nor will such actions result in any violation of the provisions of the
articles of incorporation or by-laws of the Depositor or, to the best
of the Depositor's knowledge without independent investigation, any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Depositor or any of its
properties or assets (except for such conflicts, breaches, violations
and defaults as would not have a material adverse effect on the ability
of the Depositor to perform its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States or any other jurisdiction is
required for the issuance of the Certificates, or the consummation by
the Depositor of the other transactions contemplated by this Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as (a) may be required under State securities or Blue
Sky laws, (b) have been previously obtained or (c) the failure of which
to obtain would not have a material adverse effect on the performance
by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations
pending before or, to the Depositor's knowledge, threatened by any
court, administrative agency or other tribunal to which the Depositor
is a party or of which any of its properties is the subject: (a) which
if determined adversely to the Depositor would have a material adverse
effect on the business, results of operations or financial condition of
the Depositor; (b) asserting the invalidity of this Agreement or the
Certificates; (c) seeking to prevent the issuance of the Certificates
or the consummation by the Depositor of any of the transactions
contemplated by this Agreement, as the case may be; or (d) which might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this
Agreement.
SECTION 2.07. Representations and Warranties of
the Originator.
The Originator hereby represents and warrants to the Guarantor
and the Trustee on behalf of the Certificateholders that as of the Closing Date
or as of such date specifically provided herein:
(i) The Originator is duly organized, validly existing and in
good standing as a corporation under the laws of the State of
California and has the power and authority to own its assets and to
transact the business in which it is currently engaged. The Originator
is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in
which the failure to so qualify would have a material adverse effect on
(a) its business, properties, assets or condition (financial or other),
(b) the performance of its obligations under this Agreement, (c) the
value or marketability of the Mortgage Loans, or (d) its ability to
foreclose on the related Mortgaged Properties.
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(ii) The Originator has the power and authority to make,
execute, deliver and perform this Agreement and to consummate all of
the transactions contemplated hereunder and has taken all necessary
action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute
the Originator's legal, valid and binding obligations enforceable in
accordance with its terms, except as enforcement of such terms may be
limited by (1) bankruptcy, insolvency, reorganization, receivership,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies, (2)
general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law) or (3) public policy
considerations underlying the securities laws, to the extent that such
policy considerations limit the enforceability of provisions of this
Agreement, if any, which purport to provide indemnification from
securities laws liabilities.
(iii) The Originator holds all necessary licenses,
certificates and permits from all governmental authorities necessary
for conducting its business as it is presently conducted. It is not
required to obtain the consent of any other party or any consent,
license, approval or authorization from, or registration or declaration
with, any governmental authority, bureau or agency in connection with
the execution, delivery, performance, validity or enforceability of
this Agreement, except for such consents, licenses, approvals or
authorizations, or registrations or declarations as shall have been
obtained or filed, as the case may be, prior to the Closing Date.
(iv) The execution, delivery and performance of this Agreement
by the Originator will not conflict with or result in a breach of, or
constitute a default under, any provision of any existing law or
regulation or any order or decree of any court applicable to the
Originator or any of its properties or any provision of its articles of
incorporation or by-laws, or constitute a material breach of, or result
in the creation or imposition of any lien, charge or encumbrance upon
any of its properties pursuant to any mortgage, indenture, contract or
other agreement to which it is a party or by which it may be bound.
(v) The transactions contemplated by this Agreement are in the
ordinary course of the Originator's business.
(vi) The Originator is not insolvent, nor is the Originator
aware of any pending insolvency. The Seller is not insolvent, nor will
the Seller be made insolvent by the transfer of the Mortgage Loans to
the Depositor, nor is the Originator aware of any pending insolvency of
the Seller.
(vii) The Originator is not in violation of, and the execution
and delivery of this Agreement by it 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, which violation would materially and adversely affect the
Originator's condition (financial or otherwise) or operations or any of
the Originator's properties, or materially and adversely affect the
performance of any of its duties hereunder.
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(viii) There are no actions or proceedings against, or
investigations of, the Originator pending or, to its knowledge,
threatened, before any court, administrative agency or other tribunal
(i) that, if determined adversely, would prohibit the Originator from
entering into this Agreement, (ii) seeking to prevent the consummation
of any of the transactions contemplated by this Agreement or (iii)
that, if determined adversely, would prohibit or materially and
adversely affect the Originator's performance of any of its respective
obligations under, or the validity or enforceability of, this
Agreement.
(ix) The Originator did not transfer the Mortgage Loans to the
Seller and the Seller did not transfer the Mortgage Loans to the
Depositor with any intent to hinder, delay or defraud any of its
creditors.
(x) Each of the Originator and the Seller acquired title to
the Mortgage Loans in good faith, without notice of any adverse claims.
(xi) The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Originator to the Seller and by the
Seller to the Depositor are not subject to the bulk transfer laws or
any similar statutory provisions in effect in any applicable
jurisdiction.
(xii) Neither this Agreement nor any information, certificate
of an officer, statement furnished in writing or report delivered to
the Trustee or the Guarantor by the Originator in connection with the
transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements contained therein, in light of the circumstances
under which they were made, not misleading (except to the extent that
any such information, statement or report has been corrected or
superseded in writing by the Originator as of the Closing Date, it
being understood (i) that the Originator has delivered no certificate
of an officer prior to the Closing Date and (ii) that any
representations, warranties and indemnifications as to the accuracy and
completeness of the Information Circular or the Prospectus Supplement
made by Option One Mortgage Corporation in agreements and Officers'
Certificates delivered by Option One Mortgage Corporation on the
Closing Date in connection with the transactions contemplated by this
Agreement shall be interpreted such that the information in the
Information Circular and the Prospectus Supplement is deemed to correct
and/or supersede as of the Closing Date, within the meaning of this
parenthetical, any information, statement or report delivered by the
Originator to the Trustee or the Guarantor prior to the Closing Date
that is inconsistent with the information in the Information Circular
or the Prospectus Supplement or that was omitted from such information,
statement or report delivered prior to the Closing Date).
SECTION 2.08. Covenants of the Originator.
The Originator hereby covenants that 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 Depositor, the Guarantor and the NIMS Insurer of the existence of any lien
on any Mortgage
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Loan immediately upon discovery thereof, and the Originator will defend the
right, title and interest of the Trust, as assignee of the Depositor, in, to and
under the Mortgage Loans, against all claims of third parties claiming through
or under the Originator or the Seller.
SECTION 2.09. Negative Covenants of the Trustee
and the Master Servicer.
Except as otherwise expressly permitted by this Agreement, the
Trustee and the Master Servicer shall not cause the Trust Fund to:
(i) sell, transfer, exchange or otherwise dispose of any of
the assets of the Trust Fund;
(ii) dissolve or liquidate the Trust Fund in whole or in part;
(iii) engage, directly or indirectly, in any business other
than that arising out of the issue of the Certificates, and the actions
contemplated or required to be performed under this Agreement;
(iv) incur, create or assume any indebtedness for borrowed
money;
(v) voluntarily file a petition for bankruptcy,
reorganization, assignment for the benefit of creditors or similar
proceeding; or
(vi) merge, convert or consolidate with any other Person.
SECTION 2.10. 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 Accounts, 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, the Guarantor 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
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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 Group I Pre- Funding Account or the Group II Pre-Funding Account, as
applicable, shall be one-hundred percent (100%) of the aggregate Stated
Principal Balance of the related 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 Group I Pre-Funding Account or the Group II
Pre-Funding Account, as applicable, 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
Guarantor, 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, the
Guarantor and the NIMS Insurer a duly executed Subsequent Transfer
Instrument, which shall include a Mortgage Loan Schedule listing the
Subsequent Mortgage Loans, and the 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 R, 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 an Adverse
REMIC Event, as evidenced by an Opinion of Counsel delivered at the
expense of the Depositor;
(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 or the Guarantor;
(vii) the Depositor shall have delivered to the Trustee, the
Guarantor and the NIMS Insurer a Subsequent Transfer Instrument
confirming the satisfaction of the conditions precedent specified in
this Section 2.10 and, pursuant to the Subsequent Transfer Instrument,
assigned to the Trustee without recourse for the benefit of the
Certificateholders and the
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Guarantor all the right, title and interest of the Depositor, in, to
and under the Subsequent Mortgage Loan Purchase Agreements, 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, the Guarantor 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
clauses (i) through (ix) of paragraph (c) below and to the
characteristics set forth in paragraph (d) below;
(ix) the Depositor shall have delivered to the Trustee, the
Guarantor and the NIMS Insurer an Opinion of Counsel addressed to the
Trustee and the Rating Agencies with respect to the true sale 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;
(x) the Depositor shall have furnished a preliminary
non-binding list of Subsequent Mortgage Loans to the Guarantor and the
NIMS Insurer ten Business Days prior to the Subsequent Transfer Date;
and
(xi) the Depositor shall have received the written consent of
the Guarantor and 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 (or 180 months, in the case
of any Balloon Mortgage Loan); (iii) such Subsequent Mortgage Loan will not have
a loan-to-value ratio greater than 100.00%; (iv) 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; (v) such Subsequent Mortgage Loan, if a
Fixed Rate Mortgage Loan, shall have a Mortgage Rate that is not less than 6.25%
per annum or greater than 14.14% per annum; (vi) such Subsequent Mortgage Loan
must have a first payment date occurring on or before October 1, 2002; (vii) if
the Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan, the Subsequent
Mortgage Loan will have a Gross Margin not less than 3.50% per annum; (viii) if
the Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan, the Subsequent
Mortgage Loan will have a Maximum Mortgage Rate not less than 12.10% per annum;
(ix) if the Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan, the
Subsequent Mortgage Loan will have a Minimum Mortgage Rate not less than 6.10%
per annum, (x) the Subsequent Mortgage Loan may not provide for negative
amortization; (xi) such Subsequent Mortgage Loan shall have been serviced by the
Master Servicer since origination or the date of purchase, (xii) if the
Subsequent Mortgage Loan is to be included in Loan Group I, such Subsequent
Mortgage Loan will have an original Principal Balance within the dollar amount
limits prescribed by ▇▇▇▇▇▇▇ Mac for conforming one- to four- family mortgage
loans and (xiii) such Subsequent Mortgage Loan shall have been underwritten in
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accordance with the criteria set forth under "Option One Mortgage
Corporation--Underwriting Standards" in the Information Circular and the
Prospectus Supplement.
(d) Following the purchase of any Subsequent Group I Mortgage
Loan by the Trust, the Group I Mortgage Loans (including such Subsequent Group I
Mortgage Loans): (i) will have a weighted average original term to stated
maturity of not more than 360 months, (ii) will have a weighted average term
since origination not in excess of 6 months; (iii) will have a weighted average
Mortgage Rate of not less than 8.803% per annum; (iv) will have a weighted
average Loan- to-Value Ratio of not more than 79.50%; (v) will have a weighted
average Gross Margin for the Adjustable-Rate Group I Mortgage Loans that is not
less than 5.998% per annum; (vi) will have a weighted average Maximum Mortgage
Rate for the Adjustable-Rate Group I Mortgage Loans of not less than 14.79% per
annum; (vii) will have a weighted average Minimum Mortgage Rate for the
Adjustable-Rate Group I Mortgage Loans of not less than 8.79% per annum; (viii)
will have no Group I Mortgage Loan with a Principal Balance that does not
conform to ▇▇▇▇▇▇▇ Mac loan limits; (ix) will be secured by Mortgaged Properties
in any one state representing no more than 14.17% of the aggregate Principal
Balance of the Group I Mortgage Loans; (x) will be secured by Mortgaged
Properties in any one zip code representing no more than 0.50% of the aggregate
Principal Balance of the Group I Mortgage Loans; (xi) will be secured by
non-owner occupied Mortgaged Properties representing no more than 5.26% of the
aggregate Principal Balance of the Group I Mortgage Loans; (xii) will be secured
by two- to four-family Mortgaged Properties representing no more than 11.67% of
the aggregate Principal Balance of the Group I Mortgage Loans; (xiii) will have
a weighted average FICO score of the related mortgagor of not less than 593;
(xiv) will have a cash-out refinance loan purpose representing no more than
61.22% of the aggregate Principal Balance of the Group I Mortgage Loans; (xv)
will have Prepayment Charge provisions with respect to no less than 82.54% of
the aggregate Principal Balance of the Group I Mortgage Loans; (xvi) will have
an Originator's risk grade of CC representing no more than 1.02% of the
aggregate Principal Balance of the Group I Mortgage Loans; (xvii) will have an
Originator's risk grade of C representing no more than 4.82% of the aggregate
Principal Balance of the Group I Mortgage Loans; (xviii) will have an
Originator's risk grade of B representing no more than 15.86% of the aggregate
Principal Balance of the Group I Mortgage Loans; (xix) will have Group I
Mortgage Loans with a Loan-to-Value Ratio at origination of 80.00% representing
no more than 29.94% of the aggregate Principal Balance of the Group I Mortgage
Loans; (xx) will have Group I Mortgage Loans with a Loan-to-Value Ratio at
origination in excess of 80.00% representing no more than 36.34% of the
aggregate Principal Balance of the Group I Mortgage Loans; (xxi) will have Group
I Mortgage Loans with a Loan-to- Value Ratio at origination in excess of 90.00%
representing no more than 10.87% of the aggregate Principal Balance of the Group
I Mortgage Loans; (xxii) will have Group I Mortgage Loans with a Loan-to-Value
Ratio at origination in excess of 95.00% representing no more than 0.30% of the
aggregate Principal Balance of the Group I Mortgage Loans; (xxiii) will have
been underwritten in accordance with the Originator's Full Documentation Program
representing not less than 63.59% of the aggregate Principal Balance of the
Group I Mortgage Loans; (xxiv) will have been underwritten in accordance with
the Originator's Stated Income Documentation Program representing not more than
35.95% of the aggregate Principal Balance of the Group I Mortgage Loans; (xxv)
will have been underwritten in accordance with the Originator's Mortgage Credit
Only Program representing not more than 5.52% of the aggregate Principal Balance
of the Group I Mortgage Loans; (xxvi) with respect to the Adjustable-Rate Group
I Mortgage Loans, approximately 94.67% of the aggregate Principal Balance
thereof will have their first adjustment 2 years following
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their date of origination and the remainder of the Adjustable-Rate Group I
Mortgage Loans will have their first adjustment either six months or 3 years
following their date of origination, (xxvii) will have an average prepayment
period of 24.98 months, (xxviii) will have Fixed-Rate Group I Mortgage Loans
representing no more than 12.76% of the aggregate Principal Balance of the Group
I Mortgage Loans, (xxix) will have Balloon Mortgage Loans representing no more
than 7.56% of the aggregate Principal Balance of the Fixed-Rate Group I Mortgage
Loans and (xxx) will have second lien Group I Mortgage Loans representing no
more than 5.78% of the aggregate Principal Balance of the Fixed-Rate Group I
Mortgage Loans.
Following the purchase of any Subsequent Group II Mortgage
Loan by the Trust, the Group II Mortgage Loans (including such Subsequent Group
II Mortgage Loans): (i) will have a weighted average original term to stated
maturity of not more than 360 months, (ii) will have a weighted average term
since origination not in excess of 6 months; (iii) will have a weighted average
Mortgage Rate of not less than 8.677% per annum; (iv) will have a weighted
average Loan-to-Value Ratio of not more than 79.69%; (v) will have a weighted
average Gross Margin for the Adjustable- Rate Group II Mortgage Loans that is
not less than 5.854% per annum; (vi) will have a weighted average Maximum
Mortgage Rate for the Adjustable-Rate Group II Mortgage Loans of not less than
14.649% per annum; (vii) will have a weighted average Minimum Mortgage Rate for
the Adjustable- Rate Group II Mortgage Loans of not less than 8.639% per annum;
(viii) [reserved]; (ix) will be secured by Mortgaged Properties in any one state
representing no more than 20.16% of the aggregate Principal Balance of the Group
II Mortgage Loans; (x) will be secured by Mortgaged Properties in any one zip
code representing no more than 0.53% of the aggregate Principal Balance of the
Group II Mortgage Loans; (xi) will be secured by non-owner occupied Mortgaged
Properties representing no more than 3.99% of the aggregate Principal Balance of
the Group II Mortgage Loans; (xii) will be secured by two- to four-family
Mortgaged Properties representing no more than 8.15% of the aggregate Principal
Balance of the Group II Mortgage Loans; (xiii) will have a weighted average FICO
score of the related mortgagor of not less than 597; (xiv) will have a cash-out
refinance loan purpose representing no more than 61.07% of the aggregate
Principal Balance of the Group II Mortgage Loans; (xv) will have Prepayment
Charge provisions with respect to no less than 79.73% of the aggregate Principal
Balance of the Group II Mortgage Loans; (xvi) will have an Originator's risk
grade of CC representing no more than 1.47% of the aggregate Principal Balance
of the Group II Mortgage Loans; (xvii) will have an Originator's risk grade of C
representing no more than 3.62% of the aggregate Principal Balance of the Group
II Mortgage Loans; (xviii) will have an Originator's risk grade of B
representing no more than 10.02% of the aggregate Principal Balance of the Group
II Mortgage Loans; (xix) will have Group II Mortgage Loans with a Loan-to-Value
Ratio at origination of 80.00% representing no more than 28.30% of the aggregate
Principal Balance of the Group II Mortgage Loans; (xx) will have Group II
Mortgage Loans with a Loan-to-Value Ratio at origination in excess of 80.00%
representing no more than 35.29% of the aggregate Principal Balance of the Group
II Mortgage Loans; (xxi) will have Group II Mortgage Loans with a Loan-to- Value
Ratio at origination in excess of 90.00% representing no more than 11.10% of the
aggregate Principal Balance of the Group II Mortgage Loans; (xxii) will have
Group II Mortgage Loans with a Loan-to-Value Ratio at origination in excess of
95.00% representing no more than 0.06% of the aggregate Principal Balance of the
Group II Mortgage Loans; (xxiii) will have been underwritten in accordance with
the Originator's Full Documentation Program representing not less than 51.01% of
the aggregate Principal Balance of the Group II Mortgage Loans; (xxiv) will have
been underwritten in accordance with the Originator's Stated Income
Documentation Program
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representing not more than 40.99% of the aggregate Principal Balance of the
Group II Mortgage Loans; (xxv) will have been underwritten in accordance with
the Originator's Mortgage Credit Only Program representing not more than 5.98%
of the aggregate Principal Balance of the Group II Mortgage Loans; (xxvi) with
respect to the Adjustable-Rate Group II Mortgage Loans, approximately 83.00% of
the aggregate Principal Balance thereof will have their first adjustment 2 years
following their date of origination and the remainder of the Adjustable-Rate
Group II Mortgage Loans will have their first adjustment either six months or 3
years following their date of origination, (xxvii) will have an average
prepayment period of 25.05 months, (xxviii) will have Fixed-Rate Group II
Mortgage Loans representing no more than 20.20% of the aggregate Principal
Balance of the Group II Mortgage Loans, (xxix) will have Balloon Mortgage Loans
representing no more than 1.32% of the aggregate Principal Balance of the
Fixed-Rate Group II Mortgage Loans and (xxx) will have second lien Group II
Mortgage Loans representing no more than 12.29% of the aggregate Principal
Balance of the Fixed-Rate Group II Mortgage Loans.
(e) Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by (i) the Guarantor, (ii) 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
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.
(f) With the consent of the Guarantor, the NIMS Insurer and
the Rating Agencies, Subsequent Mortgage Loans with characteristics varying from
those set forth above, other than with respect to the characteristics described
in clauses (xvi) and (xvii) of (d) above, may be purchased by the Trust;
provided, however that the addition of such Mortgage Loans will not materially
affect the aggregate characteristics of the Mortgage Pool.
SECTION 2.11. 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 1 for the
benefit of the holders of the REMIC 1 Regular Interests (which are
uncertificated) and the Class R Certificates (in respect of the Class R-1
Interest). The Trustee acknowledges receipt of the assets described in the
definition of REMIC 1 and declares that it holds and will hold the same in trust
for the exclusive use and benefit of the holders of the REMIC 1 Regular
Interests and the Class R Certificates (in respect of the Class R-1 Interest).
The interests evidenced by the Class R-1 Interest, together with the REMIC 1
Regular Interests, constitute the entire beneficial ownership interest in REMIC
1.
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(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 (other than the Class C Certificates and the Class P
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, the Class C Interest and the Class P Interest, constitute
the entire beneficial ownership interest in REMIC 3.
(d) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class C Interest (which is uncertificated) for the
benefit of the Holders of the Class C Certificates and the Class R-X
Certificates (in respect of the Class R-4 Interest). The Trustee acknowledges
receipt of the Class C Interest and declares that it holds and will hold the
same in trust for the exclusive use and benefit of the Holders of the Class C
Certificates and the Class R-X Certificates (in respect of the Class R-4
Interest). The interests evidenced by the Class R-4 Interest, together with the
Class C Certificates, constitute the entire beneficial ownership interest in
REMIC 4.
(e) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class P Interest (which is uncertificated) for the
benefit of the Holders of the Class P Certificates and the Class R-X
Certificates (in respect of the Class R-5 Interest). The Trustee acknowledges
receipt of the Class P Interest and declares that it holds and will hold the
same in trust for the exclusive use and benefit of the Holders of the Class P
Certificates and the Class R-X Certificates (in respect of the Class R-5
Interest). The interests evidenced by the Class R-5 Interest, together with the
Class P Certificates, constitute the entire beneficial ownership interest in
REMIC 5.
(f) 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, Section 2.02 and subsection (a), (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 subsection (b), (iii) the assignment and delivery to the Trustee of REMIC 3
(including the
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Residual Interest therein represented by the Class R-3 Interest) and the
acceptance by the Trustee thereof, pursuant to subsection (c), (iv) the
assignment and delivery to the Trustee of REMIC 4 (including the Residual
Interest therein represented by the Class R-4 Interest) and the acceptance by
the Trustee thereof, pursuant to subsection (d) and (v) the assignment and
delivery to the Trustee of REMIC 5 (including the Residual Interest therein
represented by the Class R-5 Interest) and the acceptance by the Trustee
thereof, pursuant to subsection (e), the Trustee, pursuant to the written
request of the Depositor executed by an officer of the Depositor, has executed,
authenticated and delivered to or upon the order of the Depositor, (A) the Class
R Certificates in authorized denominations evidencing the Class R-1 Interest,
the Class R-2 Interest and the Class R-3 Interest and (B) the Class R-X
Certificates in authorized denominations evidencing the Class R-4 Interest and
the Class R-5 Interest.
SECTION 2.12. 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.
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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 and the Guarantor (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 and for others and in accordance with the practices of prudent
mortgage servicers, 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 Sub-Servicer or any Affiliate of the Master
Servicer or any Sub-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 terms of this Agreement, 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
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related Mortgage Loan is required to be deposited into the Collection Account.
Notwithstanding any other provisions of this Agreement, any payments made by the
Master Servicer in respect of any waived Prepayment Charges pursuant to clauses
(i) and (ii)(B) above shall be deemed to be paid outside of the Trust Fund.
Subject only to the above-described servicing standards and the terms of this
Agreement and of the Mortgage Loans, the Master Servicer shall have full power
and authority, acting alone or through Sub-Servicers as provided in Section
3.02, to do or cause to be done any and all things in connection with such
servicing and administration which it may deem necessary or desirable. Without
limiting the generality of the foregoing, the Master Servicer in its own name or
in the name of a Sub-Servicer is hereby authorized and empowered by the Trustee
when the Master Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute and deliver,
on behalf of the Certificateholders and the Trustee, and upon notice to the
Trustee, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee and Certificateholders. The Master Servicer
shall service and administer the Mortgage Loans in accordance with applicable
state and federal law and shall provide to the Mortgagors any reports required
to be provided to them thereby. The Master Servicer shall also comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any standard hazard insurance policy. Subject to Section 3.17,
within 15 days of the Closing Date, the Trustee shall execute, at the written
request of the Master Servicer, and furnish to the Master Servicer and any
Sub-Servicer any special or limited powers of attorney for each county in which
a Mortgaged Property is located and other documents necessary or appropriate to
enable the Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder; PROVIDED, such limited powers of attorney or
other documents shall be prepared by the Master Servicer and submitted to the
Trustee for execution. The Trustee shall not be liable for the actions of the
Master Servicer or any Sub-Servicers under such powers of attorney.
Subject to Section 3.09 hereof, in accordance with the
standards of the preceding paragraph, the Master Servicer shall advance or cause
to be advanced funds as necessary for the purpose of effecting the 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, and the Master Servicer has
obtained the prior written consent of the Guarantor) or (ii) permit any
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modification, waiver or amendment of any term of any Mortgage Loan that would
both (A) effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or Treasury regulations promulgated thereunder) and (B) cause
any Trust REMIC to fail to qualify as a REMIC under the Code or the imposition
of any tax on "prohibited transactions" or "contributions after the startup
date" under the REMIC Provisions.
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 (without regard to the Guarantee of the Guarantor) and (ii) the
NIMS Insurer or the Guarantor, as provided in Section 1.04 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 ▇▇▇▇▇▇▇ Mac 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 or the
Guarantor without the consent of the Guarantor or 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 Guarantor, 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.
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(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee, the Guarantor 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 Agreements, 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 Agreements 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.
(c) The parties hereto acknowledge that the Special
Sub-Servicer has been retained by the Master Servicer to service the Specially
Serviced Mortgage Loans pursuant to the Special Sub-Servicing Agreement, which
shall constitute a Sub-Servicing Agreement hereunder. As compensation for its
services, the Special Sub-Servicer will be paid a portion of the Servicing Fee
by the Master Servicer and such payment shall not be an expense of the Trust
Fund. Notwithstanding anything in this Section 3.02 or Section 3.03 to the
contrary, the conditions governing the termination of the Special Sub-Servicer
shall be set forth in the Special Sub-Servicing Agreement.
SECTION 3.03. Successor Sub-Servicers.
The Master Servicer, with the consent of the NIMS Insurer or
the Guarantor as provided in Section 1.04, 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. The Guarantor or the NIMS Insurer,
as provided in Section 1.04, subject, in the case of the Special Sub-Servicing
Agreement, to the specific events of default set forth therein, shall have the
right to direct the Master Servicer (at the Master Servicer's expense) to
terminate any Sub-Servicer that (i) having previously been an approved ▇▇▇▇▇▇▇
Mac Seller/Servicer, no longer has such approval or (ii) at the Guarantor's
reasonable request. 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
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Servicer) without payment of any fee, in accordance with the terms of this
Agreement, and the Trustee shall so terminate such Sub-Servicing Agreement at
the direction of the NIMS Insurer or the Guarantor, as provided in Section 1.04,
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, the Guarantor and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with a
Sub- Servicer for indemnification of the Master Servicer by such Sub-Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
SECTION 3.05. No Contractual Relationship Between
Sub-Servicers and the Guarantor, the
NIMS Insurer, the Trustee or
Certificateholders.
Except with respect to the Special Sub-Servicing Agreement,
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 Guarantor, 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) and if the Trustee has been appointed as the
successor Master Servicer, 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
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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 the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party. 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 diligently collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any applicable insurance policies, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Consistent with the foregoing and
consistent with the Loss Mitigation Procedures, 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 Guarantor's and the NIMS Insurer's
prior written consent shall be required for any modification, waiver or
amendment if the aggregate number of outstanding Mortgage Loans which have been
modified, waived or amended exceeds 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 and consistent
with the Loss Mitigation Procedures, 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
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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 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 segregate and hold all funds
collected and received pursuant to each Mortgage Loan which constitute Escrow
Payments separate and apart from any of its own funds and general assets and
shall establish and maintain one or more Servicing Accounts (each, a "Servicing
Account"), in the form of time deposit or demand accounts. Each Servicing
Account shall be an Eligible Account.
The Master Servicer shall deposit in the Servicing Account on
a daily basis within one Business Day of receipt, 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, but
in no case in excess of amounts provided for in this 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;
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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.
SECTION 3.10. Collection Account, Initial Deposit
Accounts and Distribution Account.
(a) The Master Servicer shall segregate and hold all funds
collected and received pursuant to each Mortgage Loan separate and apart from
any of its own funds and general assets. 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, the Guarantor and the
Certificateholders. Each Collection Account shall be an Eligible Account.
On behalf of the Trust Fund, the Master Servicer shall deposit
or cause to be deposited in the Collection Account within one Business Day after
the Master Servicer's receipt thereof, 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;
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(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
(ix) any amounts required to be deposited in the Collection
Account pursuant to Sections 3.16(c)(i), 3.24, 3.26, 3.31 or 4.04.
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, the Guarantor 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
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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 Accounts, held in trust for the benefit of the
Guarantor and the Certificateholders. On the Closing Date, the Depositor shall
remit or cause to be remitted to the Trustee, for deposit in the Initial Deposit
Accounts, and the Trustee shall deposit the Initial Deposit, to the extent
received by it, into the Initial Deposit Accounts. The Initial Deposit Accounts
shall be treated as "outside reserve funds" under applicable Treasury
regulations and shall not be part of any Trust REMIC. Any investment earnings on
funds in the Initial Deposit Accounts 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 Accounts 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.
(c) Funds in the Collection Account, the Initial Deposit
Accounts 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 Guarantor, 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 Guarantor, the NIMS
Insurer, the Master Servicer and the Depositor of the location of the
Distribution Account and the Initial Deposit Accounts 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;
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(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 from the
assets of the Trust Fund pursuant to this Agreement (other
than investment income on the funds on deposit in the
Distribution Account), including but not limited to amounts
required to be paid to the Trustee pursuant to Section 3.06,
Section 7.02 and Section 8.05.
(e) [reserved].
(f) The Master Servicer shall deposit in the Collection
Account any amounts required to be deposited pursuant to Section 3.12(b) in
connection with losses realized on Permitted Investments with respect to funds
held in the Collection Account.
SECTION 3.11. Withdrawals from the Collection
Account and Distribution Account.
(a) The Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.04:
(i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to Section
3.10(b) or permitted to be so remitted pursuant to the first sentence
of Section 3.10(d);
(ii) 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) to pay the Master 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
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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 up
to an amount equal to $500,000 in any calendar year (any amounts in
excess thereof being reimbursable in accordance with Section 4.01(d));
(ix) to reimburse the Guarantor, 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; provided, however,
that the reimbursement to the NIMS Insurer pursuant to this clause
shall be limited to an annual amount of $25,000;
(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
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(vii) above. The Master Servicer shall provide written notification to the
Guarantor, 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) [reserved];
(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, Section 7.02 and Section 8.05 up
to an amount equal to $500,000 in any calendar year (any amounts in
excess thereof being reimbursable in accordance with Section 4.01(d));
(vi) to pay to the Trustee, any interest or investment income
earned on funds deposited in the Distribution Account; and
(vii) to pay to an Advancing Person reimbursements for
Advances and/or Servicing Advances pursuant to Section 3.29.
SECTION 3.12. Investment of Funds in the Interest
Coverage Accounts, Collection
Account, Initial Deposit Accounts
and the Distribution Account.
(a) The Master Servicer may direct any depository institution
maintaining the Interest Coverage Accounts, the Collection Account, any REO
Account or the Initial Deposit Accounts 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
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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 Accounts, the Initial Deposit Accounts, any REO 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 Accounts, the Collection Account, the Initial
Deposit Accounts 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 Accounts, the Collection
Account, the Initial Deposit Accounts and any REO Account, as applicable, the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such account immediately upon realization of such
loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account shall be for the benefit of the Trustee as
additional compensation for its services as Trustee. The Trustee shall deposit
in the Distribution Account the amount of any loss of principal incurred in
respect of any such Permitted Investment made with funds in such accounts
immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Guarantor, 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].
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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 fire and 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) 100% of the maximum insurable
value of the improvements securing the Mortgage Loan, 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 (x) fire and hazard insurance with
extended coverage on each REO Property in an amount which is at least equal to
the lesser of (i) 100% of the maximum insurable value of the improvements
securing the Mortgage Loan and (ii) the outstanding Principal Balance of the
related Mortgage Loan at the time it became an REO Property, (y) public
liability insurance and (z) to the extent required and available under the
National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of
1973, each as amended, flood insurance in an amount as provided below. The
Master Servicer will comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any such hazard
policies. Any amounts to be collected by the Master Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.11, if received
in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, if received in respect of an REO Property. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating distributions to Certificateholders, be added to the
unpaid Principal Balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and flood insurance has been made available, the Master Servicer will
cause to be maintained a flood insurance policy in respect thereof meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier. 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 Act of 1968 and
the Flood Disaster Protection Act of 1973, each as amended. All such policies
shall be endorsed with standard mortgagee clauses with loss payable to the
Master Servicer and shall provide for at least thirty days prior written notice
to the Master Servicer of any cancellation, reduction in the amount of or
material change in coverage to the Master Servicer. The Master Servicer shall
not interfere with the Mortgagor's freedom of choice in selecting either his
insurance carrier or agent; provided, however, that the Master Servicer shall
not accept any such insurance policies from insurance companies unless such
companies currently reflect a general policy rating of B:III or better in Best's
Key Rating Guide and are licensed to do business in the state wherein the
property subject to the policy is located.
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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 insuring against hazard losses on all
of the Mortgage Loans, then, to the extent such policy provides coverage in an
amount equal to the amount required pursuant to this Section 3.14(a) and
otherwise complies with all other requirements of this Section 3.14, 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 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. Upon request of the
Trustee or the Guarantor, the Master Servicer shall cause to be delivered to the
Trustee and the Guarantor a certified true copy of such policy and a statement
from the insurer thereunder that such policy shall in no event be terminated or
materially modified without thirty days prior written notice to the Trustee, the
Guarantor and the NIMS Insurer.
(b) The Master Servicer shall maintain, at its own expense, a
blanket fidelity bond (the "Fidelity Bond") and an errors and omissions
insurance policy, with broad coverage with financially responsible companies on
all officers, employees or other persons acting in any capacity with regard to
the Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall be in
the form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Master Servicer against losses, including forgery, theft, embezzlement, fraud,
errors and omissions and negligent acts of such persons. Such Fidelity Bond
shall also protect and insure the Master Servicer against losses in connection
with the failure to maintain any insurance policies required pursuant to this
Agreement and the release or satisfaction of a Mortgage Loan without having
obtained payment in full of the indebtedness secured thereby. No provision of
this Section 3.14(b) requiring the Fidelity Bond and errors and omissions
insurance shall diminish or relieve the Master Servicer from its duties and
obligations as set forth in this Agreement. The minimum coverage under any such
bond and insurance policy shall be at least equal to the corresponding amounts
required by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac Seller/Servicer Guide. Upon request
of the Trustee, the Guarantor or the NIMS Insurer, the Master Servicer shall
cause to be delivered to the Trustee, the Guarantor or the NIMS Insurer, as
applicable, a certified true copy of the Fidelity Bond and errors and omissions
insurance policy and a statement from the surety and the insurer that such
Fidelity Bond and errors and omissions insurance policy shall by its terms not
be cancelable or materially modifiable without thirty days' prior written notice
to the Trustee, the Guarantor and the NIMS Insurer.
SECTION 3.15. Enforcement of Due-On-Sale Clauses;
Assumption Agreements.
When a Mortgaged Property has been or is about to be conveyed
by the Mortgagor, the Master Servicer shall, to the extent it has knowledge of
such conveyance or prospective conveyance, exercise its rights to accelerate the
maturity of the related Mortgage Loan under any
104
"due-on-sale" clause contained in the related Mortgage or Mortgage Note;
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. In such event, the Master Servicer shall
make reasonable efforts to enter into an assumption and modification agreement
with the Person to whom such property has been or is about to be conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and, unless
prohibited by applicable law or the Mortgage, the Mortgagor remains liable
thereon. If the foregoing is not permitted under applicable law, the Master
Servicer is 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 Mortgagor and becomes liable under the Note
provided that no such substitution should be permitted 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. The Mortgage Loan, as
assumed, shall conform in all respects to the requirements, representations and
warranties of this Agreement. 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
assumption or substitution agreement has been completed by forwarding to the
Trustee the original copy of such assumption or substitution agreement
(indicating the Mortgage File to which it relates) which copy shall be added by
the Trustee to the related Mortgage File and which 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 responsible for recording any such assumption or substitution agreements. In
connection with any such assumption or substitution agreement, the Monthly
Payment and the Mortgage Rate on the related Mortgage Loan shall not be changed
but shall remain as in effect immediately prior to the assumption or
substitution, the stated maturity or outstanding principal amount of such
Mortgage Loan shall not be changed nor shall any required monthly payments of
principal or interest be deferred or forgiven. Any fee collected by the Master
Servicer for consenting to any such conveyance or entering into an assumption or
substitution agreement shall be retained by or paid to the Master Servicer as
additional servicing compensation.
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.
SECTION 3.16. Realization Upon Defaulted Mortgage
Loans.
105
(a) The Master Servicer shall use its best efforts, in as
practical a time frame as possible and consistent with Servicing Standard, to
foreclose upon or otherwise comparably convert the ownership of properties
securing such of the Mortgage Loans (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 or fails to perform any other covenant or obligation under the Mortgage
Loan 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.
In connection with a foreclosure or other conversion, the
Master Servicer shall exercise such rights and powers vested in it hereunder and
use the same degree of care and skill in its exercise as prudent mortgage
servicers would exercise or use under the circumstances in the conduct of their
own affairs, including, without limitation, advancing funds for the payment of
taxes and insurance premiums.
(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, the Certificateholders or the
Guarantor 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,
agreed upon by the Guarantor; provided, however, that the Guarantor shall
consult with the NIMS Insurer, but the decision to approve such person shall be
in the Guarantor's sole discretion, 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 Certificateholders and the Guarantor 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
106
materials are present for which such action could be required, that it would be
in the best economic interest of the Certificateholders and the Guarantor 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 Guarantor and the NIMS Insurer.
The cost of the environmental audit report contemplated by
this Section 3.16 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(vii), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, with the Guarantor's
consent, as described above, that it is in the best economic interest of the
Trust Fund and the Guarantor 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
Certificateholders and the Guarantor; 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 or the Guarantor.
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
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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 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 the Guarantor, 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.
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 direct result of
the negligence or willful misconduct by the Trustee in releasing the Mortgage
File as provided above. Upon any such payment in full, or the receipt of such
certification, the Originator, the Guarantor and the Trustee hereby authorize
and empower the Master Servicer to execute an instrument of satisfaction
regarding the Mortgaged Property relating to such Mortgage, which instrument of
satisfaction shall be delivered to the Person or Persons entitled thereto
against receipt therefor of payment in full. 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.
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(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon any
request made by or on behalf of the Master Servicer and delivery to the Trustee,
in written (with two executed copies) or electronic format, of a Request for
Release in the form of Exhibit E signed by a Servicing Officer (or in a mutually
agreeable electronic format that will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File to the
Master Servicer within three Business Days, and the Trustee shall, at the
direction of the Master Servicer, execute such documents as shall be necessary
to the prosecution of any such proceedings. Such Request for Release shall
obligate the Master Servicer to return each and every document previously
requested from the Mortgage File to the Trustee when the need therefor by the
Master Servicer no longer exists, unless the Mortgage Loan has been liquidated
and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Collection Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non- judicially, and the Master Servicer has delivered, or caused to be
delivered, to the Trustee an additional Request for Release certifying as to
such liquidation or action or proceedings. Upon the request of the Trustee, the
Master Servicer shall provide notice to the Trustee of the name and address of
the Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a Request for Release, in
written (with two executed copies) or electronic format, from a Servicing
Officer stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation that are required
to be deposited into the Collection Account have been so deposited, or that such
Mortgage Loan has become an REO Property, such Mortgage Loan shall be released
by the Trustee to the Master Servicer or its designee.
(c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer or the Sub-Servicer, as
the case may be, copies of, any court pleadings, requests for trustee's sale or
other documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
(d) The Master Servicer shall have the right to accept
applications of Mortgagors for consent to (i) partial releases of Mortgages,
(ii) alterations, (iii) removal, demolition or division of properties subject to
Mortgages, (iv) modification and (v) second mortgage subordination agreements.
No application for approval shall be considered by the Master Servicer unless:
(w) it has received an Opinion of Counsel, addressed to the Trustee and the
Guarantor (which opinion shall not be an expense of the Trust Fund or the
Trustee) that such action sought by the Mortgagor will not affect adversely the
status of any Trust REMIC as a REMIC or cause any Trust REMIC to be subject to a
tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions;
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(x) the provisions of the related Mortgage Note and Mortgage have been complied
with; (y) the Loan-to-Value Ratio and debt-to-income ratio after the
implementation of such proposed action does not exceed the maximum Loan-to-Value
Ratio and debt-to-income ratio established in accordance with the underwriting
standards of the Mortgage Loans; and (z) the lien priority of the related
Mortgage is not affected. Upon receipt by the Trustee of a Servicing Officer's
certificate setting forth the action proposed to be taken in respect of a
particular Mortgage Loan and certifying that the criteria set forth in the
immediately preceding sentence have been satisfied, the Trustee shall execute
and deliver to the Master Servicer the consent or partial release so requested
by the Master Servicer. A proposed form of consent or partial release, as the
case may be, shall accompany any Servicing Officer's certificate delivered by
the Master Servicer pursuant to this paragraph.
SECTION 3.18. Servicing Compensation.
As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds, Liquidation Proceeds or condemnation proceeds to the extent permitted
by Section 3.11(a)(iii) and out of amounts derived from the operation and sale
of an REO Property to the extent permitted by Section 3.23. Except as provided
in Section 3.29, the right to receive the Servicing Fee may not be transferred
in whole or in part except in connection with the transfer of all of the Master
Servicer's responsibilities and obligations under this Agreement; PROVIDED,
HOWEVER, that the Master Servicer may pay from the Servicing Fee any amounts due
to a Sub-Servicer pursuant to a Sub-Servicing Agreement entered into under
Section 3.02.
Additional servicing compensation in the form of assumption
fees, late payment charges, insufficient funds charges, ancillary income or
otherwise (other than Prepayment Charges) shall be retained by the Master
Servicer only to the extent such fees or charges are received by the Master
Servicer. The Master Servicer shall also be entitled pursuant to Section
3.11(a)(iv) to withdraw from the Collection Account and pursuant to Section
3.23(b) to withdraw from any REO Account, as additional servicing compensation,
interest or other income earned on deposits therein, subject to Section 3.12 and
Section 3.24. The Master Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including premiums
for the insurance required by Section 3.14, to the extent such premiums are not
paid by the related Mortgagors or by a Sub-Servicer and servicing compensation
of each Sub-Servicer) and shall not be entitled to reimbursement therefor except
as specifically provided herein.
The Master Servicer shall be entitled to any Prepayment
Interest Excess, which it may withdraw from the Collection Account pursuant to
Section 3.11(a)(ix).
SECTION 3.19. Reports to the Trustee; Collection
Account Statements.
Not later than twenty days after each Distribution Date, the
Master Servicer shall forward to the Guarantor, 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
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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
Guarantor, 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 in the case of
the certificate for the fiscal year ending in April 2003, such certificate shall
refer to the period from the Cut-off Date to the last day of April 2003) 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 officers and the
nature and status thereof including the steps being taken by the Master Servicer
to remedy such default. 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 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 Guarantor, 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. In the case of the certificate for the fiscal year ending in April
2003, such certificate shall refer to the period from the Cut-off Date to the
last day of April 2003.
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SECTION 3.22. Access to Certain Documentation;
Filing of Reports by Trustee.
(a) The Master Servicer shall provide to the Guarantor, the
Office of Thrift Supervision, the FDIC, and any other federal or state banking
or insurance regulatory authority, supervising agents or examiners 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 Guarantor, 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) If any Mortgage Loan (i) is in foreclosure, (ii) defaults
on its first Monthly Payment and remains delinquent for 60 days or more or (iii)
becomes delinquent during the first six months of the term thereof and remains
delinquent for 60 days or more or with respect to any Qualified Substitute
Mortgage Loan, the Master Servicer will forward to the Guarantor, upon
reasonable request, copies of the contents of the related Mortgage File and all
underwriting documentation with respect to such Mortgage Loan that is required
to be delivered pursuant to this Agreement.
If the Guarantor determines, after consultation with the
Originator, that such Mortgage Loan was not originated generally in accordance
with the Originator's underwriting guidelines in any material respect, then the
Master Servicer (on behalf of the Originator) shall follow the procedures for
repurchase or substitution of Deleted Mortgage Loans set forth in Section 2.03.
Such action on the part of the Master Servicer in accordance with Section 2.03
shall take place within 90 days of the Master Servicer having been notified by
the Guarantor of the need to act pursuant to Section 2.03.
In addition, the Master Servicer shall provide a copy of this
Agreement, promptly following receipt of a written request therefor, to any
investor in the certificates issued by the Guarantor, which have been offered
pursuant to the Offering Circular and which are backed by the Guaranteed
Certificates.
(c) Within 90 days after the last Subsequent Transfer Date, or
such later time as the Master Servicer and the Guarantor may agree, the
Guarantor will be permitted, upon reasonable notice and during normal business
hours, at the office of the Master Servicer, to review copies of the contents of
the Mortgage Files and the underwriting documentation that is required to be
delivered to the Trustee pursuant hereto with respect to up to the greater of
(i) 2,000 of the Mortgage Files and (ii) 10% (by number) of the Mortgage Loans
(a "Mortgage Loan Sample"), in order to ascertain whether each such Mortgage
Loan was originated generally in accordance with the Originator's underwriting
guidelines in any material respect. In addition, the Guarantor will be
permitted, upon reasonable notice and during normal business hours, at the
office of the Master Servicer, to review copies of the contents of the Mortgage
Files and the underwriting documentation that is required to be delivered to the
Trustee pursuant hereto with respect to an additional 75 of the Mortgage Files
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which are not part of the foregoing Mortgage Loan Sample. If, as a result of
such investigation, the Guarantor determines (after the appeals process set
forth in the ▇▇▇▇▇▇▇ Mac Single Family Seller/Servicer Guide) that more than 20%
(by number) of the Mortgage Loans in such Mortgage Loan Sample were not so
underwritten, the Master Servicer will permit the Guarantor to review an
additional Mortgage Loan Sample in accordance with the same procedures until the
Guarantor has reviewed a Mortgage Loan Sample that contains fewer than 20% (by
number) of Mortgage Loans that were not originated generally in accordance with
the Originator's underwriting guidelines in any material respect. Any
out-of-pocket expenses incurred by the Master Servicer related to such review
shall be reimbursed by the Originator.
Notwithstanding the foregoing, the Guarantor shall have the
right to collect data on an additional 1,200 Mortgage Loans over and above the
Mortgage Loans reviewed in the procedures described in the immediately preceding
paragraph.
The procedures to be followed in connection with any Mortgage
Loan which was not underwritten in accordance with the underwriting guidelines
set forth above are set forth in the Option One Guidelines (as defined in the
Offering Circular), the relevant portions of which are attached hereto as
Exhibit O; provided, however, that no such procedure shall be followed if such
action may (A) result in the imposition of taxes on "prohibited transactions" of
the Trust, as defined in Section 860F of the Code, or (B) contributions to any
Trust REMIC after the "startup day," as defined in Section 860G(d) of the Code,
or (C) cause the portion of the Trust Fund assets with respect to which a REMIC
election was made to fail to qualify as a REMIC at any time any Certificate is
outstanding.
(d) For a period of two years from the Closing Date, the
Guarantor may contact the Originator to confirm that the Originator continues to
actively engage in a program to originate mortgage loans to low-income families
and to obtain other non-proprietary information about the Originator's
activities that may assist the Guarantor in completing its own regulatory
requirements. The Originator shall use its best efforts to provide such
information to the Guarantor.
(e) 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 (▇▇▇▇▇), 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) In the event that title to a Mortgaged Property is
acquired in foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be taken (pursuant to a limited power of attorney (a
form of which shall be provided by the Trustee to the Master Servicer) to be
provided by the Trustee to the Master Servicer after receipt of an Officers'
Certificate from the Master Servicer) in the name of the Trustee, on behalf of
the Certificateholders and the Guarantor, or in the event the Trustee is not
authorized or permitted to hold title to real property in the state where the
REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Master Servicer from an
attorney duly licensed to practice law in the state where the REO Property is
located. Any Person or Persons holding such title other than the Trustee shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Trustee.
(b) In the event that the Trust Fund acquires any REO Property
as aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such REO Property as soon as
practical and in any event not later than the end of the third taxable year
after the year of its acquisition by the Trust Fund unless the Master Servicer
has received a grant of extension from the Internal Revenue Service to the
effect that, under the REMIC Provisions and any relevant proposed legislation
and under applicable state law, the applicable Trust REMIC may hold REO Property
for a longer period without adversely affecting the REMIC status of such REMIC
or causing the imposition of a federal or state tax upon such REMIC. If the
Master Servicer has received such an extension, then the Master Servicer shall
continue to attempt to sell the REO Property for its fair market value for such
period longer than three years as such extension permits (the "Extended
Period"). If the Master Servicer has not received such an extension and the
Master Servicer is unable to sell the REO Property within the period ending 3
months before the end of such third taxable year after its acquisition by the
Trust Fund or if the Master Servicer has received such an extension, and the
Master Servicer is unable to sell the REO Property within the period ending
three months before the close of the Extended Period, the Master Servicer shall,
before the end of the three year period or the Extended Period, as applicable,
(i) purchase such REO Property at a price equal to the REO Property's fair
market value or (ii) auction the REO Property to the highest bidder (which may
be the Master Servicer) in an auction reasonably designed to produce a fair
price prior to the expiration of the three-year period or the Extended Period,
as the case may be. The Trustee shall sign any document or take any other action
reasonably requested by the Master Servicer which would enable the Master
Servicer, on behalf of the Trust Fund, to request such grant of extension.
Notwithstanding any other provisions of this Agreement, no REO
Property acquired by the Trust Fund shall be rented (or allowed to continue to
be rented) or otherwise used by or on behalf of the Trust Fund in such a manner
or pursuant to any terms that would: (i) cause such REO Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code; or (ii) subject any Trust REMIC to the imposition of any federal
income taxes on the income earned from such REO Property, including any taxes
imposed by reason of Sections 860F or 860G(c) of the Code, unless the Master
Servicer has agreed to indemnify and hold harmless the Trust Fund with respect
to the imposition of any such taxes.
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The Master Servicer shall manage, conserve, protect and
operate each REO Property for the Certificateholders, the Guarantor and the
Trust Fund 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 the related REMIC 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.
The Master Servicer shall cause each REO Property to be inspected promptly upon
the acquisition of title thereto and shall cause each REO Property to be
inspected at least annually thereafter. The Master Servicer shall make or cause
to be made an electronic report of each such inspection. Such reports shall be
retained by the Master Servicer and versions thereof shall be forwarded by the
Master Servicer to the Trustee, the Guarantor and the NIMS Insurer upon request.
The Master Servicer shall attempt to sell the same (and may temporarily rent the
same) on such terms and conditions as shall be in conformity with the Loss
Mitigation Procedures.
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 as additional
servicing compensation.
The Master Servicer shall deposit or cause to be deposited, no
later than one Business Day after the receipt thereof, in each REO Account, all
revenues received with respect to the related REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of the REO Property, including the cost of maintaining any hazard insurance
pursuant to Section 3.10 hereof and the fees of any managing agent acting on
behalf of the Master Servicer. The Master Servicer shall have the right to earn
interest, if any, on funds deposited in such REO Account. On or before each
Determination Date, the Master Servicer shall withdraw from each REO Account and
deposit into the Collection Account the net receipts from the REO Property on
deposit in the REO Account and retain any interest.
The Master Servicer shall furnish to the Trustee and the
Guarantor, upon reasonable request, on each Master Servicer Remittance Date, an
operating statement for each REO Property covering the operation of each REO
Property for the previous month. Such operation statement shall be accompanied
by such other information as the Trustee shall reasonably request.
The Master Servicer shall use its best efforts to dispose of
the REO Property as promptly as is practically consistent with the Loss
Mitigation Procedures.
Each REO Disposition shall be carried out by the Master
Servicer at such price and upon such terms and conditions as the Master Servicer
deems to be in the best interest of the Certificateholders and the Guarantor. If
as of the date title to any REO Property was acquired by the Master Servicer
there were outstanding unreimbursed Servicing Advances or Advances with respect
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to the REO Property, the Master Servicer, upon an REO Disposition of such REO
Property, shall be entitled to reimbursement for any related (a) unpaid
Servicing Fees, (b) unreimbursed Advances, and (c) unreimbursed Servicing
Advances from proceeds received in connection with such REO Disposition. The
proceeds from the REO Disposition, net of any payment to the Master Servicer as
provided above, shall be deposited in the REO Account and shall be transferred
to the Collection Account on the Determination Date in the month following
receipt thereof for distribution on the succeeding Master Servicer Remittance
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 and an Opinion of Counsel is obtained by the Master Servicer to
the effect that such sale shall not cause any Trust REMIC to fail to qualify as
a REMIC).
The Holders of the Class R Certificates shall be deemed to
have purchased the ownership interest held by the Holders of the Regular
Certificates in any Liquidated Mortgage Loan. After such repurchase, the Master
Servicer, if requested by such Certificateholders and if offered suitable
indemnification and reimbursement for expenses, may seek a deficiency judgment
to the extent permitted by law against the Mortgagor under such Liquidated
Mortgage Loan on behalf of the Holders of the Class R Certificates to the extent
of any Realized Loss.
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. Convertible Mortgage Loans.
With respect to any Convertible Mortgage Loan where the
Mortgagor has chosen to exercise its option to convert the Mortgage Rate
thereunder, the Master Servicer shall determine the fixed rate for such
Convertible Mortgage Loan in accordance with the terms of the applicable
Mortgage Note and to otherwise determine whether the related Mortgagor has
complied with the requirements thereof in order to exercise the conversion
option.
SECTION 3.26. Obligations of the Master Servicer
in Respect of Mortgage Rates and
Monthly Payments.
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In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan 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, without reimbursement, the amount of any
such shortfall and shall indemnify and hold harmless the Trust Fund, the
Trustee, the Guarantor, the Depositor and any successor servicer in respect of
any such liability. Such indemnities shall survive the termination or discharge
of this Agreement. Notwithstanding the foregoing, this Section 3.26 shall not
limit the ability of the Master Servicer to seek recovery of any such amounts
from the related Mortgagor under the terms of the related Mortgage Note, as
permitted by law.
SECTION 3.27. Solicitations.
From and after the Closing Date, the Master Servicer agrees
that it will not take any action or permit or cause any action to be taken by
any of its agents and Affiliates, or by any independent contractors or
independent mortgage brokerage companies on the Master Servicer's behalf, to
personally, by telephone, mail or electronic mail, solicit the Mortgagor under
any Mortgage Loan for the purpose of refinancing such Mortgage Loan; PROVIDED,
that the Master Servicer may solicit any Mortgagor for whom the Master Servicer
has received a request for verification of mortgage, a request for demand for
payoff, a mortgagor initiated written or verbal communication indicating a
desire to prepay the related Mortgage Loan, 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, ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as Trustee, in trust for registered Holders of Option One Mortgage
Loan Trust 2002-5, Asset-Backed Certificates, Series ▇▇▇▇-▇." ▇▇ 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)(xii), rather
than distributing such amounts to the Class C Certificateholders. On each such
Distribution Date,
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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
Interest. Upon the termination of the Trust, or the payment in full of the Class
A Certificates, the Mezzanine Certificates and the Class S 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 Trust REMIC and any payments to the Holders of the
Class A Certificates, the Mezzanine 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
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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 Guarantor, 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 Master Servicer that such Advancing Person is entitled to
reimbursement, such Advancing Person shall be entitled to receive reimbursement
pursuant to this Agreement for such amount to the extent provided in Section
3.29(b). Such notice from the Advancing Person must specify the amount of the
reimbursement 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 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, in the absence of the
Guarantee, materially and adversely affect the interests of any
Certificateholder, then the Guarantor shall not withhold its consent to the
Trust Fund's entering such facility; provided, however, that the Guarantor shall
consult with the NIMS Insurer regarding the consent to such facility, but the
decision to approve such facility shall be in the Guarantor's sole discretion.
(b) If an advancing facility is entered into, then the Master
Servicer shall not be permitted to reimburse itself therefor under Section
3.11(a)(ii), Section 3.11(a)(iii), Section 3.11(a)(v), Section 3.11(a)(vi)
Section 3.11(a)(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(a)(ii),
Section 3.11(a)(iii), Section 3.11(a)(v), Section 3.11(a)(vi) or Section
3.11(a)(vii), as the case may be, had the Master Servicer itself funded such
Advance or Servicing Advance. Unless otherwise consented to by the Guarantor, an
Advancing Person is not entitled to be reimbursed by the Trustee from the
Distribution Account for any unreimbursed Advances from funds held in the
Collection Account for future distribution pursuant to Section 4.04(b) or
3.11(a)(ii)(c). 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.
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Notwithstanding the foregoing, the amount and timing of
reimbursement to which an Advancing Person is entitled shall not exceed or
differ from (without the consent of the Guarantor and the NIMS Insurer) the
amount and timing of reimbursement to which the Master Servicer is entitled
pursuant to the terms of this Agreement. Furthermore, any advancing facility
entered into by the Master Servicer shall not be an obligation of a successor
master servicer (without the consent of such successor).
(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. Reports of Foreclosure and
Abandonment of Mortgaged Properties.
On or before May 31st of each year beginning in 2003, the
Master Servicer shall file the reports of foreclosure and abandonment of any
Mortgaged Property required by Section 6050J of the Code and cancellation of
indebtedness required under Section 6050P of the Code with the Internal Revenue
Service. The reports from the Master Servicer shall be made in a timely fashion
and in form and substance sufficient to meet the reporting requirements imposed
by such Section 6050J and 6050P.
SECTION 3.31. Notification of Adjustments.
On each Adjustment Date, the Master Servicer shall make
interest rate adjustments for each Adjustable Rate Mortgage Loan in compliance
with the requirements of the related Mortgage and Mortgage Note and Applicable
Regulations. The Master Servicer shall execute and deliver the notices required
by each Mortgage and Mortgage Note and Applicable Regulations regarding interest
rate adjustments. The Master Servicer also shall provide timely notification to
the Trustee and the Guarantor of all applicable data and information regarding
such interest rate adjustments and the Master Servicer's methods of implementing
such interest rate adjustments. Upon the discovery by the Master Servicer, the
Guarantor or the Trustee that the Master Servicer has failed to adjust or has
incorrectly adjusted a Mortgage Rate or a Monthly Payment pursuant to the terms
of the related Mortgage Note and Mortgage, the Master Servicer shall immediately
deposit in the Collection Account from its own funds the amount of any interest
loss caused thereby without reimbursement therefor; provided, however, the
Master Servicer shall be held harmless with respect to any interest rate
adjustments made by any servicer prior to the Master Servicer.
SECTION 3.32. Excess Net WAC Rate Reserve Fund.
No later than the Closing Date, the Trustee shall establish
and maintain with itself a separate, segregated trust account titled, "Excess
Net WAC Rate Reserve Fund, ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as
Trustee, in trust for registered Holders of Option One Mortgage Loan Trust
2002-5, Asset-Backed Certificates, Series 2002-5."
On each Distribution Date as to which there is a Excess Group
Net WAC Rate Amount or Excess Mezzanine Net WAC Rate Amount payable to the Class
A Certificates or the Class C Certificates, the Trustee has been directed by the
Class A Certificateholders and the
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Mezzanine Certificateholders to, and therefore will, deposit into the Excess Net
WAC Reserve Fund, the Excess Pool Net WAC Rate Amount and the Excess Mezzanine
Net WAC Rate Amount, as applicable, rather than distributing such amounts to the
applicable Class A Certificateholders and/or the Mezzanine Certificateholders.
On each such Distribution Date, the Trustee shall hold all such amounts for the
benefit of the Holders of the applicable Class A Certificates or the Class C
Certificates, and will distribute such amounts to the Holders of the applicable
Class A Certificates and/or the Class C Certificates to the extent of the Excess
Pool Net WAC Amount and the Excess Mezzanine Net WAC Amount.
For federal and state income tax purposes, the Class C
Certificateholders will be deemed to be the owners of the Excess Net WAC Reserve
Fund and all amounts deposited into the Excess Net WAC Rate Reserve Fund shall
be treated as amounts distributed by REMIC 3 to the Holders of the Class C
Interest. Upon the termination of the Trust, or the payment in full of the Class
A Certificates, the Mezzanine Certificates and the Class S Certificates, all
amounts remaining on deposit in the Excess Net WAC Rate Reserve Fund will be
released by the Trust and distributed to the Class C Certificateholders or their
designees. The Excess Net WAC Rate Reserve Fund will be part of the Trust but
not part of any Trust REMIC and any payments to the Holders of the Class A
Certificates or the Class C Certificates of Excess Group Net WAC Rate Amount or
Excess Mezzanine Net WAC Rate Amount 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 A Certificate or a Mezzanine Certificate,
such Certificateholders hereby agree to direct the Trustee, and the Trustee
hereby is directed, to deposit into the Excess Net WAC Rate Reserve Fund the
amounts described above on each Distribution Date as to which there is any
Excess Pool Net WAC Rate Amount or Excess Mezzanine Net WAC Rate Amount rather
than distributing such amounts to the Class A or Mezzanine Certificateholders,
as applicable. By accepting a Class A Certificate or a Mezzanine Certificate,
each such 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 Excess Net WAC Rate Reserve Fund 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 Excess
Net WAC Rate Reserve Fund 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 and the Class C Certificates to receive payments
from the Excess Net WAC Rate
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Reserve Fund in respect of any Excess Pool Net WAC Rate Amount or Excess
Mezzanine Net WAC Rate Amount shall be assigned a value of zero.
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ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions.
On the first Distribution Date, (i) the Initial Deposit
relating to the Group I Mortgage Loans will be transferred from the Group I
Initial Deposit Account to the Distribution Account and (ii) the Initial Deposit
relating to the Group II Mortgage Loans will be transferred from the Group II
Initial Deposit Account to the Distribution Account for inclusion in the
Available Funds for such Distribution Date.
(a)(I) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account that portion of Available Funds for such
Distribution Date consisting of the Group I Interest Remittance Amount for such
Distribution Date, and make the following disbursements and transfers in the
order of priority described below, in each case to the extent of the Group I
Interest Remittance Amount remaining for such Distribution Date:
(i) to the Guarantor, for payment of (a) the Guarantee Fee,
(b) any Guarantor Reimbursement Amount then due and (c) any amounts
owed to the Guarantor pursuant to Section 6.03(b);
(ii) to the Trustee, for payment of the Trustee Fee in respect
of the Group I Mortgage Loans;
(iii) concurrently, to the Holders of the Class A-1
Certificates and the Class S-1 Certificates, the Monthly Interest
Distributable Amount and the Unpaid Interest Shortfall Amount, if any,
for the Class A-1 Certificates and the Class S-1 Certificates for such
Distribution Date, on a PRO RATA basis based on the entitlement of each
such class pursuant to this clause (iii); and
(iv) to the Holders of the Class A-2 Certificates and the
Class S-2 Certificates, an amount equal to the excess, if any, of (x)
the amount required to be distributed pursuant to Section
4.01(a)(II)(ii) below for such Distribution Date over (y) the amount
actually distributed pursuant to such section from the Group II
Interest Remittance Amount.
(II) On each Distribution Date the Trustee shall withdraw from
the Distribution Account that portion of Available Funds for such Distribution
Date consisting of the Group II Interest Remittance Amount for such Distribution
Date, and make the following disbursements and transfers in the order of
priority described below, in each case to the extent of the Group II Interest
Remittance Amount remaining for such Distribution Date:
(i) to the Trustee, for payment of the Trustee Fee in respect
of the Group II Mortgage Loans;
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(ii) concurrently, to the Holders of the Class A-2
Certificates and the Class S-2 Certificates, the Monthly Interest
Distributable Amount and the Unpaid Interest Shortfall Amount, if any,
for the Class A-2 Certificates and the Class S Certificates for such
Distribution Date, on a PRO RATA basis based on the entitlement of each
such class pursuant to this clause (ii); and
(iii) to the Holders of the Class A-1 Certificates and the
Class S-1 Certificates, an amount equal to the excess, if any, of (x)
the amount required to be distributed pursuant to Section
4.01(a)(I)(iii) above for such Distribution Date over (y) the amount
actually distributed pursuant to such section from the Group I Interest
Remittance Amount.
(III) On each Distribution Date, following the distributions
made pursuant to Section 4.01(a)(I) and (II) above, the Trustee shall make the
following disbursements and transfers in the order of priority described below,
in each case to the extent of the sum of the Group I Interest Remittance Amount
and the Group II Interest Remittance Amount remaining undistributed for such
Distribution Date:
(i) to the Holders of the Class M-1 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates;
(ii) to the Holders of the Class M-2 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates;
(iii) to the Holders of the Class M-3 Certificates, the
Monthly Interest Distributable Amount allocable to such Certificates;
(iv) to the Holders of the Class M-4 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates; and
(v) to the Holders of the Class B Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates.
(b)(I) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, distributions in respect of
principal to the extent of the Group I Principal Distribution Amount shall be
made in the following amounts and order of priority:
(i) first, to the Guarantor for payment of any Guarantor
Reimbursement Amount then due (to the extent not paid from the Group I
Interest Remittance Amount for such Distribution Date):
(ii) second, to the Holders of the Class A-1 Certificates,
until the Certificate Principal Balance thereof has been reduced to
zero;
(iii) third, after taking into account the amount distributed
to the Holders of the Class A-2 Certificates pursuant to Section
4.01(b)(II)(i) below on such Distribution Date, to
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the Holders of the Class A-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero.
(II) On each Distribution Date (a) prior to the Stepdown Date
or (b) on which a Trigger Event is in effect, distributions in respect of
principal to the extent of the Group II Principal Distribution Amount shall be
made in the following amounts and order of priority:
(i) first, to the Holders of the Class A-2 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero;
(ii) second, after taking into account the amount distributed
to the Holders of the Class A-1 Certificates pursuant to Section
4.01(b)(I)(ii) above on such Distribution Date, to the Holders of the
Class A-1 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero.
(III) On each Distribution Date (a) prior to the Stepdown Date
or (b) on which a Trigger Event is in effect, distributions in respect of
principal to the extent of the sum of the Group I Principal Distribution Amount
and the Group II Principal Distribution Amount remaining undistributed for such
Distribution Date shall be made in the following amounts and order of priority:
(i) first, to the Holders of the Class M-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero;
(ii) second, to the Holders of the Class M-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to
zero;
(iii) third, to the Holders of the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to
zero;
(iv) fourth, to the Holders of the Class M-4 Certificates,
until the Certificate Principal Balance thereof has been reduced to
zero; and
(v) fifth, to the Holders of the Class B Certificates, until
the Certificate Principal Balance thereof has been reduced to zero.
(c)(I) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions in respect
of principal to the extent of the Group I Principal Distribution Amount shall be
made in the following amounts and order of priority:
(i) first, to the Guarantor for payment of any Guarantor
Reimbursement Amount then due (to the extent not paid from the Group I
Interest Remittance Amount for such Distribution Date);
(ii) second, to the Holders of the Class A-1 Certificates, the
Class A-1 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
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(iii) third, to the extent of the portion, if any, of the
Class A-1 Principal Distribution Amount remaining undistributed
pursuant to Section 4.01(c)(I)(ii) above on such Distribution Date, and
after taking into account the amount distributed to the Holders of the
Class A-2 Certificates pursuant to Section 4.01(c)(II)(i) below on such
Distribution Date, to the Holders of the Class A-2 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero; and
(iv) fourth, to the Holders of the Class A-2 Certificates, an
amount equal to the excess, if any, of (x) the amount required to be
distributed pursuant to Section 4.01(c)(II)(i) below for such
Distribution Date over (y) the sum of (A) the amount actually
distributed pursuant to Section 4.01(c)(II)(i) below from the Group II
Principal Distribution Amount on such Distribution Date and (B) the
amount, if any, distributed to the Holders of the Class A-2
Certificates pursuant to Section 4.01(c)(I)(iii) above on such
Distribution Date.
(II) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions in respect
of principal to the extent of the Group II Principal Distribution Amount shall
be made in the following amounts and order of priority:
(i) first, to the Holders of the Class A-2 Certificates, the
Class A-2 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(ii) second, to the extent of the portion, if any, of the
Class A-2 Principal Distribution Amount remaining undistributed
pursuant to Section 4.01(c)(II)(i) above on such Distribution Date, and
after taking into account the amount distributed to the Holders of the
Class A-1 Certificates pursuant to Section 4.01(c)(I)(ii) above on such
Distribution Date, to the Holders of the Class A-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero; and
(iii) third, to the Holders of the Class A-1 Certificates, an
amount equal to the excess, if any, of (x) the amount required to be
distributed pursuant to Section 4.01(c)(I)(ii) above for such
Distribution Date over (y) the sum of (A) the amount actually
distributed pursuant to Section 4.01(c)(I)(ii) above from the Group I
Principal Distribution Amount on such Distribution Date and (B) the
amount, if any, distributed to the Holders of the Class A-1
Certificates pursuant to Section 4.01(c)(II)(ii) above on such
Distribution Date.
(III) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions in respect
of principal to the extent of the sum of the Group I Principal Distribution
Amount and the Group II Principal Distribution Amount remaining undistributed
for such Distribution Date shall be made in the following amounts and order of
priority:
(i) first, to the Holders of the Class M-1 Certificates, the
Class M-1 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(ii) second, to the Holders of the Class M-2 Certificates, the
Class M-2 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
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(iii) third, to the Holders of the Class M-3 Certificates, the
Class M-3 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero;
(iv) fourth, to the Holders of the Class M-4 Certificates, the
Class M-4 Principal Distribution Amount until the Certificate Principal
Balance thereof has been reduced to zero; and
(v) fifth, to the Holders of the Class B Certificates, the
Class B 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, distributable
to such Holders as part of the Group I Principal Distribution Amount
and/or the Group II Principal Distribution Amount as described under
Section 4.01(b) and Section 4.01(c) above;
(ii) 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;
(viii) to the Holders of the Class M-4 Certificates, in an
amount equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(ix) to the Holders of the Class M-4 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(x) to the Holders of the Class B Certificates, in an amount
equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
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(xi) to the Holders of the Class B Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(xii) 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;
(xiii) to the Trustee in respect of any amounts due to it from
the Trust Fund pursuant to Section 3.06, Section 7.02(a) and Section
8.05 and not previously reimbursed;
(xiv) to the Master Servicer in respect of any amounts due to
it from the Trust Fund pursuant to Section 6.03 and not previously
reimbursed;
(xv) 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;
(xvi) 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
(xvii) any remaining amounts to the Holders of the Residual
Certificates (in respect of the appropriate Class R Interest).
Without limiting the provisions of Section 10.01(c), by
acceptance of the Residual Certificates the Holders of the Residual Certificates
agree, and it is the understanding of the parties hereto, that for so long as
any of the Notes insured by the NIMS Issuer are outstanding or any amounts are
reimbursable or payable to the NIMS Insurer in accordance with the terms of the
Indenture, in connection with any amounts distributable to the Holders of the
Residual Certificates, their rights to receive the amounts so distributable
hereby are pledged to the indenture trustee under the Indenture and any such
amounts shall be paid by the Trustee and to the extent received by the Holders
of the Residual Certificates they shall pay any such amounts, to the Holders of
the Class C Certificates.
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-1 Certificates, the Class A-2 Certificates, the Class S-1 Certificates and the
Class S-2 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, FOURTH, to
the Class M-3 Certificates, FIFTH, to the
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Class M-4 Certificates and FIFTH, to the Class B 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.
(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. The Guarantee.
On each Distribution Date following receipt of a statement (as
set forth in Section 4.09) that indicates a Deficiency Amount for such
Distribution Date, the Guarantor shall distribute a Guarantor Payment in an
aggregate amount equal to the Deficiency Amount for such Distribution Date
directly to the Holders of the Guaranteed Certificates, without first depositing
such amount in the Distribution Account, as follows: (i) the portion of any such
Deficiency Amount related to clause (i) of the definition of Deficiency Amount
shall be distributed to the Class A-1 Certificateholders and Class S-1
Certificateholders on a PRO RATA basis based on the Monthly Interest
Distributable Amount and the Unpaid Interest Shortfall Amount distributable on
such Certificates with respect to such Distribution Date; and (ii) the portion
of any such Deficiency Amount related to clause (ii) of the definition of
Deficiency Amount shall be distributed to the Class A-1 Certificateholders.
SECTION 4.03. Statements.
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(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 Guarantor, 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
and the calculation thereof;
(iii) the Overcollateralized Amount, the Overcollateralization
Release Amount, the Overcollateralization Deficiency Amount, 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 each Loan Group for
the related Due Period;
(vi) the Principal Balance of the Mortgage Loans in each Loan
Group (after giving effect to the principal portion of Monthly Payments
due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related
Prepayment Period);
(vii) as of the related Determination Date and with respect to
each Loan Group, (A) the number of Mortgage Loans, (B) the aggregate
principal balance of the Mortgage Loans, (C) the weighted average
remaining term to maturity of the Mortgage Loans and (D) the weighted
average Mortgage Rate as of the first day of the most recently ended
Due Period of the Mortgage Loans 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 in each Loan Group 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
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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 in each Loan Group as of the Close of Business of the
last day of the preceding Prepayment Period;
(xi) the aggregate amount of Principal Prepayments for each
Loan Group made during the related Prepayment Period;
(xii) the aggregate amount of Realized Losses for each Loan
Group incurred during the related Prepayment Period, the cumulative
amount of Realized Losses for each Loan Group and the Three-Month
Rolling Delinquency Percentage;
(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, each class of Mezzanine Certificates and the Class C
Certificates and the Notional Amount of each Class of Class S
Certificates, after giving effect to the distributions made on such
Distribution Date;
(xv) the Monthly Interest Distributable Amount in respect of
each class of Class A Certificates, the Class S Certificates, each
Class of Mezzanine Certificates and the Class C Certificates for such
Distribution Date and the Unpaid Interest Shortfall Amount, if any,
with respect to the Class A Certificates, the Class S Certificates,
each Class of Mezzanine Certificates and the Class C Certificates for
such Distribution Date;
(xvi) the aggregate amount of any Prepayment Interest
Shortfalls for each Loan Group 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 each class of
Class A Certificates, the Class S Certificates and each Class of
Mezzanine Certificates, if any, for such Distribution Date and the
amount remaining unpaid after reimbursements therefor on such
Distribution Date;
(xix) the Overcollateralization Target Amount,
Overcollateralized Amount and any 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;
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(xxi) the Available Funds;
(xxii) the respective Pass-Through Rates applicable to each
Class of Class A Certificates, each Class of Class S Certificates, each
Class of Mezzanine Certificates and the Class C Certificates for such
Distribution Date and the Pass-Through Rate applicable to each Class of
Class A Certificates and each Class of Mezzanine Certificates for the
immediately succeeding Distribution Date;
(xxiii) the amount on deposit in the Pre-Funding Accounts
immediately prior to the related Prepayment Period, the amount
withdrawn therefrom during the related Prepayment Period and the amount
remaining on deposit therein as of the end of the related Prepayment
Period and as of such Distribution Date, the amount on deposit in, and
the amounts withdrawn from and included in Available Funds, each
Interest Coverage Account and the Net WAC Rate Carryover Reserve
Account;
(xxiv) for the distribution occurring on the Distribution Date
immediately following the end of the Funding Period, the balance on
deposit in the Group I Pre-Funding Account and/or the Group II
Pre-Funding Account that has not been used to purchase Subsequent Group
I Mortgage Loans and/or Subsequent Group II Mortgage Loans, as
applicable, and that is being distributed to the related Class A
Certificates as a mandatory distribution of principal, if any, on such
Distribution Date;
(xxv) the Guarantee Fee to be paid to the Guarantor with
respect to the Guaranteed Certificates for such Distribution Date;
(xxvi) such other information as the Guarantor may reasonably
request in such format as reasonably requested by the Guarantor and any
other information that is required by the Code and regulations
thereunder to be made available to Certificateholders; and
(xxvii) the Maximum Cap Rate for 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 Guarantor, the NIMS Insurer and
the Rating Agencies via the Trustee's internet website. The Trustee's internet
website shall initially be located at "▇▇▇.▇▇▇▇▇▇▇.▇▇▇". Assistance in using the
website can be obtained by calling the Trustee's customer service desk at (301)
815-6600. Parties that are unable to use the above distribution option are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Trustee shall have the right to
change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes. As a condition to access the Trustee's internet
website, the Trustee may require registration and the acceptance of a
disclaimer. The Trustee will not be liable for the dissemination of information
in accordance with this Agreement. The Trustee shall also be entitled to rely on
but shall not be responsible for the content or accuracy of any information
provided by third parties for purposes of preparing the distribution
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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
Guarantor, the NIMS Insurer and each Person who at any time during the calendar
year was a Certificateholder of a Regular Certificate, if requested in writing
by such Person, such information as is reasonably necessary to provide to such
Person a statement containing the information set forth in subclauses (i)
through (iii) above, aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be prepared and furnished by the Trustee to
Certificateholders pursuant to any requirements of the Code as are in force from
time to time.
(c) On each Distribution Date, the Trustee shall forward to
the NIMS Insurer and the Residual Certificateholders a copy of the reports
forwarded to the Regular Certificateholders in respect of such Distribution Date
with such other information as the Trustee deems necessary or appropriate.
(d) Within a reasonable period of time after the end of each
calendar year, the Trustee shall deliver to the NIMS Insurer and each Person who
at any time during the calendar year was a Residual Certificateholder, if
requested in writing by such Person, such information as is reasonably necessary
to provide to such Person a statement containing the information provided
pursuant to the previous paragraph aggregated for such calendar year or
applicable portion thereof during which such Person was a Residual
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared and furnished to Certificateholders by the Trustee pursuant to any
requirements of the Code as from time to time in force.
(e) By not later than September 15, 2002, the Trustee is
required to (i) confirm, to the extent such data is available in the Information
Circular or from Banc of America Securities LLC, that the cash flows, weighted
average lives, yields and credit enhancement default analysis for the Class A-1
Certificates and Class S-1 Certificates as presented in the Information Circular
are correct therein based on the assumptions and principal and interest
methodology described in the Information Circular and are consistent with the
model developed by the Trustee for the calculations that the Trustee is required
to make hereunder and (ii) notify the Guarantor that the information referred to
in clause (i) above is consistent with the model developed by the Trustee.
SECTION 4.04. Remittance Reports; Advances.
(a) On the third Business Day following each Determination
Date by noon (California time) 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
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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, the Guarantor 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. Not later than the third Business Day following a
Determination Date by noon (California time), 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, which information the Master Servicer will provide to the Guarantor
upon the Guarantor's request, 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
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Advances or reimburse for previously made Advances. The Trustee will provide
notice to the Guarantor, 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.
Notwithstanding the above, the Guarantor shall have the right to require, at any
time, the Master Servicer to remit, from its own funds, prior to the next
succeeding Master Servicer Remittance Date after notice to the Master Servicer,
to the Collection Account an amount equal to the aggregate amount of all
Advances previously made out of funds from the Collection Account, and not
theretofore repaid from collections on the related Mortgage Loans, and related
Advances then due, if, in its reasonable judgment, the Guarantor determines such
action is necessary to protect its interest. In such event, (i) the Master
Servicer shall thereafter remit to the Trustee out of the Master Servicer's own
funds all Advances required to be made and (ii) the Guarantee Fee with respect
to the Guaranteed Certificates shall become payable on the basis of a 360- day
year of twelve 30-day months.
(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 Guarantor, the
NIMS Insurer, the Depositor and the Trustee.
SECTION 4.05. Pre-Funding Accounts.
(a) No later than the Closing Date, the Trustee shall
establish and maintain two segregated trust accounts that are each Eligible
Accounts, which shall be titled "Group I Pre-Funding Account, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as trustee for the registered holders of Option
One Mortgage Loan Trust 2002-5, Asset-Backed Certificates, Series 2002-5" (the
"Group I Pre-Funding Account") and "Group II Pre-Funding Account, ▇▇▇▇▇ Fargo
Bank Minnesota, National Association, as trustee for the registered holders of
Option One Mortgage Loan Trust 2002- 5, Asset-Backed Certificates, Series
2002-5" (the "Group II Pre-Funding Account"). The Trustee shall, promptly upon
receipt, deposit in the applicable Pre-Funding Account and retain therein the
Original Group I Pre-Funded Amount and the Original Group II Pre-Funded Amount,
as applicable, remitted on the Closing Date to the Trustee by the Depositor.
Funds deposited in the Pre-Funding Accounts 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
Accounts 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
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from such account pursuant to this Agreement, if a Person other than the Trustee
or an Affiliate manages or advises such investment or (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. For federal income tax purposes, the Master Servicer shall be the
owner of the Pre-Funding Accounts 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 Group I Pre-Funding Account and the Group
II Pre-Funding Account shall be transferred to the Group I Interest Coverage
Account and the Group II Interest Coverage Account, as applicable, 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 Accounts 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 Accounts be assets of
any Trust REMIC.
(c) Amounts on deposit in the Pre-Funding Accounts shall be
withdrawn by the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall
withdraw from the Group I Pre-Funding Account or the Group II
Pre-Funding Account, as applicable, an amount equal to 100% of the
Stated Principal Balances of the Subsequent Group I Mortgage Loans or
the Subsequent Group II Mortgage Loans, as applicable, 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
2.10 with respect to such transfer and assignment;
(ii) If the amount on deposit in the Pre-Funding Accounts
(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 Accounts (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 Accounts or deposited therein in error; and
(iv) To clear and terminate the Pre-Funding Accounts 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.
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SECTION 4.06. Interest Coverage Accounts.
(a) No later than the Closing Date, the Trustee shall
establish and maintain two segregated trust accounts that are Eligible Accounts,
which shall be titled "Group I Interest Coverage Account, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as trustee for the registered holders of Option
One Mortgage Loan Trust 2002-5, Asset-Backed Certificates, Series 2002-5" (the
"Group I Interest Coverage Account") and "Group II Interest Coverage Account,
▇▇▇▇▇ Fargo Bank Minnesota, National Association, as trustee for the registered
holders of Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5" (the "Group II Interest Coverage Account"). The Trustee shall,
promptly upon receipt, deposit in the Group I Interest Coverage Account and the
Group II Interest Coverage Account, and retain therein the Group I Interest
Coverage Amount and the Group II Interest Coverage Amount, respectively,
remitted on the Closing Date to the Trustee by the Depositor. Funds deposited in
the Interest Coverage Accounts shall be held in trust by the Trustee for the
Certificateholders and the Guarantor 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 Accounts and shall report all items of
income, deduction, gain or loss arising therefrom. At no time will the Interest
Coverage Accounts be assets of any Trust REMIC. All income and gain realized
from investment of funds deposited in the Interest Coverage Accounts 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 Accounts 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 Group I Interest Coverage Account and the Group
II Interest Coverage Account and deposit in the Distribution Account an amount
equal to 30 days' interest on the excess, if any, of the Original Group I
Pre-Funded Amount or the Original Group II Pre-Funded Amount, as applicable,
over the aggregate Principal Balance of Subsequent Group I Mortgage Loans or
Subsequent Group II Mortgage Loans, as applicable, 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 (A) the weighted average
Pass-Through Rate of the Class A Certificates and the Mezzanine Certificates for
such Distribution Date plus (B) 0.6065% plus (C) the Guarantee Fee Rate
applicable to the Guaranteed Certificates, with each such rate, solely for the
purposes of the foregoing calculation, 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 LIBOR for the
first Accrual Period. 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 Group
I Interest Coverage Account and the Group II Interest Coverage Account
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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 Group I Mortgage Loans or Subsequent Group II Mortgage
Loans, as applicable, 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 Accounts 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:
With respect to the Group I Mortgage Loans:
(1)(i) first, to the Holders of REMIC 1 Regular Interest
LT-S1, 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 second, to
Holders of REMIC 1 Regular Interest LT1, REMIC 1 Regular Interest
LT1-PF and REMIC 1 Regular Interest LT-P 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 LT-P, 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)(I) 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 LT1,
until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1 is reduced to zero;
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(b) to the Holders of REMIC 1 Regular Interest
LT1-PF, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1-PF is reduced to zero;
(c) to the Holders of REMIC 1 Regular Interest LT-S1,
until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT-S1 is reduced to zero; provided, however, for the
first three Distribution Dates, such amounts relating to the
Initial Group I Mortgage Loans shall be allocated to REMIC 1
Regular Interest LT1 and REMIC 1 Regular Interest LT-S1 in the
order and priority described above and such amounts relating
to the Subsequent Group I Mortgage Loans shall be allocated to
REMIC 1 Regular Interest LT1-PF;
(d) any remaining amount to the Holders of the Class
R Certificates (in respect of the Class R-1 Interest).
With respect to the Group II Mortgage Loans:
(1) first, to the Holders of REMIC 1 Regular Interest LT2, 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 second, to Holders of REMIC
1 Regular Interest LT2 and REMIC 1 Regular Interest LT-S2 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
(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 LT2,
until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT2 is reduced to zero;
(b) to the Holders of REMIC 1 Regular Interest
LT2-PF, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT2-PF is reduced to zero;
(c) to the Holders of REMIC 1 Regular Interest LT-S2,
until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT-S2 is reduced to zero; provided, however, for the
first three Distribution Dates, such amounts relating to the
Initial Group II Mortgage Loans shall be allocated to REMIC 1
Regular Interest LT2 and REMIC 1 Regular Interest LT-S2 in the
order and priority described above and such amounts relating
to the Subsequent Group II Mortgage Loans shall be allocated
to REMIC 1 Regular Interest LT2-PF;
(d) any remaining amount to the Holders of the Class
R Certificates (in respect of the Class R-1 Interest).
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On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Group I Mortgage Loans and the Group II Mortgage Loans
received during the related Prepayment Period will be distributed by REMIC 1 to
the Holders of REMIC 1 Regular Interest LT- P. The payment of the foregoing
amounts to the Holders of REMIC 1 Regular Interest LT-P 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:
(i) first, to Holders of REMIC 2 Regular
Interest MT-AA, REMIC 2 Regular Interest MT-A1, REMIC
2 Regular Interest MT-A2, REMIC 2 Regular Interest
MT-M1, REMIC 2 Regular Interest MT-M2, REMIC 2
Regular Interest MT-M3, REMIC 2 Regular Interest
MT-M4, REMIC 2 Regular Interest MT-B, REMIC 2 Regular
Interest MT-ZZ and REMIC 2 Regular Interest MT-P, 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 MT-ZZ shall be reduced 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 MT-ZZ Uncertificated Accrued Interest
Deferral Amount and shall be paid to the other REMIC
2 Regular Interests in the same proportion and
priority as Net Monthly Excess Cashflow is paid to
the corresponding Certificates as Extra Principal
Distribution 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 MT-AA
and REMIC 2 Regular Interest MT-P, 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 MT-P 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 MT-P, until $100
has been distributed pursuant to this clause;
(b) to the Holders of REMIC 2 Regular Interest MT-A1,
REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest
MT-M1, REMIC 2 Regular Interest MT-M2, REMIC 2 Regular
Interest MT-M3, REMIC 2 Regular Interest MT- M4 and REMIC 2
Regular Interest MT-B, 1.00% of such remainder, in the same
proportion as principal payments are allocated to the
Corresponding Certificates,
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until the Uncertificated Principal Balances of such REMIC 2
Regular Interests are reduced to zero;
(c) to the Holders of REMIC 2 Regular Interest MT-ZZ,
1.00% of such remainder, until the Uncertificated Principal
Balance of such REMIC 2 Regular Interest is reduced to zero;
then
(e) 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 MT-AA and REMIC 1 Regular Interest
MT-P, in that order and (ii) REMIC 2 Regular Interest MT-ZZ, respectively;
provided that REMIC 2 Regular Interest MT-P 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 MT-P, 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
MT-P. The payment of the foregoing amounts to the Holders of REMIC 2 Regular
Interest MT-P 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 B Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-4 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; fifth,
to the Class M-3 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; sixth, to the Class M-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and seventh, 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
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otherwise payable in respect thereof pursuant to Section 4.01(d)(xiii). 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 in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest MT-AA
and REMIC 2 Regular Interest MT-ZZ 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 MT-AA and REMIC 2
Regular Interest MT-ZZ 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 MT-AA, REMIC 2 Regular Interest
MT-B and REMIC 2 Regular Interest MT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-B has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest MT-AA, REMIC 2 Regular Interest MT-M4 and REMIC 2 Regular
Interest MT- ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC 2 Regular Interest MT-M4 has been reduced to zero;
fifth, to the Uncertificated Principal Balances of REMIC 2 Regular Interest
MT-AA, REMIC 2 Regular Interest MT-M3 and REMIC 2 Regular Interest MT- ZZ, 98%,
1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 2
Regular Interest MT-M3 has been reduced to zero; sixth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest MT-AA, REMIC 2 Regular Interest
MT-M2 and REMIC 2 Regular Interest MT- ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 2 Regular Interest MT-M2 has been
reduced to zero; and seventh, to the Uncertificated Principal Balances of REMIC
2 Regular Interest MT-AA, REMIC 2 Regular Interest MT-M1 and REMIC 2 Regular
Interest MT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest MT-M1 has been reduced to zero.
SECTION 4.09. The Trustee Remittance Report.
(a) On each Trustee Reporting Date by noon New York time, the
Trustee shall furnish a report (the "Trustee Remittance Report") in the form
attached as Exhibit Q to this Agreement (together with a statement containing
the information that is required to be included in the statement to be prepared
by the Trustee pursuant to Section 4.03) to the Guarantor and the NIMS Insurer
by electronic medium as agreed to by the Trustee, the Guarantor and the NIMS
Insurer.
(b) Subject to paragraph (d) below, if in any month the
Trustee fails to deliver the Trustee Remittance Report by noon New York time on
the related Trustee Reporting Date, the Guarantor shall use its best efforts to
determine the amount of any required Guarantor Payment. If on any Distribution
Date the Guarantor makes any Guarantor Payment as a result of such failure of
the Trustee to deliver the Trustee Remittance Report, the Trustee shall pay the
Guarantor from its own funds (not from the proceeds of the Trust Fund), not
later than the fourth Business Day following such Distribution Date, a $100 fee
plus an amount equal to the product of (i) the principal portion of such
Guarantor Payment, (ii) a percentage equal to (A) the Prime Rate plus 2.00%
divided by (B) 365 and (iii) the number of days between the Trustee Reporting
Date and the date on which the Guarantor received the Trustee Remittance Report.
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(c) Subject to paragraph (d) below, if in any month the
Trustee fails to provide the Guarantor the Trustee Remittance Report on or prior
to the Trustee Reporting Date, the Trustee shall pay to the Guarantor the
following amounts: (i) upon the first such failure, $500; (ii) upon the second
such failure, $750; and (iii) upon the third such failure, $1,000; provided,
however, that the Trustee shall not be required to make any such payment upon
the first such failure during each successive two year period following the
Closing Date. The fourth such failure to provide a Trustee Remittance Report to
the Guarantor pursuant to Section 4.09(a) shall constitute an event of default
and permit the Guarantor to remove the Trustee for cause.
(d) The Trustee shall have no responsibility or liability
(including removal as Trustee) under paragraphs (b) and (c) of this Section 4.09
if the Trustee's failure to timely deliver the Trustee Remittance Report is due
to the failure of the Master Servicer to furnish the Trustee with a report in
accordance with Section 4.04(a). If the Trustee's failure to timely deliver the
Trustee Remittance Report is due to the failure of the Master Servicer to
furnish the Trustee with a report in accordance with Section 4.04(a), the Master
Servicer shall pay to the Guarantor the amount set forth in Section 4.09(b)
above (i.e., the product of the amounts described in clauses (i), (ii) and (iii)
of Section 4.09(b) above) and the following additional amounts: (i) upon the
first such failure, $500; (ii) upon the second such failure, $750; and (iii)
upon the third such failure, $1,000; provided, however, that the Master Servicer
shall not be required to make any such payment upon the first such failure
during each successive two year period following the Closing Date. The fourth
such failure to provide the Trustee with a report in accordance with Section
4.04(a) and thereby causing the Trustee's failure to timely deliver a Trustee
Remittance Report to the Guarantor pursuant to Section 4.09(a) shall constitute
a Master Servicer Event of Termination.
(e) On each Trustee Reporting Date by noon New York time, the
Trustee shall forward a Liquidation Report for the related Distribution Date (in
the form attached as Exhibit N to this Agreement) to the Guarantor and the NIMS
Insurer by electronic medium as agreed to by the Trustee, the Guarantor and the
NIMS Insurer, to the extent that the Trustee has received from the Master
Servicer such Liquidation Report.
SECTION 4.10. Loan Data Remittance Report.
(a) On each Loan Data Remittance Date by noon Pacific Time,
the Master Servicer shall furnish a complete and accurate report (the "Loan Data
Remittance Report") in the form attached as Exhibit P to this Agreement to the
Guarantor and the NIMS Insurer by electronic medium as agreed to by the Master
Servicer, the NIMS Insurer and the Guarantor. In addition, the Master Servicer
shall (i) furnish to the Guarantor and the NIMS Insurer a report with respect to
the Mortgage Loans that have been voluntarily repurchased by the Master Servicer
pursuant to Section 3.16 during the related Prepayment Period indicating the
Mortgage Loan number, the date of repurchase and the Principal Balance of each
Mortgage Loan so repurchased and (ii) furnish to the Guarantor and the NIMS
Insurer a Monthly Appraisal Defects Report and a Monthly Quality Control Report,
each in form and substance satisfactory to the Guarantor.
(b) If in any month the Master Servicer fails to provide the
Guarantor the Loan Data Remittance Report on or prior to the Loan Data
Remittance Date or if such report is deemed to be materially incomplete or
inaccurate by the Guarantor, the Master Servicer shall pay to the
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Guarantor the following amounts: (i) upon the first such failure, $500; (ii)
upon the second such failure, $750; and (iii) upon the third such failure,
$1,000; provided, however, that the Master Servicer shall not be required to
make any such payment upon the first such failure during each successive two
year period following the Closing Date. The fourth such failure to provide a
Loan Data Remittance Report to the Guarantor pursuant to Section 4.06(a) shall
constitute a Master Servicer Event of Termination.
SECTION 4.11. Compliance with Withholding.
Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
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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 Residual Certificates shall be substantially in the forms annexed hereto
as exhibits, and shall, on original issue, be executed, authenticated and
delivered by the Trustee to or upon the order of the Depositor concurrently with
the sale and assignment to the Trustee of the Trust Fund. The Class A
Certificates, the Class S Certificates and the Mezzanine 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 Residual
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
145
behalf of the Trust shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute on behalf of the Trust and
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by the Trustee or the
Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in writing.
In addition, (i) with respect to each Class R Certificate, the holder thereof
may exchange, in the manner described above, such Class R Certificate for three
separate certificates, each representing such holder's respective Percentage
Interest in the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest, respectively, in each case that was evidenced by the Class R
Certificate being exchanged and (ii) with respect to each Class R-X Certificate,
the holder thereof may exchange, in the manner described above, such Class R-X
Certificate for two separate certificates, each representing such holder's
respective Percentage Interest in the Class R-4 Interest and the Class R-5
Interest, respectively, in each case that was evidenced by the Class R-X
Certificate being exchanged.
(b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Certificates may not
be transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized
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to execute a Letter of Representations with the Depository or take such other
action as may be necessary or desirable to register a Book-Entry Certificate to
the Depository. In the event of any conflict between the terms of any such
Letter of Representation and this Agreement, the terms of this Agreement shall
control.
(c) If (i)(x) the Depository or the Depositor advises the
Trustee in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as Depository and (y) the Trustee or the Depositor
is unable to locate a qualified successor, (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 B Certificate, Class C Certificate, Class P Certificate or Residual
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 B Certificate, Class C Certificate, Class P
Certificate or Residual Certificates by the Depositor (i) 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 H) 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 B Certificate, 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.
No transfer of a Class B Certificate, Class C Certificate,
Class P Certificate or Residual Certificate or any interest therein shall be
made to any Plan subject to ERISA or Section
147
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person acquiring such Certificates with "Plan Assets" of a Plan
within the meaning of the Department of Labor regulation promulgated at 29
C.F.R. ss. 2510.3-101 ("Plan Assets"), as certified by such transferee in the
form of Exhibit M, 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. Neither a certification nor an Opinion
of Counsel will 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.
Notwithstanding the foregoing, the Class B Certificates may be
transferred to a transferee that, as certified in Exhibit M, is an insurance
company and (A) the source of funds used to purchase such Certificate is an
"insurance company general account" (as such term is defined in PTCE 95-60), (B)
the conditions set forth in PTCE 95-60 have been satisfied and (C) there is no
Plan with respect to which the amount of such general account's reserves and
liabilities for contracts held by or on behalf of such Plan and all other Plans
maintained by the same employer (or any "affiliate" thereof, as defined in PTCE
95-60) or by the same employee organization, exceeds 10% of the total of all
reserves and liabilities of such general account (as determined under PTCE
95-60) as of the date of the acquisition of such Certificates.
Each Transferee of a Mezzanine Certificate (other than the
Class B Certificates) 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") 90-59, 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 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.
If any Class B Certificate, Class C Certificate, Class P
Certificate or Residual 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
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was effected in violation of the provisions of the preceding paragraph shall
indemnify and hold harmless the Depositor, the Master Servicer, the Guarantor,
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 Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a
Residual Certificate unless such Ownership Interest is a PRO RATA
undivided interest.
(iii) In connection with any proposed transfer of any
Ownership Interest in a Residual Certificate, the Trustee shall as a
condition to registration of the transfer, require delivery to it, in
form and substance satisfactory to it, of each of the following:
(A) an affidavit in the form of Exhibit K hereto from
the proposed transferee to the effect that such transferee is
a Permitted Transferee and that it is not acquiring its
Ownership Interest in the Residual Certificate that is the
subject of the proposed transfer as a nominee, trustee or
agent for any Person who is not a Permitted Transferee; and
(B) a covenant of the proposed transferee to the
effect that the proposed transferee agrees to be bound by and
to abide by the transfer restrictions applicable to the
Residual Certificates.
(iv) Any attempted or purported transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section shall be absolutely null and void and shall vest no rights
in the purported transferee. If any purported transferee shall, in
violation of the provisions of this Section, become a Holder of a
Residual Certificate, then the prior Holder of such Residual
Certificate that is a Permitted Transferee shall, upon discovery that
the registration of transfer of such Residual Certificate was not in
fact permitted by this Section, be restored to all rights as Holder
thereof retroactive to the date of registration of transfer of such
Residual Certificate. The Trustee shall be under no liability to any
Person for any registration of transfer of a Residual Certificate that
is in fact not permitted by this Section or for making any
distributions due on such Residual Certificate to the Holder thereof or
taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Trustee received the
documents specified in clause (iii). The
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Trustee shall be entitled to recover from any Holder of a Residual
Certificate that was in fact not a Permitted Transferee at the time
such distributions were made all distributions made on such Residual
Certificate. Any such distributions so recovered by the Trustee shall
be distributed and delivered by the Trustee to the prior Holder of such
Residual Certificate that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Trustee shall have the right but
not the obligation, without notice to the Holder of such Residual
Certificate or any other Person having an Ownership Interest therein,
to notify the Depositor to arrange for the sale of such Residual
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of such Residual
Certificate that is a Permitted Transferee, except that in the event
that the Trustee determines that the Holder of such Residual
Certificate may be liable for any amount due under this Section or any
other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim.
The terms and conditions of any sale under this clause (v) shall be
determined in the sole discretion of the Trustee and it shall not be
liable to any Person having an Ownership Interest in a Residual
Certificate as a result of its exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Trustee upon receipt of
reasonable compensation will provide to the Internal Revenue Service,
and to the persons specified in Sections 860E(e)(3) and (6) of the
Code, information needed to compute the tax imposed under Section
860E(e)(5) of the Code on transfers of residual interests to
disqualified organizations. The Trustee will be entitled to additional
compensation from such person for the cost of providing such
information, but the Trustee shall in all events be required to furnish
such information regardless of whether the Trustee has been
compensated.
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, the Guarantor and the NIMS Insurer, in form and
substance satisfactory to the Trustee, the Guarantor 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 Trust REMIC to fail
to qualify as a REMIC or have any adverse impact on such 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.
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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 Guarantor, the NIMS Insurer and
the Certificate Registrar such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Trustee or
the Certificate Registrar that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute on behalf of the Trust, authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor and Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee and the
Certificate Registrar) in connection therewith. Any duplicate Certificate issued
pursuant to this Section, shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Master Servicer, the Depositor, the Trustee, the
Guarantor, the NIMS Insurer, the Certificate Registrar, any Paying Agent and any
agent of the Master Servicer, the Depositor, the Trustee, the Guarantor, 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, the Guarantor 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, the Guarantor 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
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the withholding of payments in respect of Federal income taxes due from
Certificate Owners and otherwise comply with the provisions of this Agreement
applicable to it.
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Originator, the
Master Servicer and the Depositor.
The Originator and the Master Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Originator or the Master Servicer, as the case may
be, 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 Originator, the Master Servicer
or the Depositor.
Any entity into which the Originator, the Master Servicer or
Depositor may be merged or consolidated, or any entity resulting from any
merger, conversion or consolidation to which the Originator, the Master Servicer
or the Depositor shall be a party, or any corporation succeeding to the business
of the Originator, the Master Servicer or the Depositor, shall be the successor
of the Originator, 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. Indemnification; Limitation on
Liability of the Master Servicer and
Others.
(a) The Master Servicer (except the Trustee if it is required
to succeed the Master Servicer hereunder) indemnifies and holds the Guarantor,
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 Guarantor, 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 Guarantor, 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 Guarantor, the
NIMS Insurer and/or the Certificateholder in respect of such claim. The
provisions of this Section 6.03 shall survive the termination of this Agreement
and the payment of the outstanding Certificates.
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(b) The Guarantor shall be indemnified by the Trust Fund for
any loss, liability or expense incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates.
(c) None of the Depositor, the Originator, the Master Servicer
or the Trustee or any of the directors or officers or employees or agents of the
Depositor, the Originator, the Master Servicer or the Trustee shall be under any
liability to the Trust or the Certificateholders or to one another for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; PROVIDED, HOWEVER, that
this provision shall not protect the Depositor, the Originator, the Master
Servicer or the Trustee or any such Person against any breach of warranties or
representations made herein, or against any specific liability imposed on the
Master Servicer for a breach of the servicing standard set forth in Section
3.01, or against any liability which would otherwise be imposed by reason of its
respective willful misfeasance, bad faith, fraud or negligence in the
performance of its duties or by reason of negligent disregard of its respective
obligations and duties hereunder. The preceding sentence shall not limit the
obligations of the Master Servicer pursuant to Section 8.05.
The Depositor, the Master Servicer, the Originator, the
Trustee and any director or officer or employee or agent of the Depositor, the
Master Servicer, the Originator or the Trustee may rely in good faith on any
document of any kind PRIMA FACIE properly executed and submitted by any
appropriate Person with respect to any matters arising hereunder. The Depositor,
the Master Servicer, the Originator, the Trustee and any director or officer or
employee or agent of the Depositor, the Master Servicer, the Originator, the
Trustee 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, fraud or negligence in the performance of duties
hereunder, a breach of a representation or warranty hereunder or (in the case of
the Master Servicer) a breach of the servicing standard set forth in Section
3.01, or by reason of its negligent disregard of obligations and duties
hereunder. The 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(a)(viii), 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.
SECTION 6.04. Master Servicer Not to Resign.
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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, the Guarantor and the NIMS Insurer in writing and such proposed
successor servicer is reasonably acceptable to the Trustee and the NIMS Insurer
or the Guarantor as provided in Section 1.04 and (b) each Rating Agency shall
have delivered a letter to the Trustee, the Guarantor 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 (without regard to the Guarantee of the Guarantor); PROVIDED,
HOWEVER, that no such resignation by the Master Servicer shall become effective
until such successor servicer or, in the case of (i) above, the Trustee shall
have assumed the Master Servicer's responsibilities and obligations hereunder or
the Trustee shall have designated, with the consent of the NIMS Insurer or the
Guarantor as provided in Section 1.04, 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, the Guarantor 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, the
Guarantor and the NIMS Insurer.
SECTION 6.05. Delegation of Duties.
In the ordinary course of business and only with the approval
of the Guarantor, 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; provided, however, that the Guarantor shall consult with the NIMS
Insurer, but the decision to approve such Person shall be in the Guarantor's
sole discretion. 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,
the Guarantor 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 Originator and Master Servicer shall afford the Trustee,
the Guarantor and the NIMS Insurer, upon reasonable advance notice, during
normal business hours, access to all records
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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, the
Guarantor 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. The Master Servicer also shall afford the
Guarantor and the NIMS Insurer, upon reasonable advance notice, during normal
business hours, the right to audit the Master Servicer's servicing practices.
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ARTICLE VII
DEFAULT
SECTION 7.01. Master Servicer Events of
Termination.
(a) If any one of the following events ("Master Servicer
Events of Termination") shall occur and be continuing:
(i) (A) The failure by the Master Servicer to make any
Advance; or (B) any other failure by the Master Servicer to deposit in
the Collection Account or Distribution Account any deposit required to
be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written
notice of such failure shall have been given to the Master Servicer by
the Trustee or to the Trustee by the Guarantor, 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 15
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 15 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 Guarantor, 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; or
(vi) The Master Servicer shall fail to maintain a net worth of
$20,000,000 or more;
(vii) The Master Servicer is no longer an approved servicer of
▇▇▇▇▇▇▇ Mac; or
(viii) The Master Servicer's failure to comply with its
reporting obligations under Section 4.04, if so provided in Section
4.09(d) and Section 4.10(b);
(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, at the direction of the
NIMS Insurer or the Guarantor as provided in Section 1.04, or may, with the
consent of the NIMS Insurer or the Guarantor as provided in Section 1.04,
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), (iv), (v), (vi), (vii) and (viii) above, the Trustee shall,
at the written direction of the NIMS Insurer or the Guarantor as provided in
Section 1.04 or the Holders of each Class of Regular Certificates evidencing
Percentage Interests aggregating not less than 51% (with the consent of the NIMS
Insurer or the Guarantor as provided in Section 1.04), 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 Guarantor, the NIMS Insurer, 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, the Guarantor or the NIMS Insurer) 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
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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 upon presentation of reasonable
documentation of such costs and expenses, and if such predecessor Master
Servicer defaults in its obligation to pay such costs and expenses, such costs
and expenses 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 as set forth in
Section 3.11).
(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, the Guarantor or the NIMS Insurer)
receives a notice of termination pursuant to Section 7.01 or 6.04, the Trustee
(or such other successor Master Servicer as is acceptable to the NIMS Insurer or
the Guarantor as provided in Section 1.04 and 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 or the Guarantor as provided in Section 1.04 (such
approval not to be unreasonably withheld), as evidenced by the prior written
consent of the NIMS Insurer or the Guarantor, as applicable, and will not result
in the qualification, reduction or withdrawal of the ratings assigned to the
Certificates (without regard to
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the Guarantee of the Guarantor) 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 Originator, the Trustee, the
Guarantor or the NIMS Insurer pursuant to Section 6.03), nor shall any successor
Master Servicer be liable for any acts or omissions of the predecessor Master
Servicer or for any breach by such Master Servicer of any of its representations
or warranties contained herein or in any related document or agreement. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. All
Servicing Transfer Costs shall be paid by the predecessor Master Servicer upon
presentation of reasonable documentation of such costs, and if such predecessor
Master Servicer defaults in its obligation to pay such costs, such costs shall
be paid by the successor Master Servicer or the Trustee (in which case the
successor Master Servicer or the Trustee, as applicable, shall be entitled to
reimbursement therefor from the assets of the Trust).
Notwithstanding the foregoing, the parties hereto acknowledge
that in the event of the termination of the Master Servicer pursuant to Section
7.01, the Special Sub-Servicer shall be appointed the successor Master Servicer
provided that at the time of the Master Servicer's termination hereunder (i) the
Special Sub-Servicer is an approved servicer of ▇▇▇▇▇▇▇ Mac, (ii) the Special
Sub-Servicer has at least RPS-2 and RSS-2 rankings by Fitch, (iii) the Special
Sub-Servicer has performed its duties and obligations under the Special
Sub-Servicing Agreement and (iv) any Event of Default Special Sub-Servicer Event
of Termination (as defined in the Special Sub-Servicing Agreement) has not
occurred and is not continuing.
(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 the
Guarantor, 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, on behalf of all
Certificateholders and with the consent of the NIMS Insurer or the Guarantor as
provided in Section 1.04, may 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 Guarantor or the NIMS Insurer as provided in
Section 1.04. Upon any waiver of a past default, such default shall cease to
exist and any Master Servicer Event of Termination arising therefrom
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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, the Guarantor 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 Guarantor, 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, the
Guarantor and 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.
SECTION 7.06. Rights of the Guarantor to Exercise
Rights of Class A-1
Certificateholders and the Class S-1
Certificateholders.
By accepting any ownership interest in its Certificate, each
Class A-1 Certificateholder and Class S-1 Certificateholder agrees that the
Guarantor shall be deemed to be the Certificateholder for all purposes (other
than with respect to payment on the Certificates) and shall have the right to
exercise all rights of the Class A-1 Certificateholders and the Class S-1
Certificateholders under this Agreement and under each Class A-1 Certificate and
Class S-1 Certificate without any further consent of the Class A-1
Certificateholders or the Class S-1 Certificateholders, including, without
limitation:
(a) the right to require the Originator to repurchase Mortgage
Loans pursuant to Section 2.03;
(b) the right to give notices of breach or to terminate the
rights and obligations of the Master Servicer as servicer pursuant to
Section 7.01 and to consent to or direct waivers of Master Servicer
defaults pursuant to Section 7.03;
(c) the right to direct the actions of the Trustee during the
continuance of a Master Servicer default pursuant to Sections 7.01 and
7.02;
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(d) the right to institute proceedings against the Master
Servicer pursuant to Section 7.01;
(e) the right to direct the Trustee to investigate certain
matters pursuant to Section 8.02;
(f) the right to remove the Trustee pursuant to Section 8.07;
(g) the right to direct foreclosures upon the failure of the
Master Servicer to do so in accordance with this Agreement; and
(h) all Voting Rights.
In addition, each Class A-1 Certificateholder and Class S-1
Certificateholder agrees that the rights specifically enumerated in this
Agreement may be exercised by such Certificateholders only with the prior
written consent of the Guarantor.
SECTION 7.07. Trustee to Act Solely with Consent
of the Guarantor.
The Trustee shall not, without the Guarantor's consent or
unless directed by the Guarantor, agree to any amendment pursuant to Article XI;
provided, however, that such consent shall not be unreasonably withheld. The
Guarantor may, in writing and in its sole discretion renounce all or any of its
rights under Section 7.06 or 7.07 or any requirement for the Guarantor's consent
for any period of time.
SECTION 7.08. Mortgage Loans, Trust Fund and
Accounts Held for Benefit of the
Guarantor.
The Trustee shall hold the Trust Fund and the Mortgage Files
for the benefit of the Certificateholders and the Guarantor and all references
in this Agreement and in the Certificates to the benefit of Holders of the
Certificates shall be deemed to include the Guarantor. The Trustee shall
cooperate in all reasonable respects with any reasonable request by the
Guarantor for action to preserve or enforce the Guarantor's rights or interests
under this Agreement and the Certificates unless, as stated in an Opinion of
Counsel addressed to the Trustee and the Guarantor, such action is adverse to
the interests of the Certificateholders or diminishes the rights of the
Certificateholders or imposes additional burdens or restrictions on the
Certificateholders.
The Master Servicer hereby acknowledges and agrees that it
shall service the Mortgage Loans for the benefit of the Certificateholders and
for the benefit of the Guarantor, and all references in this Agreement to the
benefit of or actions on behalf of the Certificateholders shall be deemed to
include the Guarantor.
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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, the Guarantor and the NIMS Insurer and will, at the
expense of the Originator, which expense shall be reasonable given the scope and
nature of the required action, take such further action as directed by the
Guarantor.
The Trustee's computer and other systems used in performing
its duties and obligations under this Agreement operate in a manner such that
(i) the Trustee can perform such duties and obligations in accordance with the
terms of this Agreement and (ii) the Trustee can operate its business in the
same manner as it is operating on the date hereof.
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;
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(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 Guarantor, the NIMS
Insurer or the Majority Certificateholders (with the consent of the
Guarantor, so long as no Guarantor Default exists and is continuing)
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising or omitting to
exercise any trust or power conferred upon the Trustee, under this
Agreement; and
(iv) the Trustee shall not be charged with knowledge of any
failure by the Master Servicer to comply with the obligations of the
Master Servicer referred to in clauses (i) and (ii) of Section 7.01(a)
unless a Responsible Officer of the Trustee at the Corporate Trust
Office obtains actual knowledge of such failure or the Trustee receives
written notice of such failure from the Master Servicer, the Guarantor,
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;
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(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 Guarantor, pursuant to the provisions of this
Agreement, unless such Certificateholders or the Guarantor, as
applicable, shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby; the right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of any such act;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) prior to the occurrence of a Master Servicer Event of
Termination and after the curing of all Master Servicer Events of
Termination which may have occurred, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
documents, unless requested in writing to do so by the Guarantor, the
NIMS Insurer or the Majority Certificateholders (with the consent of
the Guarantor, so long as no Guarantor Default exists and is
continuing); 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.
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SECTION 8.03. Trustee Not Liable for Certificates
or Mortgage Loans.
The recitals contained herein and in the Certificates (other
than the authentication of the Trustee on the Certificates) shall be taken as
the statements of the Depositor, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Master Servicer, or for the use or application of any
funds paid to the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Master Servicer. The Trustee
shall at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or
the perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to Certificateholders
under this Agreement, including, without limitation: the existence, condition
and ownership of any Mortgaged Property; the existence and enforceability of any
hazard insurance thereon (other than if the Trustee shall assume the duties of
the Master Servicer pursuant to Section 7.02); the validity of the assignment of
any Mortgage Loan to the Trustee or of any intervening assignment; the
completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan (other than if the Trustee shall assume the duties of the Master
Servicer pursuant to Section 7.02); the compliance by the Depositor, the
Originator, the Seller or the Master Servicer with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any non-compliance therewith or any breach
thereof; any investment of monies by or at the direction of the Master Servicer
or any loss resulting therefrom, it being understood that the Trustee shall
remain responsible for any Trust property that it may hold in its individual
capacity; the acts or omissions of any of the Master Servicer (other than if the
Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02), any Sub-Servicer or any Mortgagor; any action of the Master Servicer
(other than if the Trustee shall assume the duties of the Master Servicer
pursuant to Section 7.02), or any Sub- Servicer taken in the name of the
Trustee; the failure of the Master Servicer or any Sub-Servicer to act or
perform any duties required of it as agent of the Trustee hereunder; or any
action by the Trustee taken at the instruction of the Master Servicer (other
than if the Trustee shall assume the duties of the Master Servicer pursuant to
Section 7.02); PROVIDED, HOWEVER, that the foregoing shall not relieve the
Trustee of its obligation to perform its duties under this Agreement, including,
without limitation, the Trustee's duty to review the Mortgage Files pursuant to
Section 2.01. The Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder (unless the Trustee shall have become the successor Master
Servicer).
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Originator, the Master Servicer, the Guarantor, the NIMS Insurer, the Depositor
or their Affiliates.
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SECTION 8.05. Trustee Fee and Expenses.
The Trustee shall pay to itself the Trustee Fee in accordance
with Section 4.01(a) 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 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 pursuant to Section
3.11(b)(v).
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 ▇▇▇▇▇'▇, 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, the Guarantor
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.
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The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Guarantor, 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 Guarantor (after consultation with 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 (i) shall cease to be eligible in
accordance with the provisions of Section 8.06 or (ii) fails to comply with the
reporting obligations under Section 4.09(a), to the extent set forth in Section
4.09(c), and shall fail to resign after written request therefor by the
Depositor or the Guarantor or if at any time the Trustee shall be legally unable
to act, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Depositor, the Master
Servicer, the Guarantor or the NIMS Insurer may remove the Trustee. If the
Depositor, the Master Servicer, the Guarantor or the NIMS Insurer removes the
Trustee under the authority of the immediately preceding sentence, the
Depositor, with the consent of the Guarantor, 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;
provided that, in connection with the appointment of a successor Trustee under
this paragraph, the Guarantor shall consult with the NIMS Insurer, but the
decision to appoint a successor Trustee under this paragraph shall remain in the
Guarantor's sole discretion.
The Majority Certificateholders may, with the prior written
consent of the Guarantor, at any time remove the Trustee by written instrument
or instruments delivered to the Master Servicer and the Trustee; the Guarantor
shall thereupon use its best efforts to appoint a successor trustee in
accordance with this Section; provided, however, that in connection with the
removal of the Trustee and appointment of a successor Trustee pursuant to this
paragraph, the Guarantor shall consult with the NIMS Insurer, but the decision
to remove the Trustee and appoint a successor Trustee in accordance with this
paragraph shall remain in the Guarantor's sole discretion.
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.
Notwithstanding anything to the contrary contained herein the
Trustee may not be removed by the Depositor or the Certificateholders without
the prior written consent of the Guarantor, which consent shall not be
unreasonably withheld.
If the Trustee resigns or is removed, the Guarantor or the
NIMS Insurer may terminate any Custodian or Paying Agent; PROVIDED, HOWEVER,
that any such termination of any Custodian or Paying Agent shall not become
effective until a successor Trustee (or a successor
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Custodian or Paying Agent, as applicable, on its behalf) shall have assumed in
writing the duties of the terminated Custodian or Paying Agent, as applicable.
SECTION 8.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Guarantor, 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.
Notwithstanding anything to the contrary contained herein, the
appointment of any successor Trustee pursuant to any provision of this Agreement
will be subject to the prior written consent of the Guarantor, which consent
shall not be unreasonably withheld.
SECTION 8.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted
or with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or
Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust or any Mortgaged Property may at the time be
located, the Depositor and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee, the Guarantor 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
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to vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders and the Guarantor, 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, the Guarantor
and the NIMS Insurer. If the Master Servicer, the Guarantor 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 Guarantor and the NIMS Insurer, may at any time
accept the resignation of or remove any separate trustee or co-trustee
except that following the occurrence of a Master Servicer Event of
Termination, the Trustee acting alone may accept the resignation or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor, the Master Servicer, the Guarantor and the
NIMS Insurer.
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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 and the Guarantor
in respect of which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Originator, the
Depositor, the Master Servicer, the Guarantor, 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
Guarantor, 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, the Guarantor and such
Certificateholder and shall make available to the Seller, the Originator, the
Master Servicer, the Depositor, the Guarantor, the NIMS Insurer 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, the Guarantor 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
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of the Majority Certificateholders or the Guarantor, or may, with the consent of
the Guarantor, proceed to protect and enforce its rights and the rights of the
Certificateholders, the Guarantor 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 Guarantor, 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 of 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 Certificates 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 (at the
Trustee's own expense without right of reimbursement in consideration of the
compensation paid to the Trustee hereunder, including any additional
compensation accepted by the Trustee pursuant Section 5.02(d)(vi) under the
circumstances set forth in such subclause (vi)) (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 Trust REMIC, enter into settlement agreements with any government taxing
agency, extend any statute of
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limitations relating to any item of any Trust REMIC and otherwise act on behalf
of any Trust REMIC in relation to any tax matter involving the Trust, provided
that to the extent that such representation affects the Guarantor's obligations
hereunder, the Trustee agrees to consult with the Guarantor and accommodate the
Guarantor's reasonable requests.
(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 Trust REMIC 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 Guarantor, 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 Trust REMIC 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 Guarantor, 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 Trust REMIC, and no such Person shall take any such action or cause any
Trust REMIC to take any such action as to which the Trustee, the Guarantor, 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 Residual
Certificate fails to pay such taxes, if any, when imposed.
(h) The Trustee, as agent for the Tax Matters Person, shall,
for federal income tax purposes, maintain books and records with respect to each
REMIC created hereunder on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any
Trust REMIC created hereunder, except as expressly provided in this Agreement
with respect to eligible substitute mortgage loans.
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(j) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which any Trust REMIC will receive a fee or other
compensation for services.
(k) On or before April 15 of each calendar year beginning in
2003, the Master Servicer shall deliver to the Guarantor, 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 Trust REMIC 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 Trust 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, the Guarantor
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 Trust REMIC 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 Trust REMIC 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 Trust 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 (i) the negligent performance by the Master Servicer of its
duties and obligations set forth herein or (ii) a any state, local or franchise
taxes imposed upon the Trust Fund as a result of the location of the Master
Servicer or the Trustee, the Master Servicer shall indemnify the Guarantor, the
NIMS Insurer, the Trustee and the Trust Fund against any and all losses, claims,
damages, liabilities or expenses ("Losses") resulting from such negligence;
PROVIDED, HOWEVER, that the Master Servicer shall not be liable for any such
Losses attributable to the action or inaction of the Trustee, the Depositor or
the Holder of such Residual Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Residual
Certificate on which the Master Servicer has relied. The foregoing shall not be
deemed to limit or restrict the rights and remedies of the Holder of such
Residual Certificate now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event
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shall the Master Servicer have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent performance by the Master Servicer of its
duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates).
(b) In the event that any Trust 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 Guarantor, the
NIMS Insurer and the Trust Fund against any and all Losses resulting from such
negligence; PROVIDED, HOWEVER, that the Trustee shall not be liable for any such
Losses attributable to the action or inaction of the Master Servicer, the
Depositor or the Holder of such Residual Certificate, as applicable, nor for any
such Losses resulting from misinformation provided by the Holder of such
Residual Certificate on which the Trustee has relied. The foregoing shall not be
deemed to limit or restrict the rights and remedies of the Holder of such
Residual Certificate now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Trustee have any
liability (1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement, (2) for any Losses other than arising out of a
negligent performance by the Trustee of its duties and obligations set forth
herein, and (3) for any special or consequential damages to Certificateholders
(in addition to payment of principal and interest on the Certificates).
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ARTICLE X
TERMINATION
SECTION 10.01. Termination.
(a) The respective obligations and responsibilities of the
Originator, the Master Servicer, the Depositor, the Guarantor 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 later of (A) the
payment in full of all amounts owing to the Guarantor unless the Guarantor shall
otherwise consent and (B) 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 ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, 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 Amounts, 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 (i) 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, (ii) unreimbursed
Servicing Advances, Advances, any unpaid Servicing Fees allocable to such
Mortgage Loans and REO Properties, (iii) any accrued and unpaid Net WAC Rate
Carryover Amount and (iv) any amount owed to the Guarantor under this Agreement
in respect of the Guaranteed Certificates (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 and the delivery of an opinion of counsel in form and
substance acceptable to the Guarantor that such termination is a "Qualified
Liquidation", under Section 860F of the Code, of REMIC 1 and of each other
REMIC.
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The Terminator shall indemnify the Guarantor for any claims under this Agreement
due to the Terminator's exercise of such option. In addition, the Terminator
shall reimburse the Trustee for the Trustee's out-of-pocket costs and expenses
incurred by the Trustee in connection with the Terminator's exercise of such
option.
(b) Notice of any termination, specifying the Distribution
Date (which shall be a date that would otherwise be a Distribution Date) upon
which the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee upon the Trustee receiving notice of such date from the Master
Servicer or the NIMS Insurer, by letter to the Certificateholders, the Guarantor
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 terminated
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. With respect to the terminated Certificates, on the
final Distribution Date therefor, the Trustee will withdraw from the
Distribution Account and remit to the Guarantor the lesser of (x) the amount
available for distribution on such final Distribution Date, net of any portion
thereof necessary to pay Holders of the Guaranteed Certificates pursuant to
Section 4.01 and any amounts owing to the Trustee in respect of the Trustee Fee
(or any other amount payable or reimbursable to the Trustee pursuant to this
Agreement, including, but not limited to Section 7.02 and Section 8.05) and due
and unpaid Advances, Servicing Advances and Servicing Fees, (y) the unpaid
amounts due and owing to the Guarantor relating to the Guaranteed Certificates
pursuant to Sections 4.01, 4.09 and 4.10. By acceptance of the Residual
Certificates, the Holders of the Residual Certificates agree, in connection with
any termination hereunder, to assign and transfer any amounts in excess of the
par value of the Mortgage Loans, and to the extent received in respect of such
termination, to pay any such amounts to the Holders of the Class C Certificates.
(d) In the event that all Certificateholders shall not
surrender their Certificates for final payment and cancellation on or before
such final Distribution Date, the Trustee shall promptly following such date
cause all funds in the Distribution Account not distributed in final
distribution to Certificateholders to be withdrawn therefrom and credited to the
remaining Certificateholders by depositing such funds in a separate Servicing
Account for the benefit of such Certificateholders, and the Master Servicer (if
the Master Servicer has exercised its right to purchase the Mortgage Loans), the
NIMS Insurer (if the NIMS Insurer has exercised its right to purchase the
Mortgage Loans) or the Trustee (in any other case) shall give a second written
notice to the remaining Certificateholders, to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
nine months after the second notice all the terminated Certificates shall not
have been surrendered for cancellation, the Residual Certificateholder shall be
entitled to all unclaimed funds
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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 Residual 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 and the Guarantor 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 Trust REMIC to fail to qualify as a REMIC at any time that any Certificates
are outstanding:
(i) Within 90 days prior to the final Distribution Date, the
Master Servicer or the NIMS Insurer shall adopt and the Trustee shall
sign a plan of complete liquidation of each REMIC created hereunder
meeting the requirements of a "Qualified Liquidation" under Section
860F of the Code and any regulations thereunder;
(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; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited (A) to the Holders of the Class A Certificates,
the Mezzanine Certificates, the Class C Certificates and the Class P
Certificates, the Certificate Principal Balance thereof, plus (in the
case of the Class A Certificates and the Mezzanine Certificates) one
month's interest thereon at the Pass- Through Rate therefor, (B) to the
Holders of the Class S Certificates and the Class C Certificates one
month's interest on the Notional Amount thereof at the Pass-Through
Rate therefor and (C) to the Guarantor, all amounts owing to the
Guarantor under this Agreement, and the Terminated REMICs shall
terminate at such time.
(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 or upon the
written request of the Guarantor 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
Originator, the Depositor, the Master Servicer, the Guarantor and the Trustee
with the consent of the NIMS Insurer (which consent shall not be unreasonably
withheld) 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 that such action shall not, as evidenced by either (a) an Opinion of
Counsel delivered to the Trustee or (b) written notice to the Depositor, the
Master Servicer and the Trustee from the Rating Agencies that such action will
not result in the reduction or withdrawal of the rating of any outstanding Class
of Certificates (without regard to the Guarantee of the Guarantor) with respect
to which it is a Rating Agency, adversely affect in any material respect the
interests of any Certificateholder.
In addition, (i) this Agreement may be amended from time to
time by the Originator, the Depositor, the Master Servicer and the Trustee with
the consent of the Guarantor and the NIMS Insurer (which consent shall not be
unreasonably withheld) and (ii) the Master Servicer, the Guarantor and the NIMS
Insurer may from time to time consent to the amendment of this Agreement, in
each case with the consent of 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
received on Mortgage Loans which are required to be distributed 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 (the absence of adverse effect to be evidenced by either (i) an
Opinion of Counsel delivered to the Trustee and a written notice to the
Depositor, the Master Servicer, the Guarantor, the NIMS Insurer 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 (without
regard to the Guarantee of the Guarantor) or notes insured by the NIMS Insurer
(without regard to the insurance policy issued by the NIMS Insurer) with respect
to which it is a Rating Agency or (ii) written notice to the Depositor, the
Master Servicer, the Guarantor, the NIMS Insurer 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 (without regard to the Guarantee
of the Guarantor) or notes insured by the NIMS Insurer (without regard to the
insurance policy issued by the NIMS Insurer) with respect to which it is a
Rating Agency) in a manner, other than as described in (x), or (z) modify the
consents required by the immediately preceding clauses (x) and (y) without the
consent of the Holders of all Certificates 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
179
Counsel, delivered by (and at the expense of) the Person seeking such Amendment
and satisfactory to the NIMS Insurer and the Guarantor, to the effect that such
amendment will not result in the imposition of a tax on any Trust REMIC
constituting part of the Trust Fund pursuant to the REMIC Provisions or cause
any Trust REMIC 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 Guarantor, the NIMS Insurer and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment; instead it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section 11.01 that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement;
Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Trust, but only upon
direction of Certificateholders or the Guarantor 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
180
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 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, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇'▇▇▇▇▇, or such other address or telecopy number as may hereafter be
furnished to the Depositor, the Guarantor, the NIMS Insurer and the Trustee in
writing by the Master Servicer, (b) in the case of the Trustee,
181
▇▇▇▇▇ Fargo Bank Minnesota, National Association, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Option One Mortgage Loan Trust Series
2002-5, with a copy to ▇▇▇▇▇ Fargo Bank Minnesota, National Association, Sixth
and Marquette, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Option One Series
2002-5, or such other address or telecopy number as may hereafter be furnished
to the Depositor, the Guarantor, 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, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇'▇▇▇▇▇, or such other address or telecopy number as may be furnished to the
Master Servicer, the Guarantor, the NIMS Insurer and the Trustee in writing by
the Depositor, (d) in the case of the Guarantor, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Director, Mortgage Security
Operations--Funding and Investments, or such other address or telecopy number as
may be furnished to the Depositor, the Master Servicer, the NIMS Insurer and the
Trustee in writing by the Guarantor and (e) 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, the
Guarantor and the Trustee in writing by the NIMS Insurer. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Notice of any Master Servicer Default shall be given by telecopy and
by certified mail. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have duly been given when mailed,
whether or not the Certificateholder receives such notice. A copy of any notice
required to be telecopied hereunder shall also be mailed to the appropriate
party in the manner set forth above.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Article and Section References.
All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.
SECTION 11.08. Notice to the Rating Agencies, the
Guarantor 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, the Guarantor 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;
182
(ii) the occurrence of any Master Servicer Event of
Termination that has not been cured or waived;
(iii) the resignation or termination of the Master Servicer or
the Trustee;
(iv) the final payment to Holders of the Certificates of any
Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor Master Servicer
pursuant to Section 7.02 hereof, any event that would result in the
inability of the Trustee to make Advances.
(b) In addition, the Trustee shall promptly make available to
each Rating Agency copies of each Statement to Certificateholders described in
Section 4.03 hereof and the Master Servicer shall promptly furnish to each
Rating Agency copies of the following:
(i) each annual statement as to compliance described in
Section 3.20 hereof;
(ii) each annual independent public accountants' servicing
report described in Section 3.21 hereof; and
(iii) each notice delivered pursuant to Section 7.01(a) hereof
which relates to the fact that the Master Servicer has not
made an Advance.
Any such notice pursuant to this Section 11.08 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to
▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: MBS Monitoring/Option One Mortgage Loan Trust 2002-3, Fitch Ratings,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and Standard & Poor's Ratings
Services, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
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.
183
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders, the
Guarantor, the NIMS Insurer and the parties hereto and their successors
hereunder, any benefit or any legal or equitable right, remedy or claim under
this Agreement.
SECTION 11.12. Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by the Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by agent duly appointed in writing, and such action shall become
effective when such instrument or instruments are delivered to the Trustee and
the Master Servicer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "act" of
the Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee and the Trust, if made in the manner provided in this Section 11.11.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by any Certificateholder shall bind every future
Holder of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.
SECTION 11.13 No Petition.
The Depositor, Master Servicer and the Trustee, by entering
into this Agreement and each Certificateholder, by accepting a Certificate,
hereby covenant and agree that they will not at any time institute against the
Trust Fund, or join in any institution against the Trust Fund of, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations with respect to the Certificates or this
Agreement.
184
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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Secretary
OPTION ONE MORTGAGE CORPORATION,
as Originator and Master Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Secretary
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
FEDERAL HOME LOAN MORTGAGE
CORPORATION,
as Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of July, 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 July, 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 July, 2002 before me, a notary public in and for
said State, personally appeared________________, known to me to be
a________________ of ▇▇▇▇▇ 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
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of July, 2002 before me, a notary public in and for
said State, personally appeared________________, known to me to be
a________________ of the Federal Home Loan Mortgage Corporation, 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-1 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").
Certificate No. 1 Initial Certificate Principal Balance of this
Certificate ("Denomination"):
Class: A-1 $[__]
Initial Pass-Through Rate: Variable (As Original Class Certificate Principal Balance of
calculated in the Pooling and Servicing this Class:
Agreement) $[__]
Cut-off Date: July 1, 2002 Final Maturity Date: August 2032
First Distribution Date: August 26, 2002
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
Class A-1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust
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
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Originator, the Master Servicer, or the Trustee
referred to below or any of their respective affiliates.
This certifies that the Federal Home Loan Mortgage Corporation is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the Denomination of this 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 July 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage Corporation as master
servicer (the "Master Servicer"), the Federal Home Loan Mortgage Corporation, as
guarantor with respect to the Class A-1 Certificates and the Class S-1
Certificates (the "Guarantor") and ▇▇▇▇▇ 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. In the event of a conflict between this Certificate
and the Agreement, the Agreement controls.
Reference is hereby made to the further provisions of this 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.
* * *
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By____________________________________________
This is one of the Class A-1 Certificates
referenced in the within-mentioned Agreement
By________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Trustee
[Reverse of Class A-1 Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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 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, with the consent of the Guarantor and the NIMS Insurer, if any (which
consent shall not be unreasonably withheld), by the Depositor, the Originator,
the Master Servicer and the Trustee 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 (which
consent shall not be unreasonably withheld).
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 Certificate
Registrar, any Paying Agent and any agent of the Master Servicer, the Depositor,
the Guarantor, 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 of, and none
of the Master Servicer, the Trust, the Guarantor, the NIMS Insurer, if any, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
The Master Servicer or the NIMS Insurer, if any, may, at its option, on
the Optional Termination Date purchase, on such date, all of the outstanding
Mortgage Loans and REO Properties in the Mortgage Pool at a price equal to the
applicable Termination Price. The obligations and responsibilities created by
the Agreement will terminate upon notice to the Trustee upon the later (A) the
payment in full of all amounts owing to the Guarantor unless the Guarantor shall
otherwise consent and (B) the earliest of (i) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (ii) the optional purchase
by the Master Servicer or the NIMS Insurer, if any, of the Mortgage Loans and
(iii) the Distribution Date in August 2032. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
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.
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
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.
EXHIBIT A-2
FORM OF CLASS A-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.
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) July 1, 2002
First Distribution Date : _______
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $_______________
Original Class Certificate
Principal Balance of this
Class : $_______________
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : _________________
Class : A-2
Assumed Maturity Date : ________________
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
Class A-2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust
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
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Originator, the Master Servicer, or the Trustee
referred to below or any of their respective affiliates.
This certifies that the Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Denomination of this 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 July 1, 2002 (the "Agreement") among the
Depositor, Option One Mortgage Corporation as master servicer (the "Master
Servicer"), the Federal Home Loan Mortgage Corporation, as guarantor with
respect to the Class A-2 Certificates and the Class S-1 Certificates (the
"Guarantor") and ▇▇▇▇▇ 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. In the event of a conflict between this Certificate and the
Agreement, the Agreement controls.
Reference is hereby made to the further provisions of this 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.
* * *
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_____________________________________________
This is one of the Class A-2 Certificates
referenced in the within-mentioned Agreement
By____________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Trustee
[Reverse of Class A-2 Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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 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, with the consent of the Guarantor and the NIMS Insurer, if any (which
consent shall not be unreasonably withheld), by the Depositor, the Originator,
the Master Servicer and the Trustee 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 (which
consent shall not be unreasonably withheld).
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 Certificate
Registrar, any Paying Agent and any agent of the Master Servicer, the Depositor,
the Guarantor, 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 of, and none
of the Master Servicer, the Trust, the Guarantor, the NIMS Insurer, if any, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
The Master Servicer or the NIMS Insurer, if any, may, at its option, on
the Optional Termination Date purchase, on such date, all of the outstanding
Mortgage Loans and REO Properties in the Mortgage Pool at a price equal to the
applicable Termination Price. The obligations and responsibilities created by
the Agreement will terminate upon notice to the Trustee upon the later (A) the
payment in full of all amounts owing to the Guarantor unless the Guarantor shall
otherwise consent and (B) the earliest of (i) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (ii) the optional purchase
by the Master Servicer or the NIMS Insurer, if any, of the Mortgage Loans and
(iii) the Distribution Date in August 2032. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
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.
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
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.
EXHIBIT A-3
FORM OF CLASS S-1 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").
Certificate No. 1 Initial Notional Amount of this Certificate
("Denomination"):
Class: S-1 $[__]
Initial Pass-Through Rate: Variable (As Original Notional Amount of this Class:
calculated in the Pooling and Servicing $[__]
Agreement)
Cut-off Date: July 1, 2002 Final Maturity Date: August 2032
First Distribution Date: August 26, 2002
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
Class S-1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust
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 Seller, the Originator, the Master
Servicer, or the Trustee referred to below or any of their respective
affiliates.
This certifies that the Federal Home Loan Mortgage Corporation is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the Denomination of this 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 July 1, 2002 (the "Agreement") among
the Depositor, Option One Mortgage Corporation as master servicer (the "Master
Servicer"), the Federal Home Loan Mortgage Corporation, as guarantor with
respect to the Class A-2 Certificates and the Class S-1 Certificates (the
"Guarantor") and ▇▇▇▇▇ 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. In the event of a conflict between this Certificate and the
Agreement, the Agreement controls.
Reference is hereby made to the further provisions of this 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.
* * *
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_____________________________________________
This is one of the Class S-1 Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Trustee
[Reverse of Class S-1 Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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 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, with the consent of the Guarantor and the NIMS Insurer, if any (which
consent shall not be unreasonably withheld), by the Depositor, the Originator,
the Master Servicer and the Trustee 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 (which
consent shall not be unreasonably withheld).
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 Certificate
Registrar, any Paying Agent and any agent of the Master Servicer, the Depositor,
the Guarantor, 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 of, and none
of the Master Servicer, the Trust, the Guarantor, the NIMS Insurer, if any, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
The Master Servicer or the NIMS Insurer, if any, may, at its option, on
the Optional Termination Date purchase, on such date, all of the outstanding
Mortgage Loans and REO Properties in the Mortgage Pool at a price equal to the
applicable Termination Price. The obligations and responsibilities created by
the Agreement will terminate upon notice to the Trustee upon the later (A) the
payment in full of all amounts owing to the Guarantor unless the Guarantor shall
otherwise consent and (B) the earliest of (i) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (ii) the optional purchase
by the Master Servicer or the NIMS Insurer, if any, of the Mortgage Loans and
(iii) the Distribution Date in August 2032. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
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.
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
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.
EXHIBIT A-4
FORM OF CLASS S-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.
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 Initial Notional Amount of this Certificate
("Denomination"):
Class: S-2 $[__]
Initial Pass-Through Rate: Variable (As Original Notional Amount of this Class:
calculated in the Pooling and Servicing $[__]
Agreement)
Cut-off Date: July 1, 2002 Final Maturity Date: August 2032
First Distribution Date: August 26, 2002 CUSIP: [____]
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
Class S-2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust
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 Seller, the Originator, the Master
Servicer, or the Trustee referred to below or any of their respective
affiliates.
This certifies that the Federal Home Loan Mortgage Corporation is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the Denomination of this 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 July 1, 2002 (the "Agreement") among
the Depositor, Option One Mortgage Corporation as master servicer (the "Master
Servicer"), the Federal Home Loan Mortgage Corporation, as guarantor with
respect to the Class A-2 Certificates and the Class S-1 Certificates (the
"Guarantor") and ▇▇▇▇▇ 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. In the event of a conflict between this Certificate and the
Agreement, the Agreement controls.
Reference is hereby made to the further provisions of this 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.
* * *
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By____________________________________________
This is one of the Class S-2 Certificates
referenced in the within-mentioned Agreement
By____________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Trustee
[Reverse of Class S-2 Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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 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, with the consent of the Guarantor and the NIMS Insurer, if any (which
consent shall not be unreasonably withheld), by the Depositor, the Originator,
the Master Servicer and the Trustee 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 (which
consent shall not be unreasonably withheld).
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 Certificate
Registrar, any Paying Agent and any agent of the Master Servicer, the Depositor,
the Guarantor, 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 of, and none
of the Master Servicer, the Trust, the Guarantor, the NIMS Insurer, if any, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
The Master Servicer or the NIMS Insurer, if any, may, at its option, on
the Optional Termination Date purchase, on such date, all of the outstanding
Mortgage Loans and REO Properties in the Mortgage Pool at a price equal to the
applicable Termination Price. The obligations and responsibilities created by
the Agreement will terminate upon notice to the Trustee upon the later (A) the
payment in full of all amounts owing to the Guarantor unless the Guarantor shall
otherwise consent and (B) the earliest of (i) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (ii) the optional purchase
by the Master Servicer or the NIMS Insurer, if any, of the Mortgage Loans and
(iii) the Distribution Date in August 2032. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
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.
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
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.
EXHIBIT A-5
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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS S-1 CERTIFICATES AND THE CLASS S-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").
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) July 1, 2002
First Distribution Date : _______________
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $______________
Original Class Certificate
Principal Balance of this
Class : $______________
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : _______________
Class : M-1
Assumed Maturity Date : _______________
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
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 July 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage Corporation as master
servicer (the "Master Servicer"), the Federal Home Loan Mortgage Corporation, as
guarantor with respect to the Class A-1 Certificates and the Class S-1
Certificates (the "Guarantor") and ▇▇▇▇▇ 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 the Prohibited Transaction Exemption (the "Exemption") set forth in
the Agreement 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.
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.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ 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
▇▇▇▇▇ Fargo Bank Minnesota,
National Association,
as Trustee
[Reverse of Class M-1 Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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.
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 Amounts, 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 August 2032.
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.
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
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.
EXHIBIT A-6
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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS S-1 CERTIFICATES, THE CLASS S-2 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").
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) July 1, 2002
First Distribution Date : _____________________
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $____________________
Original Class Certificate
Principal Balance of this
Class : $____________________
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : ___________________
Class : M-2
Assumed Maturity Date : ___________________
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
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 July 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage Corporation as master
servicer (the "Master Servicer"), the Federal Home Loan Mortgage Corporation, as
guarantor with respect to the Class A-1 Certificates and the Class S-1
Certificates (the "Guarantor") and ▇▇▇▇▇ 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 the Prohibited Transaction Exemption (the "Exemption") set forth in
the Agreement 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.
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.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ 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
▇▇▇▇▇ Fargo Bank Minnesota,
National Association,
as Trustee
[Reverse of Class M-2 Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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.
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 Amounts, 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 August 2032.
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.
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
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.
EXHIBIT A-7
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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS S-1 CERTIFICATES, THE CLASS S-2 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").
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) April 1, 2002
First Distribution Date : ______________
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $_____________
Original Class Certificate
Principal Balance of this
Class : $_____________
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : ______________
Class : M-3
Assumed Maturity Date : ______________
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
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 July 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage Corporation as master
servicer (the "Master Servicer"), the Federal Home Loan Mortgage Corporation, as
guarantor with respect to the Class A-1 Certificates and the Class S-1
Certificates (the "Guarantor") and ▇▇▇▇▇ 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 the Prohibited Transaction Exemption (the "Exemption") set forth in
the Agreement 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.
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.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ 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
▇▇▇▇▇ Fargo Bank Minnesota,
National Association,
as Trustee
[Reverse of Class M-3 Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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.
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 Amounts, 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 August 2032.
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.
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
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.
EXHIBIT A-8
FORM OF CLASS M-4 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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS S-1 CERTIFICATES, THE CLASS S-2 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.
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) April 1, 2002
First Distribution Date : ______________
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $_____________
Original Class Certificate
Principal Balance of this
Class : $_____________
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : ______________
Class : M-4
Assumed Maturity Date : ______________
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
Class M-4
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-4 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-4
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-4 Certificate (obtained by
dividing the Denomination of this Class M-4 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 July 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage Corporation as master
servicer (the "Master Servicer"), the Federal Home Loan Mortgage Corporation, as
guarantor with respect to the Class A-1 Certificates and the Class S-1
Certificates (the "Guarantor") and ▇▇▇▇▇ 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-4 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-4 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 the Prohibited Transaction Exemption (the "Exemption") set forth in
the Agreement 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.
Reference is hereby made to the further provisions of this Class M-4
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-4 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.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By__________________________________________
This is one of the Class M-4 Certificates
referenced in the within-mentioned Agreement
By_____________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota,
National Association,
as Trustee
[Reverse of Class M-4 Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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.
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 Amounts, 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 August 2032.
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.
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
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.
EXHIBIT A-9
FORM OF CLASS B 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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS S-1 CERTIFICATES, THE CLASS S-2 CERTIFICATES, THE CLASS
M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES AND THE
CLASS M-4 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").
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) April 1, 2002
First Distribution Date : ______________
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $_____________
Original Class Certificate
Principal Balance of this
Class : $_____________
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : ______________
Class : B
Assumed Maturity Date : ______________
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
Class B
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 B
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class B
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 __________________________ is the registered owner
of the Percentage Interest evidenced by this Class B Certificate (obtained by
dividing the Denomination of this Class B 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 July 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage Corporation as master
servicer (the "Master Servicer"), the Federal Home Loan Mortgage Corporation, as
guarantor with respect to the Class A-1 Certificates and the Class S-1
Certificates (the "Guarantor") and ▇▇▇▇▇ 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 B Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class B 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 the Prohibited Transaction Exemption (the "Exemption") set forth in
the Agreement 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.
Reference is hereby made to the further provisions of this Class B
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 B 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.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By_________________________________________
This is one of the Class B Certificates
referenced in the within-mentioned Agreement
By___________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota,
National Association,
as Trustee
[Reverse of Class B Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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.
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 Amounts, 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 August 2032.
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.
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
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.
EXHIBIT A-10
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 MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH SECTION 5.02
OF THE POOLING AND SERVICING AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE OR ANY INTEREST
HEREIN WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND WHICH
IS IN ACCORDANCE WITH THE PROVISIONS OF 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.
Certificate No. 1 Initial Certificate Principal Balance of this
Certificate ("Denomination"):
Class: C $[__]
Initial Pass-Through Rate: Variable (As Original Class Certificate Principal Balance of
calculated in the Pooling and Servicing this Class:
Agreement) $[__]
Cut-off Date: July 1, 2002 Final Maturity Date: August 2032
First Distribution Date: August 26, 2002
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
Class C
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above- referenced Class with respect to the
Trust
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
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Originator, 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
(obtained by dividing the Denomination of this 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 July 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage Corporation as master
servicer (the "Master Servicer"), the Federal Home Loan Mortgage Corporation, as
guarantor with respect to the Class A-2 Certificates and the Class S-1
Certificates (the "Guarantor") and ▇▇▇▇▇ 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. In the event of a conflict between this Certificate
and the Agreement, the Agreement controls.
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
of 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.
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(b) of the Agreement.
Reference is hereby made to the further provisions of this 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.
* * *
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ 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
▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Trustee
[Reverse of Class C Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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 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, with the consent of the Guarantor and the NIMS Insurer, if any (which
consent shall not be unreasonably withheld), by the Depositor, the Originator,
the Master Servicer and the Trustee 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 (which
consent shall not be unreasonably withheld).
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 Certificate
Registrar, any Paying Agent and any agent of the Master Servicer, the Depositor,
the Guarantor, 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 of, and none
of the Master Servicer, the Trust, the Guarantor, the NIMS Insurer, if any, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
The Master Servicer or the NIMS Insurer, if any, may, at its option, on
the Optional Termination Date purchase, on such date, all of the outstanding
Mortgage Loans and REO Properties in the Mortgage Pool at a price equal to the
applicable Termination Price. The obligations and responsibilities created by
the Agreement will terminate upon notice to the Trustee upon the later (A) the
payment in full of all amounts owing to the Guarantor unless the Guarantor shall
otherwise consent and (B) the earliest of (i) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (ii) the optional purchase
by the Master Servicer or the NIMS Insurer, if any, of the Mortgage Loans and
(iii) the Distribution Date in August 2032. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
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.
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
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.
EXHIBIT A-11
FORM OF CLASS P 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 MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH SECTION 5.02
OF THE POOLING AND SERVICING AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE OR ANY INTEREST
HEREIN WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND WHICH
IS IN ACCORDANCE WITH THE PROVISIONS OF 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.
Certificate No. 1 Initial Certificate Principal Balance of this
Certificate ("Denomination"):
Class: P $100.00
Cut-off Date: July 1, 2002 Original Class Certificate Principal Balance of
this Class:
$100.00
First Distribution Date: August 26, 2002 Final Maturity Date: August 2032
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
Class P
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above- referenced Class with respect to the
Trust
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
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Originator, 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
(obtained by dividing the Denomination of this 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 July 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage Corporation as master
servicer (the "Master Servicer"), the Federal Home Loan Mortgage Corporation, as
guarantor with respect to the Class A-2 Certificates and the Class S-1
Certificates (the "Guarantor") and ▇▇▇▇▇ 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. In the event of a conflict between this Certificate
and the Agreement, the Agreement controls.
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
of 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.
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(b) of the Agreement.
Reference is hereby made to the further provisions of this 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.
* * *
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ 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
▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Trustee
[Reverse of Class P Certificate]
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates, Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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 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, with the consent of the Guarantor and the NIMS Insurer, if any (which
consent shall not be unreasonably withheld), by the Depositor, the Originator,
the Master Servicer and the Trustee 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 (which
consent shall not be unreasonably withheld).
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 Certificate
Registrar, any Paying Agent and any agent of the Master Servicer, the Depositor,
the Guarantor, 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 of, and none
of the Master Servicer, the Trust, the Guarantor, the NIMS Insurer, if any, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
The Master Servicer or the NIMS Insurer, if any, may, at its option, on
the Optional Termination Date purchase, on such date, all of the outstanding
Mortgage Loans and REO Properties in the Mortgage Pool at a price equal to the
applicable Termination Price. The obligations and responsibilities created by
the Agreement will terminate upon notice to the Trustee upon the later (A) the
payment in full of all amounts owing to the Guarantor unless the Guarantor shall
otherwise consent and (B) the earliest of (i) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (ii) the optional purchase
by the Master Servicer or the NIMS Insurer, if any, of the Mortgage Loans and
(iii) the Distribution Date in August 2032. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
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.
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
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.
EXHIBIT A-12
FORM OF CLASS R CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
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 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
Percentage Interest: 100.00%
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates, Series 2002-5
Class R
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above- referenced Class with respect to the
Trust
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 Seller, the Originator, 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
July 1, 2002 (the "Agreement") among the Depositor, Option One Mortgage
Corporation as master servicer (the "Master Servicer"), the Federal Home Loan
Mortgage Corporation, as guarantor with respect to the Class A-2 Certificates
and the Class S-1 Certificates (the "Guarantor") and ▇▇▇▇▇ 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. In the event of a conflict
between this Certificate and the Agreement, the Agreement controls.
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
of 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.
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(b) 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. The Trustee will, pursuant to the Agreement,
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 in this
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this 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.
* * *
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ 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
▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Trustee
[Reverse of Class R Certificate]
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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 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, with the consent of the Guarantor and the NIMS Insurer, if any (which
consent shall not be unreasonably withheld), by the Depositor, the Originator,
the Master Servicer and the Trustee 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 (which
consent shall not be unreasonably withheld).
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 Certificate
Registrar, any Paying Agent and any agent of the Master Servicer, the Depositor,
the Guarantor, 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 of, and none
of the Master Servicer, the Trust, the Guarantor, the NIMS Insurer, if any, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
The Master Servicer or the NIMS Insurer, if any, may, at its option, on
the Optional Termination Date purchase, on such date, all of the outstanding
Mortgage Loans and REO Properties in the Mortgage Pool at a price equal to the
applicable Termination Price. The obligations and responsibilities created by
the Agreement will terminate upon notice to the Trustee upon the later (A) the
payment in full of all amounts owing to the Guarantor unless the Guarantor shall
otherwise consent and (B) the earliest of (i) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (ii) the optional purchase
by the Master Servicer or the NIMS Insurer, if any, of the Mortgage Loans and
(iii) the Distribution Date in August 2032. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
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.
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
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.
EXHIBIT A-13
FORM OF CLASS R-X CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
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 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
Percentage Interest: 100.00%
OPTION ONE MORTGAGE LOAN TRUST 2002-5
Asset-Backed Certificates, Series 2002-5
Class R-X
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above- referenced Class with respect to the
Trust
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 Seller, the Originator, 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
July 1, 2002 (the "Agreement") among the Depositor, Option One Mortgage
Corporation as master servicer (the "Master Servicer"), the Federal Home Loan
Mortgage Corporation, as guarantor with respect to the Class A-2 Certificates
and the Class S-1 Certificates (the "Guarantor") and ▇▇▇▇▇ 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. In the event of a conflict
between this Certificate and the Agreement, the Agreement controls.
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
of 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.
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(b) 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. The Trustee will, pursuant to the Agreement,
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 in this
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this 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.
* * *
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: July __, 2002
OPTION ONE MORTGAGE LOAN TRUST 2002-5
By: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_____________________________________________
This is one of the Class R-X Certificates
referenced in the within-mentioned Agreement
By_________________________________________________
Authorized Signatory of
▇▇▇▇▇ Fargo Bank Minnesota,
National Association, as Trustee
[Reverse of Class R-X Certificate]
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates,
Series 2002-5
This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5 (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 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, with the consent of the Guarantor and the NIMS Insurer, if any (which
consent shall not be unreasonably withheld), by the Depositor, the Originator,
the Master Servicer and the Trustee 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 (which
consent shall not be unreasonably withheld).
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 Certificate
Registrar, any Paying Agent and any agent of the Master Servicer, the Depositor,
the Guarantor, 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 of, and none
of the Master Servicer, the Trust, the Guarantor, the NIMS Insurer, if any, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
The Master Servicer or the NIMS Insurer, if any, may, at its option, on
the Optional Termination Date purchase, on such date, all of the outstanding
Mortgage Loans and REO Properties in the Mortgage Pool at a price equal to the
applicable Termination Price. The obligations and responsibilities created by
the Agreement will terminate upon notice to the Trustee upon the later (A) the
payment in full of all amounts owing to the Guarantor unless the Guarantor shall
otherwise consent and (B) the earliest of (i) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (ii) the optional purchase
by the Master Servicer or the NIMS Insurer, if any, of the Mortgage Loans and
(iii) the Distribution Date in August 2032. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
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.
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
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.
EXHIBIT B
[Reserved]
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENTS
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 July 19, 2002
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates, Series 2002-5
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.........................................................................5
Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE ORIGINATOR...................5
Section 3.03 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER.......................7
Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES..................................8
ARTICLE IV.
ORIGINATOR'S COVENANTS
Section 4.01 COVENANTS OF THE ORIGINATOR................................................................10
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION.......................................................................10
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION...........................................................................12
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT.............................................................................12
Section 7.02 GOVERNING LAW.........................................................................12
ii
Section 7.03 NOTICES...............................................................................12
Section 7.04 SEVERABILITY OF PROVISIONS............................................................13
Section 7.05 COUNTERPARTS..........................................................................13
Section 7.06 FURTHER AGREEMENTS....................................................................13
Section 7.07 INTENTION OF THE PARTIES..............................................................13
Section 7.08 SUCCESSORS AND ASSIGNS: ASSIGNMENT OF PURCHASE AGREEMENT..............................13
Section 7.09 SURVIVAL..............................................................................14
Section 7.10 OWNER TRUSTEE.........................................................................14
iii
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of July 19, 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").
WITNESSETH
WHEREAS, the Seller is the owner of (i) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below, and 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 July 1, 2002 (the "Pooling and Servicing Agreement") among
the Purchaser as depositor, the Originator as originator and servicer, the
Federal Home Loan Mortgage Corporation, as guarantor of the Class A-1
Certificates and the Class S-1 Certificates and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association as trustee (the "Trustee"), the Purchaser will convey the
Mortgage Loans to Option One Mortgage Loan Trust 2002-5 (the "Trust"); and
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.
"ORIGINATOR INFORMATION": The information in the [Prospectus Supplement
as follows: under "SUMMARY OF TERMS--Mortgage Loans," the first sentence under
the fifth 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," "RISK FACTORS- Convertible Mortgage 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," 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, assign, set over, and otherwise convey to the
Purchaser, 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 or after the Cut-off Date and all collections in
respect of interest and principal due 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 in
respect of the Mortgage Loans and (iv) all proceeds of any of the foregoing.
(b) In connection with the transactions contemplated by Section 2.08 of
the Pooling and Servicing Agreement, the Seller hereby agrees that the Depositor
shall be under no obligation to purchase any Subsequent Mortgage Loans unless
(i) the conditions precedent contained in Section 2.08 of the Pooling and
Servicing Agreement and the Subsequent Transfer Instrument, substantially in the
form of Exhibit R thereto, are satisfied and (ii) each Subsequent Mortgage Loan
satisfies the representations and warranties contained in Section 3.01 of this
Agreement. The sale of Subsequent Mortgage Loans by the Seller to the Depositor
shall be effected in accordance with the terms of Section 2.08 of the Pooling
and Servicing Agreement pursuant to a Subsequent Mortgage Loan Purchase
Agreement substantially in the form of this Agreement.
Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE. In connection with
any transfer pursuant to Section 2.01 hereof, the Originator agrees, at its own
expense on or prior to the Closing Date, (i) 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 and (ii) to deliver to the Purchaser, the Guarantor
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,
(A) its account number and (B) the Cut-off Date Principal Balance. Such file,
which forms a part of Exhibit D to the Pooling and Servicing
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Agreement, shall also be marked as Schedule I to this Agreement and is hereby
incorporated into and made a part of this Agreement.
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:
(a) the original Mortgage Note, endorsed either (A) in blank or (B) in
the following form: "Pay to the order of ▇▇▇▇▇ 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;
(b) 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;
(c) an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank, without recourse,
or (B) to "▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Trustee, without
recourse";
(d) an original copy of any intervening assignment of Mortgage showing
a complete chain of assignments;
(e) the original or a certified copy of lender's title insurance
policy; and
(f) 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(b), (c) or (d)
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
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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 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(e) 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 90 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 in accordance with 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(c) hereof and, to the extent necessary, in Section 2.02(d) 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 Trustee, the Guarantor,
Rating Agencies and the NIMS Insurer, if any, 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
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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 (v)
and (vi) above) set forth in the preceding sentence or (b) upon the occurrence
of condition (v) or (vi) in the preceding sentence, the Originator shall be
required to deliver such Assignments for recording as provided above, promptly
and in any event within 30 days following receipt of such notice.
Notwithstanding the foregoing, if the Originator fails to pay the cost of
recording the Assignments, such expense will be paid by the Trustee and the
Trustee shall be reimbursed for such expenses by the Trust. 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 ▇▇▇▇▇ 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 $212,059,882.33 and (ii) a 44.84% percentage
interest in the Class C Certificates, the Class P Certificates, the Class R
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Certificates and the Class R-X 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 and the Information Circular 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 makes representations and warranties set
forth in Exhibit A to the Purchaser with respect to the Mortgage Loans as of the
Closing Date or as of such other date specifically provided herein.
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:
(a) 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;
(b) 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;
(c) 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;
(d) 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
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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;
(e) 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;
(f) 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;
(g) 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 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 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;
(i) 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;
(j) 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;
(k) 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 dependent 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
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(l) 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;
(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;
(t) The Seller has not transferred the Mortgage Loans to the Depositor
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
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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 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
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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 90 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 90 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, 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 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.
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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
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
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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.
(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
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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 under 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 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 Sections 5.01(a)
and (b) 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
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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, the Guarantor, the NIMs Insurer, if any, 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 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.
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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: (i) if to the Originator: Option One Mortgage Corporation, 3 ▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, or such other address as may
hereafter be furnished to the Purchaser and the Seller in writing by the
Originator; (ii) if to the Purchaser: Option One Mortgage Acceptance
Corporation, 3 ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, or such
other address as may hereafter be furnished to the Seller and the Originator in
writing by the Purchaser and (iii) if to the Seller: Option One Owner Trust
2001-1B, c/o Wilmington Trust Company, One ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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
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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
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 Originator, the Trustee, the Guarantor and the NIMs
Insurer, if any. The Guarantor and the NIMs Insurer, if any, shall be third
party beneficiaries 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 by the Originator or the Seller 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
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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.
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IN WITNESS WHEREOF, the Seller, the Purchaser and the Originator 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 first
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
[Available Upon Request]
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EXHIBIT A
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR REGARDING THE MORTGAGE LOANS.
The Originator represents and warrants to the Purchaser, as of the
Closing Date unless specifically stated otherwise in such representation and
warranty, as follows:
(i) No misrepresentation of a material fact or fraud in
respect of the origination, modification or amendment of any Mortgage
Loan has taken place on the part of any person, including, without
limitation, the related mortgagor, any appraiser, any builder or
developer or any party involved in the origination of such Mortgage
Loan;
(ii) As of the last calendar day of June 2002 and with respect
to any Initial Mortgage Loan that had a payment due on or before May 1,
2002, the Monthly Payment due on May 1, 2002 has been received. As of
the last calendar day of June 2002 and with respect to any Initial
Mortgage Loan that had a payment due on or before June 1, 2002, except
with respect to 0.05% of the Initial Mortgage Loans, by aggregate
Cut-off Date Principal Balance of the Initial Mortgage Loans, the
Monthly Payment due on June 1, 2002 has been received. In addition, (a)
0.09% of the Initial Mortgage Loans, by aggregate Cut-off Date
Principal Balance of the Initial Mortgage Loans have been 30 or more
days delinquent in the last 12 months and (b) none of the Initial
Mortgage Loans, by aggregate Cut-off Date Principal Balance of the
Initial Mortgage Loans have been 30 or more days delinquent for two
payment periods in the last 12 months;
(iii) Each Mortgage Loan, as of the Closing Date, is an
adjustable rate or fixed rate Mortgage Loan having an original term to
maturity from the date on which the first monthly payment is due of not
more than 30 years. Each Mortgage Note with respect to the Mortgage
Loans will provide for a schedule of substantially level and equal
Monthly Payments which are sufficient to amortize fully the principal
balance of such Mortgage Loan over a period of time equal to the
amortization period of such Mortgage Note; provided, however, that
certain Mortgage Loans constituting 0.66% of the Initial Mortgage
Loans, by aggregate Cut- off Date Principal Balance of the Initial
Mortgage Loans, are Balloon Mortgage Loans that provide for final
Monthly Payment substantially greater than the preceding Monthly
Payments. All such Balloon Mortgage Loans provide for Monthly Payments
based upon a 30 year amortization schedule with a final Balloon Payment
no later than the 15th year. None of the Initial Mortgage Loans, by
aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans,
are second lien Mortgage Loans;
(iv) No more than 37.64% and 12.32% of the Initial Mortgage
Loans, by aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans, had Loan-to-Value Ratios at origination exceeding 80%
and 90% respectively. All Mortgage Loans had Loan-to-Value Ratios at
origination of less than or equal to 100.00%;
(v) 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 or the Information Circular. Each Mortgage Loan
is
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currently being serviced by the Originator and has been serviced by
the Originator since the date of origination of such Mortgage Loan;
(vi) No Mortgage Loan is the subject of foreclosure
proceedings and, to the best of the Originator's knowledge, no obligor
of any of the Mortgage Loans has filed for bankruptcy protection;
(vii) As of the Cut-off Date, no more than 1.03% of the
Initial Mortgage Loans, by aggregate Cut-off Date Principal Balance of
the Initial Mortgage Loans, are secured by manufactured houses and none
of the Initial Mortgage Loans are secured by mobile homes;
(viii) Each Mortgage transferred to the Trustee is a valid
first or second lien on the Mortgaged Property subject only to (a) the
lien of current real property taxes and assessments, (b) covenants,
conditions and restriction, 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 in the appraisal made
in connection with the origination of the related mortgage loan, (c)
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 (d) in the case of a second lien, only
to a first lien on such Mortgaged Property;
(ix) There is no delinquent tax or assessment lien against any
Mortgaged Property;
(x) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage except those which
are insured against by the title insurance policy referred to in the
Pooling and Servicing Agreement;
(xi) Each Mortgage Loan at origination complied in all
material respects with applicable state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending and disclosure laws, and
consummation of the transactions contemplated hereby, including,
without limitation, the receipt of interest, will not involve the
violation of any such laws;
(xii) None of the Mortgage Loans are cooperative share
Mortgages;
(xiii) If the improvements securing a Mortgage Loan were in a
federally designated special flood hazard area as of the date of
origination, flood insurance in the amount described in the Pooling and
Servicing Agreement (and to the extent required by the Pooling and
Servicing Agreement) covers the related Mortgaged Property (either by
coverage under the federal flood insurance program or by coverage by
private insurers);
(xiv) A lender's policy of title insurance or a commitment
(binder) to issue the same or an attorney's certificate or opinion of
title was effective on the date of the origination of
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each Mortgage Loan and each such policy or certificate or opinion of
title is valid and remains in full force and effect;
(xv) [Reserved];
(xvi) Each appraisal of a Mortgage Loan that was used to
determine the appraised value of the related Mortgaged Property was
conducted generally in accordance with the Program(s) and included an
assessment of the fair market value of the related Mortgaged Property
at the time of the appraisal. The Mortgage File contains an appraisal
of the applicable Mortgaged Property;
(xvii) The information set forth on the Mortgage Loan Schedule
with respect to each Mortgage Loan is true and correct in all material
respects as of the Cut-off Date, unless another date is set forth in
the Mortgage Loan Schedule;
(xviii) Each Mortgage Loan constitutes a qualified mortgage
under Section 860G(a)(3)(A) of the Code and Treasury Regulations
Section 1.860G-2(a)(1) and (3);
(xix) Each Mortgage and Mortgage Note is the legal, valid and
binding obligation of the related Mortgagor and is enforceable by the
Trustee or any co-trustee appointed hereunder against the Mortgagor in
accordance with its terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by law, and all parties to each Mortgage Loan and the Mortgagor had
full legal capacity to execute all Mortgage Loan documents and to
convey the estate therein purported to be conveyed; and the Mortgage
and each Mortgage Note have been duly and validly executed by such
parties;
.. (xx) All individual insurance policies contain a standard mortgagee
clause naming the Originator, its successors and assigns, as mortgagee.
All premiums thereon have been paid. Each Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's
cost and expense, and upon 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;
(xxi) Any advances made after the date of origination of a
Mortgage Loan but prior to the Cut-off Date have been consolidated with
the outstanding principal amount secured by the related Mortgage, and
the secured principal amount, as consolidated, bears a single interest
rate and single repayment term reflected on the Mortgage Loan Schedule.
The consolidated principal amount does not exceed the original
principal amount of the related Mortgage Loan;
(xxii) There are no defaults in complying with the terms of
the Mortgage, and either (1) any taxes, governmental assessments,
insurance premiums, water, sewer and municipal changes or ground rents
which previously became due and owing have been paid or (2) an escrow
of funds has been established in an amount sufficient to pay for every
such item which remains unpaid and which has been assessed but is not
yet due and payable. Except
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for payments in the nature of Escrow Payments, including without
limitation, taxes and insurance payments, the Originator 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 by the Mortgage Note, except for
interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is greater, to the day
which precedes by one month the Due Date of the first installment of
principal and interest;
(xxiii) No improvement located on or being part of any
Mortgaged Property is in violation of any applicable zoning law or
regulation. All inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of each Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities and such Mortgaged Property is lawfully
occupied under the applicable law;
(xxiv) The proceeds of each Mortgage Loan have been fully
disbursed and there is no obligation on the part of the mortgagee to
make future advances thereunder and any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursement of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making closing or recording the
Mortgage Loans were paid and the Mortgagor is not entitled to any
refund of amounts paid or due under the Mortgage Note;
(xxv) There is no obligation on the part of the Originator or
any other party to make payments in addition to those made by the
Mortgagor;
(xxvi) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;
(xxvii) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and (ii) otherwise by
judicial or non-judicial foreclosure. There is no homestead or other
exemption available to the related Mortgagor which would materially
interfere with the right to sell the Mortgaged Property at a trustee's
sale or the right to foreclose the Mortgage subject to the applicable
federal and state laws and judicial precedent with respect to
bankruptcy and rights of redemption. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the
property;
(xxviii) All amounts received after the Cut-off Date with
respect to the Mortgage Loans to which the Originator is not entitled
will be deposited into the Collection Account within one Business Day
after the Closing Date;
23
(xxix) The Originator has not transferred the Mortgage Loans
to the Depositor, and the Depositor has not transferred the Mortgage
Loans to the Trust with any intent to hinder, delay or defraud any of
its creditors;
(xxx) All parties which have had any interest in the Mortgage
Loans, whether as originator, mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and disposed
of such interest, were): (A) organized under the laws of such state, or
(B) qualified to do business in such state, or (C) federal savings and
loan associations or national banks having principal offices in such
state, or (D) not doing business in such state so as to require
qualification or licensing, or (E) not otherwise required to be
licensed in such state. To the best of the Originator's knowledge, all
parties which have had any interest in the Mortgage Loans were in
compliance with any and all applicable licensing requirements of the
laws of the state wherein the Mortgaged Property is located or were not
required to be licensed in such state;
(xxxi) Each document or instrument in the related Mortgage
Files is in a form generally acceptable to prudent mortgage lenders
that regularly originate or purchase mortgage loans comparable to the
Mortgage Loans for sale to prudent investors in the secondary market
that invest in mortgage loans such as the Mortgage Loans;
(xxxii) Each Mortgaged Property is improved by a single (one-
to four-) family residential dwelling, including, without limitation,
condominiums, townhouses and manufactured homes. No Mortgaged Property
is improved by a mobile home. Each manufactured home constituting any
portion of any Mortgaged Property constitutes real property under
applicable state law; and each manufactured home constituting any
portion of any Mortgaged Property is a "single-family residence" as
defined in Section 25(e)(10) of the Code;
(xxxiii) 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;
(xxxiv) 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
24
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;
(xxxv) The improvements upon each Mortgaged Property are
covered by a valid and existing hazard insurance policy with a
generally acceptable carrier that provides for fire and extended
coverage representing coverage described in the Pooling and Servicing
Agreement;
(xxxvi) The terms of each Mortgage Note and related Mortgage
have not been impaired, altered or modified in any material respect,
except by a written instrument which has been recorded or is in the
process of being recorded, if necessary, to protect the interests of
the Certificateholders and which has been or will be delivered to the
Custodian on behalf of the Trustee;
(xxxvii) Each original Mortgage was recorded and all
subsequent Assignments (other than the Assignment to the Trustee) have
been recorded in the appropriate jurisdictions wherein such recordation
is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(xxxviii) There is no proceeding pending or, to the best of
the Originator's knowledge, threatened for the total or partial
condemnation of any Mortgaged Property, nor is such a proceeding
currently occurring, and such property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other
casualty, so as to affect adversely the value of the Mortgaged Property
as security for the Mortgage Loan or the use for which the premises
were intended;
(xxxix) No Mortgage Loan was originated under a buydown plan;
(xl) 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;
(xli) The Master Servicer has fully furnished, in accordance
with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on
its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company or their successors (the "Credit Repositories") on
a monthly basis;
(xlii) No proceeds from any Mortgage Loan were used to
purchase single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage Loan;
(xliii) No Mortgage Loan has a Prepayment Charge term longer
than five years after its origination;
(xliv) Except for Mortgage Loans that are delinquent for a
time period less than that set forth in (ii) above, there is no
default, breach, violation or event of acceleration existing
25
under any 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 default, breach, violation or event
of acceleration; and neither the Originator, the Seller, nor any other
entity involved in originating or servicing a Mortgage Loan, has waived
any default, breach, violation or event of acceleration;
(xlv) 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 or the Information
Circular;
(xlvi) Each Mortgage Loan was originated on or after March
2002.
(xlvii) None of the Mortgage Loans were originated while the
Borrower was in bankruptcy or if foreclosure proceedings had begun;
(xlviii) The Originator represents and warrants that the
Originator currently operates or actively participates in an on-going
business (A) to originate single family mortgage loans ("Loans"),
and/or (B) to make periodic purchases of Loans from originators or
sellers, and/or (C) to issue and/or purchase securities or bonds
supported by the Loans, a portion of which Loans are made to borrowers
who are:
(a) low-income families (families with incomes of 80% or less
of area median income) living in low-income areas (a census
tract or block numbering area in which the median income does
not exceed 80% of the area median income); or
(b) very low-income families (families with incomes of 60% or
less of area median income).
(xlix) Each Mortgage contains a provision for the acceleration
of the payment of the unpaid Principal Balance of the related Mortgage
Loan in the event the related Mortgaged Property is sold without the
prior consent of the mortgagee thereunder;
(l) With respect to each Mortgage Loan secured by a
manufactured home: (a) the manufactured home is permanently affixed to
a foundation which is suitable for the soil conditions of the site; (b)
all foundations, both perimeter and interior, have footings that are
located below the frost line; (c) any wheels, axles and trailer hitches
are removed from the manufactured home and (d) the Mortgage Loan is
covered under a standard real estate title insurance policy or
attorney's title opinion or certificate that identified the
manufactured home as part of the real property and insurers or
indemnifies against any loss if the manufactured home is determined not
to be part of the real property;
(li) 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;
26
(lii) No Mortgage Loan secured by a second priority lien has a
Principal Balance as of the applicable Cut-off Date in excess of half
of ▇▇▇▇▇▇▇ Mac's loan limits for such type of residence;
(liii) The pool of Mortgage Loans backing the Certificates
does not contain the first and second lien Mortgage Loans relating to a
single Mortgaged Property if the aggregate original Principal Balance
of such Mortgage Loans exceeds ▇▇▇▇▇▇▇ Mac's loan limits. To the best
of the Originator's knowledge, the pool of Mortgage Loans backing the
Certificates will not result in a violation of ▇▇▇▇▇▇▇ Mac's loan
limitations;
(liv) No Mortgage Loan has been previously rejected by ▇▇▇▇▇▇▇
Mac;
(lv) The Mortgage Loans were not intentionally selected by the
Seller in a manner intended to adversely affect the Purchaser or the
Trust;
(lvi) 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;
(lvii) No Mortgage Loan secured by a subordinate lien had an
original principal obligation in excess of 50 percent of ▇▇▇▇▇▇▇ Mac's
one-family residence mortgage amount limitation for first-lien
mortgages in effect as of the Cut-off Date;
(lviii) Each Mortgage Loan had an original principal balance
obligation that was not higher than the maximum principal balance for
Mortgage Loans that are eligible for purchase by ▇▇▇▇▇▇▇ Mac; and
(lix) To the best of Seller's knowledge and with respect to
each Mortgage Loan that is covered by mortgage insurance, the
improvement(s) located on or being part of any Mortgage Property were
constructed in accordance with the specifications set forth in the
original construction plans.
With respect to any representation that is made to the best of the
Originator's knowledge or as to which the Originator has no knowledge, if it is
discovered by the Originator, the Guarantor or the Trustee that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan 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 or warranty.
27
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 July 19, 2002
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates, Series 2002-5
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.........................................................................5
Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE ORIGINATOR...................5
Section 3.03 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER.......................7
Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES..................................8
ARTICLE IV.
ORIGINATOR'S COVENANTS
Section 4.01 COVENANTS OF THE ORIGINATOR................................................................10
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION.......................................................................10
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION...........................................................................12
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT.............................................................................12
Section 7.02 GOVERNING LAW.........................................................................12
ii
Section 7.03 NOTICES...............................................................................12
Section 7.04 SEVERABILITY OF PROVISIONS............................................................13
Section 7.05 COUNTERPARTS..........................................................................13
Section 7.06 FURTHER AGREEMENTS....................................................................13
Section 7.07 INTENTION OF THE PARTIES..............................................................13
Section 7.08 SUCCESSORS AND ASSIGNS: ASSIGNMENT OF PURCHASE AGREEMENT..............................13
Section 7.09 SURVIVAL..............................................................................14
Section 7.10 OWNER TRUSTEE.........................................................................14
iii
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of July 19, 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").
WITNESSETH
WHEREAS, the Seller is the owner of (i) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below, and 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 July 1, 2002 (the "Pooling and Servicing Agreement") among
the Purchaser as depositor, the Originator as originator and servicer, the
Federal Home Loan Mortgage Corporation, as guarantor of the Class A-1
Certificates and the Class S-1 Certificates and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association as trustee (the "Trustee"), the Purchaser will convey the
Mortgage Loans to Option One Mortgage Loan Trust 2002-5 (the "Trust"); and
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.
"ORIGINATOR INFORMATION": The information in the [Prospectus Supplement
as follows: under "SUMMARY OF TERMS--Mortgage Loans," the first sentence under
the fifth 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," "RISK FACTORS- Convertible Mortgage 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," 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, assign, set over, and otherwise convey to the
Purchaser, 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 or after the Cut-off Date and all collections in
respect of interest and principal due 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 in
respect of the Mortgage Loans and (iv) all proceeds of any of the foregoing.
(b) In connection with the transactions contemplated by Section 2.08 of
the Pooling and Servicing Agreement, the Seller hereby agrees that the Depositor
shall be under no obligation to purchase any Subsequent Mortgage Loans unless
(i) the conditions precedent contained in Section 2.08 of the Pooling and
Servicing Agreement and the Subsequent Transfer Instrument, substantially in the
form of Exhibit R thereto, are satisfied and (ii) each Subsequent Mortgage Loan
satisfies the representations and warranties contained in Section 3.01 of this
Agreement. The sale of Subsequent Mortgage Loans by the Seller to the Depositor
shall be effected in accordance with the terms of Section 2.08 of the Pooling
and Servicing Agreement pursuant to a Subsequent Mortgage Loan Purchase
Agreement substantially in the form of this Agreement.
Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE. In connection with
any transfer pursuant to Section 2.01 hereof, the Originator agrees, at its own
expense on or prior to the Closing Date, (i) 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 and (ii) to deliver to the Purchaser, the Guarantor
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,
(A) its account number and (B) the Cut-off Date Principal Balance. Such file,
which forms a part of Exhibit D to the Pooling and Servicing
2
Agreement, shall also be marked as Schedule I to this Agreement and is hereby
incorporated into and made a part of this Agreement.
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:
(a) the original Mortgage Note, endorsed either (A) in blank or (B) in
the following form: "Pay to the order of ▇▇▇▇▇ 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;
(b) 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;
(c) an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank, without recourse,
or (B) to "▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Trustee, without
recourse";
(d) an original copy of any intervening assignment of Mortgage showing
a complete chain of assignments;
(e) the original or a certified copy of lender's title insurance
policy; and
(f) 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(b), (c) or (d)
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
3
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 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(e) 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 90 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 in accordance with 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(c) hereof and, to the extent necessary, in Section 2.02(d) 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 Trustee, the Guarantor,
Rating Agencies and the NIMS Insurer, if any, 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
4
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 (v)
and (vi) above) set forth in the preceding sentence or (b) upon the occurrence
of condition (v) or (vi) in the preceding sentence, the Originator shall be
required to deliver such Assignments for recording as provided above, promptly
and in any event within 30 days following receipt of such notice.
Notwithstanding the foregoing, if the Originator fails to pay the cost of
recording the Assignments, such expense will be paid by the Trustee and the
Trustee shall be reimbursed for such expenses by the Trust. 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 ▇▇▇▇▇ 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 $105,012,858.14 and (ii) a 22.20% percentage
interest in the Class C Certificates, the Class P Certificates, the Class R
5
Certificates and the Class R-X 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 and the Information Circular 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 makes representations and warranties set
forth in Exhibit A to the Purchaser with respect to the Mortgage Loans as of the
Closing Date or as of such other date specifically provided herein.
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:
(a) 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;
(b) 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;
(c) 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;
(d) 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
6
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;
(e) 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;
(f) 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;
(g) 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 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 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;
(i) 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;
(j) 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;
(k) 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 dependent 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
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(l) 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;
(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;
(t) The Seller has not transferred the Mortgage Loans to the Depositor
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
8
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 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
9
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 90 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 90 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, 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 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.
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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
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
11
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.
(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
12
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 under 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 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 Sections 5.01(a)
and (b) 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
13
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, the Guarantor, the NIMs Insurer, if any, 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 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.
14
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: (i) if to the Originator: Option One Mortgage Corporation, 3 ▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, or such other address as may
hereafter be furnished to the Purchaser and the Seller in writing by the
Originator; (ii) if to the Purchaser: Option One Mortgage Acceptance
Corporation, 3 ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, or such
other address as may hereafter be furnished to the Seller and the Originator in
writing by the Purchaser and (iii) if to the Seller: Option One Owner Trust
2001-2, c/o Wilmington Trust Company, One ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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
15
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
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 Originator, the Trustee, the Guarantor and the NIMs
Insurer, if any. The Guarantor and the NIMs Insurer, if any, shall be third
party beneficiaries 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 by the Originator or the Seller 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
16
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.
17
IN WITNESS WHEREOF, the Seller, the Purchaser and the Originator 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 first
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
[Available Upon Request]
19
EXHIBIT A
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR REGARDING THE MORTGAGE LOANS.
The Originator represents and warrants to the Purchaser, as of the
Closing Date unless specifically stated otherwise in such representation and
warranty, as follows:
(i) No misrepresentation of a material fact or fraud in
respect of the origination, modification or amendment of any Mortgage
Loan has taken place on the part of any person, including, without
limitation, the related mortgagor, any appraiser, any builder or
developer or any party involved in the origination of such Mortgage
Loan;
(ii) As of the last calendar day of June 2002 and with respect
to any Initial Mortgage Loan that had a payment due on or before May 1,
2002, the Monthly Payment due on May 1, 2002 has been received. As of
the last calendar day of June 2002 and with respect to any Initial
Mortgage Loan that had a payment due on or before June 1, 2002, except
with respect to 0.68% of the Initial Mortgage Loans, by aggregate
Cut-off Date Principal Balance of the Initial Mortgage Loans, the
Monthly Payment due on June 1, 2002 has been received. In addition, (a)
0.62% of the Initial Mortgage Loans, by aggregate Cut-off Date
Principal Balance of the Initial Mortgage Loans have been 30 or more
days delinquent in the last 12 months and (b) none of the Initial
Mortgage Loans, by aggregate Cut-off Date Principal Balance of the
Initial Mortgage Loans have been 30 or more days delinquent for two
payment periods in the last 12 months;
(iii) Each Mortgage Loan, as of the Closing Date, is an
adjustable rate or fixed rate Mortgage Loan having an original term to
maturity from the date on which the first monthly payment is due of not
more than 30 years. Each Mortgage Note with respect to the Mortgage
Loans will provide for a schedule of substantially level and equal
Monthly Payments which are sufficient to amortize fully the principal
balance of such Mortgage Loan over a period of time equal to the
amortization period of such Mortgage Note; provided, however, that
certain Mortgage Loans constituting 2.40% of the Initial Mortgage
Loans, by aggregate Cut- off Date Principal Balance of the Initial
Mortgage Loans, are Balloon Mortgage Loans that provide for final
Monthly Payment substantially greater than the preceding Monthly
Payments. All such Balloon Mortgage Loans provide for Monthly Payments
based upon a 30 year amortization schedule with a final Balloon Payment
no later than the 15th year. None of the Initial Mortgage Loans, by
aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans,
are second lien Mortgage Loans;
(iv) No more than 33.34% and 9.93% of the Initial Mortgage
Loans, by aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans, had Loan-to-Value Ratios at origination exceeding 80%
and 90% respectively. All Mortgage Loans had Loan-to-Value Ratios at
origination of less than or equal to 100.00%;
(v) 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 or the Information Circular. Each Mortgage Loan
is
20
currently being serviced by the Originator and has been serviced by
the Originator since the date of origination of such Mortgage Loan;
(vi) No Mortgage Loan is the subject of foreclosure
proceedings and, to the best of the Originator's knowledge, no obligor
of any of the Mortgage Loans has filed for bankruptcy protection;
(vii) As of the Cut-off Date, no more than 0.61% of the
Initial Mortgage Loans, by aggregate Cut-off Date Principal Balance of
the Initial Mortgage Loans, are secured by manufactured houses and none
of the Initial Mortgage Loans are secured by mobile homes;
(viii) Each Mortgage transferred to the Trustee is a valid
first or second lien on the Mortgaged Property subject only to (a) the
lien of current real property taxes and assessments, (b) covenants,
conditions and restriction, 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 in the appraisal made
in connection with the origination of the related mortgage loan, (c)
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 (d) in the case of a second lien, only
to a first lien on such Mortgaged Property;
(ix) There is no delinquent tax or assessment lien against any
Mortgaged Property;
(x) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage except those which
are insured against by the title insurance policy referred to in the
Pooling and Servicing Agreement;
(xi) Each Mortgage Loan at origination complied in all
material respects with applicable state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending and disclosure laws, and
consummation of the transactions contemplated hereby, including,
without limitation, the receipt of interest, will not involve the
violation of any such laws;
(xii) None of the Mortgage Loans are cooperative share
Mortgages;
(xiii) If the improvements securing a Mortgage Loan were in a
federally designated special flood hazard area as of the date of
origination, flood insurance in the amount described in the Pooling and
Servicing Agreement (and to the extent required by the Pooling and
Servicing Agreement) covers the related Mortgaged Property (either by
coverage under the federal flood insurance program or by coverage by
private insurers);
(xiv) A lender's policy of title insurance or a commitment
(binder) to issue the same or an attorney's certificate or opinion of
title was effective on the date of the origination of
21
each Mortgage Loan and each such policy or certificate or opinion of
title is valid and remains in full force and effect;
(xv) [Reserved];
(xvi) Each appraisal of a Mortgage Loan that was used to
determine the appraised value of the related Mortgaged Property was
conducted generally in accordance with the Program(s) and included an
assessment of the fair market value of the related Mortgaged Property
at the time of the appraisal. The Mortgage File contains an appraisal
of the applicable Mortgaged Property;
(xvii) The information set forth on the Mortgage Loan Schedule
with respect to each Mortgage Loan is true and correct in all material
respects as of the Cut-off Date, unless another date is set forth in
the Mortgage Loan Schedule;
(xviii) Each Mortgage Loan constitutes a qualified mortgage
under Section 860G(a)(3)(A) of the Code and Treasury Regulations
Section 1.860G-2(a)(1) and (3);
(xix) Each Mortgage and Mortgage Note is the legal, valid and
binding obligation of the related Mortgagor and is enforceable by the
Trustee or any co-trustee appointed hereunder against the Mortgagor in
accordance with its terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by law, and all parties to each Mortgage Loan and the Mortgagor had
full legal capacity to execute all Mortgage Loan documents and to
convey the estate therein purported to be conveyed; and the Mortgage
and each Mortgage Note have been duly and validly executed by such
parties;
.. (xx) All individual insurance policies contain a standard mortgagee
clause naming the Originator, its successors and assigns, as mortgagee.
All premiums thereon have been paid. Each Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's
cost and expense, and upon 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;
(xxi) Any advances made after the date of origination of a
Mortgage Loan but prior to the Cut-off Date have been consolidated with
the outstanding principal amount secured by the related Mortgage, and
the secured principal amount, as consolidated, bears a single interest
rate and single repayment term reflected on the Mortgage Loan Schedule.
The consolidated principal amount does not exceed the original
principal amount of the related Mortgage Loan;
(xxii) There are no defaults in complying with the terms of
the Mortgage, and either (1) any taxes, governmental assessments,
insurance premiums, water, sewer and municipal changes or ground rents
which previously became due and owing have been paid or (2) an escrow
of funds has been established in an amount sufficient to pay for every
such item which remains unpaid and which has been assessed but is not
yet due and payable. Except
22
for payments in the nature of Escrow Payments, including without
limitation, taxes and insurance payments, the Originator 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 by the Mortgage Note, except for
interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is greater, to the day
which precedes by one month the Due Date of the first installment of
principal and interest;
(xxiii) No improvement located on or being part of any
Mortgaged Property is in violation of any applicable zoning law or
regulation. All inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of each Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities and such Mortgaged Property is lawfully
occupied under the applicable law;
(xxiv) The proceeds of each Mortgage Loan have been fully
disbursed and there is no obligation on the part of the mortgagee to
make future advances thereunder and any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursement of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making closing or recording the
Mortgage Loans were paid and the Mortgagor is not entitled to any
refund of amounts paid or due under the Mortgage Note;
(xxv) There is no obligation on the part of the Originator or
any other party to make payments in addition to those made by the
Mortgagor;
(xxvi) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;
(xxvii) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and (ii) otherwise by
judicial or non-judicial foreclosure. There is no homestead or other
exemption available to the related Mortgagor which would materially
interfere with the right to sell the Mortgaged Property at a trustee's
sale or the right to foreclose the Mortgage subject to the applicable
federal and state laws and judicial precedent with respect to
bankruptcy and rights of redemption. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the
property;
(xxviii) All amounts received after the Cut-off Date with
respect to the Mortgage Loans to which the Originator is not entitled
will be deposited into the Collection Account within one Business Day
after the Closing Date;
23
(xxix) The Originator has not transferred the Mortgage Loans
to the Depositor, and the Depositor has not transferred the Mortgage
Loans to the Trust with any intent to hinder, delay or defraud any of
its creditors;
(xxx) All parties which have had any interest in the Mortgage
Loans, whether as originator, mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and disposed
of such interest, were): (A) organized under the laws of such state, or
(B) qualified to do business in such state, or (C) federal savings and
loan associations or national banks having principal offices in such
state, or (D) not doing business in such state so as to require
qualification or licensing, or (E) not otherwise required to be
licensed in such state. To the best of the Originator's knowledge, all
parties which have had any interest in the Mortgage Loans were in
compliance with any and all applicable licensing requirements of the
laws of the state wherein the Mortgaged Property is located or were not
required to be licensed in such state;
(xxxi) Each document or instrument in the related Mortgage
Files is in a form generally acceptable to prudent mortgage lenders
that regularly originate or purchase mortgage loans comparable to the
Mortgage Loans for sale to prudent investors in the secondary market
that invest in mortgage loans such as the Mortgage Loans;
(xxxii) Each Mortgaged Property is improved by a single (one-
to four-) family residential dwelling, including, without limitation,
condominiums, townhouses and manufactured homes. No Mortgaged Property
is improved by a mobile home. Each manufactured home constituting any
portion of any Mortgaged Property constitutes real property under
applicable state law; and each manufactured home constituting any
portion of any Mortgaged Property is a "single-family residence" as
defined in Section 25(e)(10) of the Code;
(xxxiii) 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;
(xxxiv) 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
24
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;
(xxxv) The improvements upon each Mortgaged Property are
covered by a valid and existing hazard insurance policy with a
generally acceptable carrier that provides for fire and extended
coverage representing coverage described in the Pooling and Servicing
Agreement;
(xxxvi) The terms of each Mortgage Note and related Mortgage
have not been impaired, altered or modified in any material respect,
except by a written instrument which has been recorded or is in the
process of being recorded, if necessary, to protect the interests of
the Certificateholders and which has been or will be delivered to the
Custodian on behalf of the Trustee;
(xxxvii) Each original Mortgage was recorded and all
subsequent Assignments (other than the Assignment to the Trustee) have
been recorded in the appropriate jurisdictions wherein such recordation
is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(xxxviii) There is no proceeding pending or, to the best of
the Originator's knowledge, threatened for the total or partial
condemnation of any Mortgaged Property, nor is such a proceeding
currently occurring, and such property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other
casualty, so as to affect adversely the value of the Mortgaged Property
as security for the Mortgage Loan or the use for which the premises
were intended;
(xxxix) No Mortgage Loan was originated under a buydown plan;
(xl) 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;
(xli) The Master Servicer has fully furnished, in accordance
with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on
its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company or their successors (the "Credit Repositories") on
a monthly basis;
(xlii) No proceeds from any Mortgage Loan were used to
purchase single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage Loan;
(xliii) No Mortgage Loan has a Prepayment Charge term longer
than five years after its origination;
(xliv) Except for Mortgage Loans that are delinquent for a
time period less than that set forth in (ii) above, there is no
default, breach, violation or event of acceleration existing
25
under any 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 default, breach, violation or event
of acceleration; and neither the Originator, the Seller, nor any other
entity involved in originating or servicing a Mortgage Loan, has waived
any default, breach, violation or event of acceleration;
(xlv) 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 or the Information
Circular;
(xlvi) Each Mortgage Loan was originated on or after February
2002;
(xlvii) None of the Mortgage Loans were originated while the
Borrower was in bankruptcy or if foreclosure proceedings had begun;
(xlviii) The Originator represents and warrants that the
Originator currently operates or actively participates in an on-going
business (A) to originate single family mortgage loans ("Loans"),
and/or (B) to make periodic purchases of Loans from originators or
sellers, and/or (C) to issue and/or purchase securities or bonds
supported by the Loans, a portion of which Loans are made to borrowers
who are:
(a) low-income families (families with incomes of 80% or less
of area median income) living in low-income areas (a census
tract or block numbering area in which the median income does
not exceed 80% of the area median income); or
(b) very low-income families (families with incomes of 60% or
less of area median income).
(xlix) Each Mortgage contains a provision for the acceleration
of the payment of the unpaid Principal Balance of the related Mortgage
Loan in the event the related Mortgaged Property is sold without the
prior consent of the mortgagee thereunder;
(l) With respect to each Mortgage Loan secured by a
manufactured home: (a) the manufactured home is permanently affixed to
a foundation which is suitable for the soil conditions of the site; (b)
all foundations, both perimeter and interior, have footings that are
located below the frost line; (c) any wheels, axles and trailer hitches
are removed from the manufactured home and (d) the Mortgage Loan is
covered under a standard real estate title insurance policy or
attorney's title opinion or certificate that identified the
manufactured home as part of the real property and insurers or
indemnifies against any loss if the manufactured home is determined not
to be part of the real property;
(li) 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;
26
(lii) No Mortgage Loan secured by a second priority lien has a
Principal Balance as of the applicable Cut-off Date in excess of half
of ▇▇▇▇▇▇▇ Mac's loan limits for such type of residence;
(liii) The pool of Mortgage Loans backing the Certificates
does not contain the first and second lien Mortgage Loans relating to a
single Mortgaged Property if the aggregate original Principal Balance
of such Mortgage Loans exceeds ▇▇▇▇▇▇▇ Mac's loan limits. To the best
of the Originator's knowledge, the pool of Mortgage Loans backing the
Certificates will not result in a violation of ▇▇▇▇▇▇▇ Mac's loan
limitations;
(liv) No Mortgage Loan has been previously rejected by ▇▇▇▇▇▇▇
Mac;
(lv) The Mortgage Loans were not intentionally selected by the
Seller in a manner intended to adversely affect the Purchaser or the
Trust;
(lvi) 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;
(lvii) No Mortgage Loan secured by a subordinate lien had an
original principal obligation in excess of 50 percent of ▇▇▇▇▇▇▇ Mac's
one-family residence mortgage amount limitation for first-lien
mortgages in effect as of the Cut-off Date;
(lviii) Each Mortgage Loan had an original principal balance
obligation that was not higher than the maximum principal balance for
Mortgage Loans that are eligible for purchase by ▇▇▇▇▇▇▇ Mac; and
(lix) To the best of Seller's knowledge and with respect to
each Mortgage Loan that is covered by mortgage insurance, the
improvement(s) located on or being part of any Mortgage Property were
constructed in accordance with the specifications set forth in the
original construction plans.
With respect to any representation that is made to the best of the
Originator's knowledge or as to which the Originator has no knowledge, if it is
discovered by the Originator, the Guarantor or the Trustee that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan 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 or warranty.
27
OPTION ONE MORTGAGE CORPORATION,
as Originator
OPTION ONE OWNER TRUST 2002-3,
as Seller
and
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
as Purchaser
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of July 19, 2002
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates, Series 2002-5
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.........................................................................5
Section 3.02 Originator Representations and Warranties Relating to the Originator...................5
Section 3.03 Originator Representations and Warranties Relating to the Seller.......................7
Section 3.04 Remedies for Breach of Representations and Warranties..................................8
ARTICLE IV.
ORIGINATOR'S COVENANTS
Section 4.01 Covenants of the Originator................................................................10
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 Indemnification.......................................................................10
ARTICLE VI.
TERMINATION
Section 6.01 Termination...........................................................................12
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment.............................................................................12
Section 7.02 Governing Law.........................................................................12
ii
Section 7.03 Notices...............................................................................12
Section 7.04 Severability of Provisions............................................................13
Section 7.05 Counterparts..........................................................................13
Section 7.06 Further Agreements....................................................................13
Section 7.07 Intention of the Parties..............................................................13
Section 7.08 Successors and Assigns: Assignment of Purchase Agreement..............................13
Section 7.09 Survival..............................................................................14
Section 7.10 Owner Trustee.........................................................................14
iii
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of July 19, 2002
(the "Agreement"), among Option One Mortgage Corporation (the "Originator"),
Option One Owner Trust 2002-3 (the "Seller") and Option One Mortgage Acceptance
Corporation (the "Purchaser").
WITNESSETH
WHEREAS, the Seller is the owner of (i) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below, and 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 July 1, 2002 (the "Pooling and Servicing Agreement") among
the Purchaser as depositor, the Originator as originator and servicer, the
Federal Home Loan Mortgage Corporation, as guarantor of the Class A-1
Certificates and the Class S-1 Certificates and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association as trustee (the "Trustee"), the Purchaser will convey the
Mortgage Loans to Option One Mortgage Loan Trust 2002-5 (the "Trust"); and
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.
"ORIGINATOR INFORMATION": The information in the [Prospectus Supplement
as follows: under "SUMMARY OF TERMS--Mortgage Loans," the first sentence under
the fifth 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," "RISK FACTORS- Convertible Mortgage 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," 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, assign, set over, and otherwise convey to the
Purchaser, 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 or after the Cut-off Date and all collections in
respect of interest and principal due 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 in
respect of the Mortgage Loans and (iv) all proceeds of any of the foregoing.
(b) In connection with the transactions contemplated by Section 2.08 of
the Pooling and Servicing Agreement, the Seller hereby agrees that the Depositor
shall be under no obligation to purchase any Subsequent Mortgage Loans unless
(i) the conditions precedent contained in Section 2.08 of the Pooling and
Servicing Agreement and the Subsequent Transfer Instrument, substantially in the
form of Exhibit R thereto, are satisfied and (ii) each Subsequent Mortgage Loan
satisfies the representations and warranties contained in Section 3.01 of this
Agreement. The sale of Subsequent Mortgage Loans by the Seller to the Depositor
shall be effected in accordance with the terms of Section 2.08 of the Pooling
and Servicing Agreement pursuant to a Subsequent Mortgage Loan Purchase
Agreement substantially in the form of this Agreement.
Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE. In connection with
any transfer pursuant to Section 2.01 hereof, the Originator agrees, at its own
expense on or prior to the Closing Date, (i) 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 and (ii) to deliver to the Purchaser, the Guarantor
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,
(A) its account number and (B) the Cut-off Date Principal Balance. Such file,
which forms a part of Exhibit D to the Pooling and Servicing
2
Agreement, shall also be marked as Schedule I to this Agreement and is hereby
incorporated into and made a part of this Agreement.
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:
(a) the original Mortgage Note, endorsed either (A) in blank or (B) in
the following form: "Pay to the order of ▇▇▇▇▇ 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;
(b) 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;
(c) an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank, without recourse,
or (B) to "▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Trustee, without
recourse";
(d) an original copy of any intervening assignment of Mortgage showing
a complete chain of assignments;
(e) the original or a certified copy of lender's title insurance
policy; and
(f) 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(b), (c) or (d)
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
3
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 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(e) 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 90 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 in accordance with 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(c) hereof and, to the extent necessary, in Section 2.02(d) 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 Trustee, the Guarantor,
Rating Agencies and the NIMS Insurer, if any, 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
4
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 (v)
and (vi) above) set forth in the preceding sentence or (b) upon the occurrence
of condition (v) or (vi) in the preceding sentence, the Originator shall be
required to deliver such Assignments for recording as provided above, promptly
and in any event within 30 days following receipt of such notice.
Notwithstanding the foregoing, if the Originator fails to pay the cost of
recording the Assignments, such expense will be paid by the Trustee and the
Trustee shall be reimbursed for such expenses by the Trust. 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 ▇▇▇▇▇ 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 $152,851,752.96 and (ii) a 32.32% percentage
interest in the Class C Certificates, the Class P Certificates, the Class R
5
Certificates and the Class R-X 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 and the Information Circular 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 makes representations and warranties set
forth in Exhibit A to the Purchaser with respect to the Mortgage Loans as of the
Closing Date or as of such other date specifically provided herein.
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:
(a) 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;
(b) 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;
(c) 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;
(d) 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
6
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;
(e) 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;
(f) 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;
(g) 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 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 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;
(i) 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;
(j) 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;
(k) 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 dependent 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
7
(l) 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;
(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;
(t) The Seller has not transferred the Mortgage Loans to the Depositor
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
8
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 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
9
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 90 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 90 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, 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 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.
10
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
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
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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.
(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
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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 under 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 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 Sections 5.01(a)
and (b) 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
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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, the Guarantor, the NIMs Insurer, if any, 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 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.
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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: (i) if to the Originator: Option One Mortgage Corporation, 3 ▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, or such other address as may
hereafter be furnished to the Purchaser and the Seller in writing by the
Originator; (ii) if to the Purchaser: Option One Mortgage Acceptance
Corporation, 3 ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, or such
other address as may hereafter be furnished to the Seller and the Originator in
writing by the Purchaser and (iii) if to the Seller: Option One Owner Trust
2002-3, c/o Wilmington Trust Company, One ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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
15
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
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 Originator, the Trustee, the Guarantor and the NIMs
Insurer, if any. The Guarantor and the NIMs Insurer, if any, shall be third
party beneficiaries 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 by the Originator or the Seller 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
16
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.
17
IN WITNESS WHEREOF, the Seller, the Purchaser and the Originator 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 first
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 2002-3, as
Seller
By: Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee.
By:__________________________________
Name:
Title:
SCHEDULE I
MORTGAGE LOANS
[Available Upon Request]
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EXHIBIT A
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR REGARDING THE MORTGAGE LOANS.
The Originator represents and warrants to the Purchaser, as of the
Closing Date unless specifically stated otherwise in such representation and
warranty, as follows:
(i) No misrepresentation of a material fact or fraud in
respect of the origination, modification or amendment of any Mortgage
Loan has taken place on the part of any person, including, without
limitation, the related mortgagor, any appraiser, any builder or
developer or any party involved in the origination of such Mortgage
Loan;
(ii) As of the last calendar day of June 2002 and with respect
to any Initial Mortgage Loan that had a payment due on or before May 1,
2002, the Monthly Payment due on May 1, 2002 has been received. As of
the last calendar day of June 2002 and with respect to any Initial
Mortgage Loan that had a payment due on or before June 1, 2002, except
with respect to 0.00% of the Initial Mortgage Loans, by aggregate
Cut-off Date Principal Balance of the Initial Mortgage Loans, the
Monthly Payment due on June 1, 2002 has been received. In addition, (a)
0.00% of the Initial Mortgage Loans, by aggregate Cut-off Date
Principal Balance of the Initial Mortgage Loans have been 30 or more
days delinquent in the last 12 months and (b) none of the Initial
Mortgage Loans, by aggregate Cut-off Date Principal Balance of the
Initial Mortgage Loans have been 30 or more days delinquent for two
payment periods in the last 12 months;
(iii) Each Mortgage Loan, as of the Closing Date, is an
adjustable rate or fixed rate Mortgage Loan having an original term to
maturity from the date on which the first monthly payment is due of not
more than 30 years. Each Mortgage Note with respect to the Mortgage
Loans will provide for a schedule of substantially level and equal
Monthly Payments which are sufficient to amortize fully the principal
balance of such Mortgage Loan over a period of time equal to the
amortization period of such Mortgage Note; provided, however, that
certain Mortgage Loans constituting 0.82% of the Initial Mortgage
Loans, by aggregate Cut- off Date Principal Balance of the Initial
Mortgage Loans, are Balloon Mortgage Loans that provide for final
Monthly Payment substantially greater than the preceding Monthly
Payments. All such Balloon Mortgage Loans provide for Monthly Payments
based upon a 30 year amortization schedule with a final Balloon Payment
no later than the 15th year. None of the Initial Mortgage Loans, by
aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans,
are second lien Mortgage Loans;
(iv) No more than 34.87% and 9.80% of the Initial Mortgage
Loans, by aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans, had Loan-to-Value Ratios at origination exceeding 80%
and 90% respectively. All Mortgage Loans had Loan-to-Value Ratios at
origination of less than or equal to 100.00%;
(v) 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 or the Information Circular. Each Mortgage Loan
is
20
currently being serviced by the Originator and has been serviced by
the Originator since the date of origination of such Mortgage Loan;
(vi) No Mortgage Loan is the subject of foreclosure
proceedings and, to the best of the Originator's knowledge, no obligor
of any of the Mortgage Loans has filed for bankruptcy protection;
(vii) As of the Cut-off Date, no more than 0.44% of the
Initial Mortgage Loans, by aggregate Cut-off Date Principal Balance of
the Initial Mortgage Loans, are secured by manufactured houses and none
of the Initial Mortgage Loans are secured by mobile homes;
(viii) Each Mortgage transferred to the Trustee is a valid
first or second lien on the Mortgaged Property subject only to (a) the
lien of current real property taxes and assessments, (b) covenants,
conditions and restriction, 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 in the appraisal made
in connection with the origination of the related mortgage loan, (c)
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 (d) in the case of a second lien, only
to a first lien on such Mortgaged Property;
(ix) There is no delinquent tax or assessment lien against any
Mortgaged Property;
(x) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage except those which
are insured against by the title insurance policy referred to in the
Pooling and Servicing Agreement;
(xi) Each Mortgage Loan at origination complied in all
material respects with applicable state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending and disclosure laws, and
consummation of the transactions contemplated hereby, including,
without limitation, the receipt of interest, will not involve the
violation of any such laws;
(xii) None of the Mortgage Loans are cooperative share
Mortgages;
(xiii) If the improvements securing a Mortgage Loan were in a
federally designated special flood hazard area as of the date of
origination, flood insurance in the amount described in the Pooling and
Servicing Agreement (and to the extent required by the Pooling and
Servicing Agreement) covers the related Mortgaged Property (either by
coverage under the federal flood insurance program or by coverage by
private insurers);
(xiv) A lender's policy of title insurance or a commitment
(binder) to issue the same or an attorney's certificate or opinion of
title was effective on the date of the origination of
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each Mortgage Loan and each such policy or certificate or opinion of
title is valid and remains in full force and effect;
(xv) [Reserved];
(xvi) Each appraisal of a Mortgage Loan that was used to
determine the appraised value of the related Mortgaged Property was
conducted generally in accordance with the Program(s) and included an
assessment of the fair market value of the related Mortgaged Property
at the time of the appraisal. The Mortgage File contains an appraisal
of the applicable Mortgaged Property;
(xvii) The information set forth on the Mortgage Loan Schedule
with respect to each Mortgage Loan is true and correct in all material
respects as of the Cut-off Date, unless another date is set forth in
the Mortgage Loan Schedule;
(xviii) Each Mortgage Loan constitutes a qualified mortgage
under Section 860G(a)(3)(A) of the Code and Treasury Regulations
Section 1.860G-2(a)(1) and (3);
(xix) Each Mortgage and Mortgage Note is the legal, valid and
binding obligation of the related Mortgagor and is enforceable by the
Trustee or any co-trustee appointed hereunder against the Mortgagor in
accordance with its terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by law, and all parties to each Mortgage Loan and the Mortgagor had
full legal capacity to execute all Mortgage Loan documents and to
convey the estate therein purported to be conveyed; and the Mortgage
and each Mortgage Note have been duly and validly executed by such
parties;
.. (xx) All individual insurance policies contain a standard mortgagee
clause naming the Originator, its successors and assigns, as mortgagee.
All premiums thereon have been paid. Each Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's
cost and expense, and upon 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;
(xxi) Any advances made after the date of origination of a
Mortgage Loan but prior to the Cut-off Date have been consolidated with
the outstanding principal amount secured by the related Mortgage, and
the secured principal amount, as consolidated, bears a single interest
rate and single repayment term reflected on the Mortgage Loan Schedule.
The consolidated principal amount does not exceed the original
principal amount of the related Mortgage Loan;
(xxii) There are no defaults in complying with the terms of
the Mortgage, and either (1) any taxes, governmental assessments,
insurance premiums, water, sewer and municipal changes or ground rents
which previously became due and owing have been paid or (2) an escrow
of funds has been established in an amount sufficient to pay for every
such item which remains unpaid and which has been assessed but is not
yet due and payable. Except
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for payments in the nature of Escrow Payments, including without
limitation, taxes and insurance payments, the Originator 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 by the Mortgage Note, except for
interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is greater, to the day
which precedes by one month the Due Date of the first installment of
principal and interest;
(xxiii) No improvement located on or being part of any
Mortgaged Property is in violation of any applicable zoning law or
regulation. All inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of each Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities and such Mortgaged Property is lawfully
occupied under the applicable law;
(xxiv) The proceeds of each Mortgage Loan have been fully
disbursed and there is no obligation on the part of the mortgagee to
make future advances thereunder and any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursement of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making closing or recording the
Mortgage Loans were paid and the Mortgagor is not entitled to any
refund of amounts paid or due under the Mortgage Note;
(xxv) There is no obligation on the part of the Originator or
any other party to make payments in addition to those made by the
Mortgagor;
(xxvi) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;
(xxvii) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and (ii) otherwise by
judicial or non-judicial foreclosure. There is no homestead or other
exemption available to the related Mortgagor which would materially
interfere with the right to sell the Mortgaged Property at a trustee's
sale or the right to foreclose the Mortgage subject to the applicable
federal and state laws and judicial precedent with respect to
bankruptcy and rights of redemption. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the
property;
(xxviii) All amounts received after the Cut-off Date with
respect to the Mortgage Loans to which the Originator is not entitled
will be deposited into the Collection Account within one Business Day
after the Closing Date;
23
(xxix) The Originator has not transferred the Mortgage Loans
to the Depositor, and the Depositor has not transferred the Mortgage
Loans to the Trust with any intent to hinder, delay or defraud any of
its creditors;
(xxx) All parties which have had any interest in the Mortgage
Loans, whether as originator, mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and disposed
of such interest, were): (A) organized under the laws of such state, or
(B) qualified to do business in such state, or (C) federal savings and
loan associations or national banks having principal offices in such
state, or (D) not doing business in such state so as to require
qualification or licensing, or (E) not otherwise required to be
licensed in such state. To the best of the Originator's knowledge, all
parties which have had any interest in the Mortgage Loans were in
compliance with any and all applicable licensing requirements of the
laws of the state wherein the Mortgaged Property is located or were not
required to be licensed in such state;
(xxxi) Each document or instrument in the related Mortgage
Files is in a form generally acceptable to prudent mortgage lenders
that regularly originate or purchase mortgage loans comparable to the
Mortgage Loans for sale to prudent investors in the secondary market
that invest in mortgage loans such as the Mortgage Loans;
(xxxii) Each Mortgaged Property is improved by a single (one-
to four-) family residential dwelling, including, without limitation,
condominiums, townhouses and manufactured homes. No Mortgaged Property
is improved by a mobile home. Each manufactured home constituting any
portion of any Mortgaged Property constitutes real property under
applicable state law; and each manufactured home constituting any
portion of any Mortgaged Property is a "single-family residence" as
defined in Section 25(e)(10) of the Code;
(xxxiii) 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;
(xxxiv) 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
24
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;
(xxxv) The improvements upon each Mortgaged Property are
covered by a valid and existing hazard insurance policy with a
generally acceptable carrier that provides for fire and extended
coverage representing coverage described in the Pooling and Servicing
Agreement;
(xxxvi) The terms of each Mortgage Note and related Mortgage
have not been impaired, altered or modified in any material respect,
except by a written instrument which has been recorded or is in the
process of being recorded, if necessary, to protect the interests of
the Certificateholders and which has been or will be delivered to the
Custodian on behalf of the Trustee;
(xxxvii) Each original Mortgage was recorded and all
subsequent Assignments (other than the Assignment to the Trustee) have
been recorded in the appropriate jurisdictions wherein such recordation
is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(xxxviii) There is no proceeding pending or, to the best of
the Originator's knowledge, threatened for the total or partial
condemnation of any Mortgaged Property, nor is such a proceeding
currently occurring, and such property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other
casualty, so as to affect adversely the value of the Mortgaged Property
as security for the Mortgage Loan or the use for which the premises
were intended;
(xxxix) No Mortgage Loan was originated under a buydown plan;
(xl) 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;
(xli) The Master Servicer has fully furnished, in accordance
with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on
its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company or their successors (the "Credit Repositories") on
a monthly basis;
(xlii) No proceeds from any Mortgage Loan were used to
purchase single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage Loan;
(xliii) No Mortgage Loan has a Prepayment Charge term longer
than five years after its origination;
(xliv) Except for Mortgage Loans that are delinquent for a
time period less than that set forth in (ii) above, there is no
default, breach, violation or event of acceleration existing
25
under any 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 default, breach, violation or event
of acceleration; and neither the Originator, the Seller, nor any other
entity involved in originating or servicing a Mortgage Loan, has waived
any default, breach, violation or event of acceleration;
(xlv) 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 or the Information
Circular;
(xlvi) Each Mortgage Loan was originated on or after February
2002.
(xlvii) None of the Mortgage Loans were originated while the
Borrower was in bankruptcy or if foreclosure proceedings had begun;
(xlviii) The Originator represents and warrants that the
Originator currently operates or actively participates in an on-going
business (A) to originate single family mortgage loans ("Loans"),
and/or (B) to make periodic purchases of Loans from originators or
sellers, and/or (C) to issue and/or purchase securities or bonds
supported by the Loans, a portion of which Loans are made to borrowers
who are:
(a) low-income families (families with incomes of 80% or less
of area median income) living in low-income areas (a census
tract or block numbering area in which the median income does
not exceed 80% of the area median income); or
(b) very low-income families (families with incomes of 60% or
less of area median income).
(xlix) Each Mortgage contains a provision for the acceleration
of the payment of the unpaid Principal Balance of the related Mortgage
Loan in the event the related Mortgaged Property is sold without the
prior consent of the mortgagee thereunder;
(l) With respect to each Mortgage Loan secured by a
manufactured home: (a) the manufactured home is permanently affixed to
a foundation which is suitable for the soil conditions of the site; (b)
all foundations, both perimeter and interior, have footings that are
located below the frost line; (c) any wheels, axles and trailer hitches
are removed from the manufactured home and (d) the Mortgage Loan is
covered under a standard real estate title insurance policy or
attorney's title opinion or certificate that identified the
manufactured home as part of the real property and insurers or
indemnifies against any loss if the manufactured home is determined not
to be part of the real property;
(li) 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;
26
(lii) No Mortgage Loan secured by a second priority lien has a
Principal Balance as of the applicable Cut-off Date in excess of half
of ▇▇▇▇▇▇▇ Mac's loan limits for such type of residence;
(liii) The pool of Mortgage Loans backing the Certificates
does not contain the first and second lien Mortgage Loans relating to a
single Mortgaged Property if the aggregate original Principal Balance
of such Mortgage Loans exceeds ▇▇▇▇▇▇▇ Mac's loan limits. To the best
of the Originator's knowledge, the pool of Mortgage Loans backing the
Certificates will not result in a violation of ▇▇▇▇▇▇▇ Mac's loan
limitations;
(liv) No Mortgage Loan has been previously rejected by ▇▇▇▇▇▇▇
Mac;
(lv) The Mortgage Loans were not intentionally selected by the
Seller in a manner intended to adversely affect the Purchaser or the
Trust;
(lvi) 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;
(lvii) No Mortgage Loan secured by a subordinate lien had an
original principal obligation in excess of 50 percent of ▇▇▇▇▇▇▇ Mac's
one-family residence mortgage amount limitation for first-lien
mortgages in effect as of the Cut-off Date;
(lviii) Each Mortgage Loan had an original principal balance
obligation that was not higher than the maximum principal balance for
Mortgage Loans that are eligible for purchase by ▇▇▇▇▇▇▇ Mac; and
(lix) To the best of Seller's knowledge and with respect to
each Mortgage Loan that is covered by mortgage insurance, the
improvement(s) located on or being part of any Mortgage Property were
constructed in accordance with the specifications set forth in the
original construction plans.
With respect to any representation that is made to the best of the
Originator's knowledge or as to which the Originator has no knowledge, if it is
discovered by the Originator, the Guarantor or the Trustee that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan 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 or warranty.
27
OPTION ONE MORTGAGE CORPORATION,
as Seller
and
OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
as Purchaser
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of July 19, 2002
Option One Mortgage Loan Trust 2002-5
Asset-Backed Certificates, Series 2002-5
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.................................................................1
Section 2.02 OBLIGATIONS OF SELLER UPON SALE........................................................2
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.......................................4
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS.........................................................................5
Section 3.02 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER...........................5
Section 3.03 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES..................................7
ARTICLE IV.
SELLER'S COVENANTS
Section 4.01 COVENANTS OF THE SELLER.....................................................................8
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 INDEMNIFICATION........................................................................9
ARTICLE VI.
TERMINATION
Section 6.01 TERMINATION...........................................................................10
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT.............................................................................11
Section 7.02 GOVERNING LAW.........................................................................11
Section 7.03 NOTICES...............................................................................11
ii
Section 7.04 SEVERABILITY OF PROVISIONS............................................................11
Section 7.05 COUNTERPARTS..........................................................................11
Section 7.06 FURTHER AGREEMENTS....................................................................11
Section 7.07 INTENTION OF THE PARTIES..............................................................12
Section 7.08 SUCCESSORS AND ASSIGNS: ASSIGNMENT OF PURCHASE AGREEMENT..............................12
Section 7.09 SURVIVAL..............................................................................12
iii
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of July 19, 2002
(the "Agreement"), between Option One Mortgage Corporation (the "Seller") and
Option One Mortgage Acceptance Corporation (the "Purchaser").
WITNESSETH
----------
WHEREAS, the Seller is the owner of (i) the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto referred to below, and 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 July 1, 2002 (the "Pooling and Servicing Agreement") among
the Purchaser as depositor, the Seller as originator and master servicer, the
Federal Home Loan Mortgage Corporation, as guarantor of the Class A-1
Certificates and the Class S-1 Certificates and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association as trustee (the "Trustee"), the Purchaser will convey the
Mortgage Loans to Option One Mortgage Loan Trust 2002-5 (the "Trust"); and
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," the first sentence under the
fifth 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," "RISK FACTORS- Convertible Mortgage 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," 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, assign, set over, and otherwise convey to the
Purchaser, 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 or after the Cut-off Date and all collections in
respect of interest and principal due 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 in
respect of the Mortgage Loans and (iv) all proceeds of any of the foregoing.
(b) In connection with the transactions contemplated by Section 2.08 of
the Pooling and Servicing Agreement, the Seller hereby agrees that the Depositor
shall be under no obligation to purchase any Subsequent Mortgage Loans unless
(i) the conditions precedent contained in Section 2.08 of the Pooling and
Servicing Agreement and the Subsequent Transfer Instrument, substantially in the
form of Exhibit R thereto, are satisfied and (ii) each Subsequent Mortgage Loan
satisfies the representations and warranties contained in Section 3.01 of this
Agreement. The sale of Subsequent Mortgage Loans by the Seller to the Depositor
shall be effected in accordance with the terms of Section 2.08 of the Pooling
and Servicing Agreement pursuant to a Subsequent Mortgage Loan Purchase
Agreement substantially in the form of this Agreement.
Section 2.02 OBLIGATIONS OF SELLER UPON SALE. In connection with any
transfer pursuant to Section 2.01 hereof, the Seller agrees, at its own expense
on or prior to the Closing Date, (i) to cause its books and records to indicate
that the Mortgage Loans have been sold to the Purchaser pursuant to this
Agreement and (ii) to deliver to the Purchaser, the Guarantor 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, (A) its account
number and (B) the Cut-off Date Principal Balance. Such file, which forms a part
of Exhibit B 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.
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:
2
(a) the original Mortgage Note, endorsed either (A) in blank or (B) in
the following form: "Pay to the order of ▇▇▇▇▇ 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;
(b) 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;
(c) an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank, without recourse,
or (B) to "▇▇▇▇▇ Fargo Bank Minnesota, National Association, as Trustee, without
recourse";
(d) an original copy of any intervening assignment of Mortgage showing
a complete chain of assignments;
(e) the original or a certified copy of lender's title insurance
policy; and
(f) 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
caused the appropriate entries to be made 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(b), (c) or (d)
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(e) 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
3
to the Trustee or the Custodian, promptly upon receipt thereof. 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 90 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 in accordance with 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(c)
hereof and, to the extent necessary, in Section 2.02(d) 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 Trustee, the Guarantor, the Rating Agencies and
the NIMS Insurer, if any, 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 (v) and (vi) above) set forth in the preceding
sentence or (b) upon the occurrence of condition (v) or (vi) in the preceding
sentence, the Seller shall be required to deliver such Assignments for recording
as provided above, promptly and in any event within 30 days following receipt of
such notice. Notwithstanding the foregoing, if the
4
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 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
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 ▇▇▇▇▇ 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 $3,037,966.08 and (ii) a 0.64% percentage interest
in the Class C Certificates, the Class P Certificates, the Class R Certificates
and the Class R-X 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 and the Information Circular 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 makes representations and warranties set forth
in Exhibit A to the Purchaser with respect to the Mortgage Loans as of the
Closing Date or as of such other date specifically provided herein.
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:
(a) 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;
(b) The Seller has the full power and authority 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, 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;
(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 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;
(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;
(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
6
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchase as the owner thereof;
(f) 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;
(g) 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;
(h) 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;
(i) 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;
(j) 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;
(k) 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;
(l) 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 dependent 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 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;
(m) The Seller has not transferred the Mortgage Loans with any intent
to hinder, delay or defraud any of its creditors; and
7
(n) 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 3.03 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 90 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 90 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, 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
8
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.
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
9
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;
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 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,
each of its respective 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 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
10
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 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 under this Article V consist of the Seller.
11
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 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 Sections 5.01(a)
and (b) 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
12
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 against the Purchaser, the Trustee, the
Guarantor, the NIMs Insurer, if any, 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: (i) if to the Seller: Option One Mortgage Corporation, 3 ▇▇▇, ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, or such other address as may hereafter
be furnished to the Purchaser in writing by the Seller; and (ii) if to the
Purchaser: Option One Mortgage Acceptance Corporation, 3 ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, or such other address as may hereafter be
furnished to the Seller in writing by the Purchaser.
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.
13
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, the Guarantor and the NIMs Insurer, if any.
The Guarantor and the NIMs Insurer, if any, shall be third party beneficiaries
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 by the Seller 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 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.
14
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.
15
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 first above written.
OPTION ONE MORTGAGE ACCEPTANCE
CORPORATION, as Purchaser
By:__________________________________
Name:
Title:
OPTION ONE MORTGAGE
CORPORATION, as Seller
By:__________________________________
Name:
Title:
SCHEDULE I
MORTGAGE LOANS
[Available Upon Request]
17
EXHIBIT A
REPRESENTATIONS AND WARRANTIES OF THE SELLER REGARDING THE MORTGAGE LOANS.
The Seller represents and warrants to the Purchaser, as of the Closing
Date unless specifically stated otherwise in such representation and warranty,
as follows:
(i) No misrepresentation of a material fact or fraud in
respect of the origination, modification or amendment of any Mortgage
Loan has taken place on the part of any person, including, without
limitation, the related mortgagor, any appraiser, any builder or
developer or any party involved in the origination of such Mortgage
Loan;
(ii) As of the last calendar day of June 2002 and with respect
to any Initial Mortgage Loan that had a payment due on or before May 1,
2002, the Monthly Payment due on May 1, 2002 has been received. As of
the last calendar day of June 2002 and with respect to any Initial
Mortgage Loan that had a payment due on or before June 1, 2002, except
with respect to 0.00% of the Initial Mortgage Loans, by aggregate
Cut-off Date Principal Balance of the Initial Mortgage Loans, the
Monthly Payment due on June 1, 2002 has been received. In addition, (a)
0.00% of the Initial Mortgage Loans, by aggregate Cut-off Date
Principal Balance of the Initial Mortgage Loans have been 30 or more
days delinquent in the last 12 months and (b) none of the Initial
Mortgage Loans, by aggregate Cut-off Date Principal Balance of the
Initial Mortgage Loans have been 30 or more days delinquent for two
payment periods in the last 12 months;
(iii) Each Mortgage Loan, as of the Closing Date, is an
adjustable rate or fixed rate Mortgage Loan having an original term to
maturity from the date on which the first monthly payment is due of not
more than 30 years. Each Mortgage Note with respect to the Mortgage
Loans will provide for a schedule of substantially level and equal
Monthly Payments which are sufficient to amortize fully the principal
balance of such Mortgage Loan over a period of time equal to the
amortization period of such Mortgage Note; provided, however, that
certain Mortgage Loans constituting 2.39% of the Initial Mortgage
Loans, by aggregate Cut- off Date Principal Balance of the Initial
Mortgage Loans, are Balloon Mortgage Loans that provide for final
Monthly Payment substantially greater than the preceding Monthly
Payments. All such Balloon Mortgage Loans provide for Monthly Payments
based upon a 30 year amortization schedule with a final Balloon Payment
no later than the 15th year. None of the Initial Mortgage Loans, by
aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans,
are second lien Mortgage Loans;
(iv) No more than 42.22% and 10.94% of the Initial Mortgage
Loans, by aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans, had Loan-to-Value Ratios at origination exceeding 80%
and 90% respectively. All Mortgage Loans had Loan-to-Value Ratios at
origination of less than or equal to 100.00%;
(v) 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 and the Information Circular. Each Mortgage Loan is
currently
18
being serviced by the Seller and has been serviced by the Seller since
the date of origination of such Mortgage Loan;
(vi) No Mortgage Loan is the subject of foreclosure
proceedings and, to the best of the Seller's knowledge, no obligor of
any of the Mortgage Loans has filed for bankruptcy protection;
(vii) As of the Cut-off Date, no more than 0.00% of the
Initial Mortgage Loans, by aggregate Cut-off Date Principal Balance of
the Initial Mortgage Loans, are secured by manufactured houses and none
of the Initial Mortgage Loans are secured by mobile homes;
(viii) Each Mortgage transferred to the Trustee is a valid
first or second lien on the Mortgaged Property subject only to (a) the
lien of current real property taxes and assessments, (b) covenants,
conditions and restriction, 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 in the appraisal made
in connection with the origination of the related mortgage loan, (c)
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 (d) in the case of a second lien, only
to a first lien on such Mortgaged Property;
(ix) There is no delinquent tax or assessment lien against any
Mortgaged Property;
(x) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage except those which
are insured against by the title insurance policy referred to in the
Pooling and Servicing Agreement;
(xi) Each Mortgage Loan at origination complied in all
material respects with applicable state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending and disclosure laws, and
consummation of the transactions contemplated hereby, including,
without limitation, the receipt of interest, will not involve the
violation of any such laws;
(xii) None of the Mortgage Loans are cooperative share
Mortgages;
(xiii) If the improvements securing a Mortgage Loan were in a
federally designated special flood hazard area as of the date of
origination, flood insurance in the amount described in the Pooling and
Servicing Agreement (and to the extent required by the Pooling and
Servicing Agreement) covers the related Mortgaged Property (either by
coverage under the federal flood insurance program or by coverage by
private insurers);
(xiv) A lender's policy of title insurance or a commitment
(binder) to issue the same or an attorney's certificate or opinion of
title was effective on the date of the origination of
19
each Mortgage Loan and each such policy or certificate or opinion of
title is valid and remains in full force and effect;
(xv) [Reserved];
(xvi) Each appraisal of a Mortgage Loan that was used to
determine the appraised value of the related Mortgaged Property was
conducted generally in accordance with the Program(s) and included an
assessment of the fair market value of the related Mortgaged Property
at the time of the appraisal. The Mortgage File contains an appraisal
of the applicable Mortgaged Property;
(xvii) The information set forth on the Mortgage Loan Schedule
with respect to each Mortgage Loan is true and correct in all material
respects as of the Cut-off Date, unless another date is set forth in
the Mortgage Loan Schedule;
(xviii) Each Mortgage Loan constitutes a qualified mortgage
under Section 860G(a)(3)(A) of the Code and Treasury Regulations
Section 1.860G-2(a)(1) and (3);
(xix) Each Mortgage and Mortgage Note is the legal, valid and
binding obligation of the related Mortgagor and is enforceable by the
Trustee or any co-trustee appointed hereunder against the Mortgagor in
accordance with its terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by law, and all parties to each Mortgage Loan and the Mortgagor had
full legal capacity to execute all Mortgage Loan documents and to
convey the estate therein purported to be conveyed; and the Mortgage
and each Mortgage Note have been duly and validly executed by such
parties;
.. (xx) All individual insurance policies contain a standard mortgagee
clause naming the Seller, its successors and assigns, as mortgagee. All
premiums thereon have been paid. Each Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and upon 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;
(xxi) Any advances made after the date of origination of a
Mortgage Loan but prior to the Cut-off Date have been consolidated with
the outstanding principal amount secured by the related Mortgage, and
the secured principal amount, as consolidated, bears a single interest
rate and single repayment term reflected on the Mortgage Loan Schedule.
The consolidated principal amount does not exceed the original
principal amount of the related Mortgage Loan;
(xxii) There are no defaults in complying with the terms of
the Mortgage, and either (1) any taxes, governmental assessments,
insurance premiums, water, sewer and municipal changes or ground rents
which previously became due and owing have been paid or (2) an escrow
of funds has been established in an amount sufficient to pay for every
such item which remains unpaid and which has been assessed but is not
yet due and payable. Except
20
for payments in the nature of Escrow Payments, including without
limitation, taxes and insurance payments, 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 by the Mortgage Note, except for
interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is greater, to the day
which precedes by one month the Due Date of the first installment of
principal and interest;
(xxiii) No improvement located on or being part of any
Mortgaged Property is in violation of any applicable zoning law or
regulation. All inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of each Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities and such Mortgaged Property is lawfully
occupied under the applicable law;
(xxiv) The proceeds of each Mortgage Loan have been fully
disbursed and there is no obligation on the part of the mortgagee to
make future advances thereunder and any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursement of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making closing or recording the
Mortgage Loans were paid and the Mortgagor is not entitled to any
refund of amounts paid or due under the Mortgage Note;
(xxv) There is no obligation on the part of the Seller or any
other party to make payments in addition to those made by the
Mortgagor;
(xxvi) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;
(xxvii) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and (ii) otherwise by
judicial or non-judicial foreclosure. There is no homestead or other
exemption available to the related Mortgagor which would materially
interfere with the right to sell the Mortgaged Property at a trustee's
sale or the right to foreclose the Mortgage subject to the applicable
federal and state laws and judicial precedent with respect to
bankruptcy and rights of redemption. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the
property;
(xxviii) All amounts received after the Cut-off Date with
respect to the Mortgage Loans to which the Seller is not entitled will
be deposited into the Collection Account within one Business Day after
the Closing Date;
21
(xxix) The Seller has not transferred the Mortgage Loans to
the Depositor, and the Depositor has not transferred the Mortgage Loans
to the Trust with any intent to hinder, delay or defraud any of its
creditors;
(xxx) All parties which have had any interest in the Mortgage
Loans, whether as originator, mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and disposed
of such interest, were): (A) organized under the laws of such state, or
(B) qualified to do business in such state, or (C) federal savings and
loan associations or national banks having principal offices in such
state, or (D) not doing business in such state so as to require
qualification or licensing, or (E) not otherwise required to be
licensed in such state. To the best of the Seller's knowledge, all
parties which have had any interest in the Mortgage Loans were in
compliance with any and all applicable licensing requirements of the
laws of the state wherein the Mortgaged Property is located or were not
required to be licensed in such state;
(xxxi) Each document or instrument in the related Mortgage
Files is in a form generally acceptable to prudent mortgage lenders
that regularly originate or purchase mortgage loans comparable to the
Mortgage Loans for sale to prudent investors in the secondary market
that invest in mortgage loans such as the Mortgage Loans;
(xxxii) Each Mortgaged Property is improved by a single (one-
to four-) family residential dwelling, including, without limitation,
condominiums, townhouses and manufactured homes. No Mortgaged Property
is improved by a mobile home. Each manufactured home constituting any
portion of any Mortgaged Property constitutes real property under
applicable state law; and each manufactured home constituting any
portion of any Mortgaged Property is a "single-family residence" as
defined in Section 25(e)(10) of the Code;
(xxxiii) 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;
(xxxiv) 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
22
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;
(xxxv) The improvements upon each Mortgaged Property are
covered by a valid and existing hazard insurance policy with a
generally acceptable carrier that provides for fire and extended
coverage representing coverage described in the Pooling and Servicing
Agreement;
(xxxvi) The terms of each Mortgage Note and related Mortgage
have not been impaired, altered or modified in any material respect,
except by a written instrument which has been recorded or is in the
process of being recorded, if necessary, to protect the interests of
the Certificateholders and which has been or will be delivered to the
Custodian on behalf of the Trustee;
(xxxvii) Each original Mortgage was recorded and all
subsequent Assignments (other than the Assignment to the Trustee) have
been recorded in the appropriate jurisdictions wherein such recordation
is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(xxxviii) There is no proceeding pending or, to the best of
the Seller's knowledge, threatened for the total or partial
condemnation of any Mortgaged Property, nor is such a proceeding
currently occurring, and such property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other
casualty, so as to affect adversely the value of the Mortgaged Property
as security for the Mortgage Loan or the use for which the premises
were intended;
(xxxix) No Mortgage Loan was originated under a buydown plan;
(xl) 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;
(xli) The Master Servicer has fully furnished, in accordance
with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on
its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company or their successors (the "Credit Repositories") on
a monthly basis;
(xlii) No proceeds from any Mortgage Loan were used to
purchase single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage Loan;
(xliii) No Mortgage Loan has a Prepayment Charge term longer
than five years after its origination;
(xliv) Except for Mortgage Loans that are delinquent for a
time period less than that set forth in (ii) above, there is no
default, breach, violation or event of acceleration existing
23
under any 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 default, breach, violation or event
of acceleration; and the Seller, has not waived any default, breach,
violation or event of acceleration;
(xlv) 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 or the Information
Circular;
(xlvi) Each Mortgage Loan was originated on or after April
2002;
(xlvii) None of the Mortgage Loans were originated while the
Borrower was in bankruptcy or if foreclosure proceedings had begun;
(xlviii) The Seller represents and warrants that the Seller
currently operates or actively participates in an on-going business (A)
to originate single family mortgage loans ("Loans"), and/or (B) to make
periodic purchases of Loans from originators or sellers, and/or (C) to
issue and/or purchase securities or bonds supported by the Loans, a
portion of which Loans are made to borrowers who are:
(a) low-income families (families with incomes of 80% or less
of area median income) living in low-income areas (a census
tract or block numbering area in which the median income does
not exceed 80% of the area median income); or
(b) very low-income families (families with incomes of 60% or
less of area median income).
(xlix) Each Mortgage contains a provision for the acceleration
of the payment of the unpaid Principal Balance of the related Mortgage
Loan in the event the related Mortgaged Property is sold without the
prior consent of the mortgagee thereunder;
(l) With respect to each Mortgage Loan secured by a
manufactured home: (a) the manufactured home is permanently affixed to
a foundation which is suitable for the soil conditions of the site; (b)
all foundations, both perimeter and interior, have footings that are
located below the frost line; (c) any wheels, axles and trailer hitches
are removed from the manufactured home and (d) the Mortgage Loan is
covered under a standard real estate title insurance policy or
attorney's title opinion or certificate that identified the
manufactured home as part of the real property and insurers or
indemnifies against any loss if the manufactured home is determined not
to be part of the real property;
(li) 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;
24
(lii) No Mortgage Loan secured by a second priority lien has a
Principal Balance as of the applicable Cut-off Date in excess of half
of ▇▇▇▇▇▇▇ Mac's loan limits for such type of residence;
(liii) The pool of Mortgage Loans backing the Certificates
does not contain the first and second lien Mortgage Loans relating to a
single Mortgaged Property if the aggregate original Principal Balance
of such Mortgage Loans exceeds ▇▇▇▇▇▇▇ Mac's loan limits. To the best
of the Seller's knowledge, the pool of Mortgage Loans backing the
Certificates will not result in a violation of ▇▇▇▇▇▇▇ Mac's loan
limitations;
(liv) No Mortgage Loan has been previously rejected by ▇▇▇▇▇▇▇
Mac;
(lv) The Mortgage Loans were not intentionally selected by the
Seller in a manner intended to adversely affect the Purchaser or the
Trust;
(lvi) 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;
(lvii) No Mortgage Loan secured by a subordinate lien had an
original principal obligation in excess of 50 percent of ▇▇▇▇▇▇▇ Mac's
one-family residence mortgage amount limitation for first-lien
mortgages in effect as of the Cut-off Date;
(lviii) Each Mortgage Loan had an original principal balance
obligation that was not higher than the maximum principal balance for
Mortgage Loans that are eligible for purchase by ▇▇▇▇▇▇▇ Mac; and
(lix) To the best of Originator's knowledge and with respect
to each Mortgage Loan that is covered by mortgage insurance, the
improvement(s) located on or being part of any Mortgage Property were
constructed in accordance with the specifications set forth in the
original construction plans.
With respect to any representation that is made to the best of the
Seller's knowledge or as to which the Seller has no knowledge, if it is
discovered by the Seller, the Guarantor or the Trustee that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan 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 or warranty.
25
EXHIBIT D
MORTGAGE LOAN SCHEDULE
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: ▇▇▇▇▇ Fargo Bank Minnesota,
National Association,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Inventory Control
Re: Pooling and Servicing Agreement dated as of July 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage
Corporation as master servicer (the "Master Servicer"), the
Federal Home Loan Mortgage Corporation, as guarantor with
respect to the Class A-1 Certificates and the Class S-1
Certificates (the "Guarantor") and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, a national banking association, as
Trustee (the "Trustee")
In connection with the administration of the Mortgage Loans
held by you as Trustee pursuant to the above-captioned Trustee
Agreement, we request the release, and hereby acknowledge
receipt, of the Trustee's Mortgage File for 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:________________________
Date:___________________________
Trustee
-------
▇▇▇▇▇ 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
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
July __, 2002
Option One Mortgage Acceptance Corporation Option One Mortgage Corporation
3 Ada 3 Ada
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Mac
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of July 1, 2002 (the "Agreement") among
the Depositor, Option One Mortgage Corporation as master
servicer (the "Master Servicer"), the Federal Home Loan
Mortgage Corporation, as guarantor with respect to the Class
A-1 Certificates and the Class S-1 Certificates (the
"Guarantor") and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, a national banking association, as Trustee (the
"Trustee") with respect to Option One Mortgage Loan Trust
2002-5, Asset-Backed Certificates, Series 2002-5
------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement,
subject to review of the contents thereof, the undersigned, as Trustee, hereby
certifies that it (or its custodian) has received the documents listed in
Section 2.01 of the Pooling and Servicing Agreement for each Mortgage File
pertaining to each Mortgage Loan listed on Exhibit B, to the Pooling and
Servicing Agreement, subject to any exceptions noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Pooling and
Servicing Agreement. This Certificate is subject in all respects to the terms of
Section 2.02 of the Pooling and Servicing Agreement and the Pooling and
Servicing Agreement sections cross-referenced therein.
▇▇▇▇▇ FARGO BANK MINNESOTA,
National Association, as Trustee
By:______________________________
Name:
Title:
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
________________
[Date]
Option One Mortgage Acceptance Corporation Option One Mortgage Corporation
3 Ada 3 Ada
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Mac
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of July 1, 2002 (the "Agreement") among
the Depositor, Option One Mortgage Corporation as master
servicer (the "Master Servicer"), the Federal Home Loan
Mortgage Corporation, as guarantor with respect to the Class
A-1 Certificates and the Class S-1 Certificates (the
"Guarantor") and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, a national banking association, as Trustee (the
"Trustee") with respect to Option One Mortgage Loan Trust
2002-5, Asset-Backed Certificates, Series 2002-5
------------------------------------------------------------
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.
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.
▇▇▇▇▇ FARGO BANK MINNESOTA,
National Association, as Trustee
By:_____________________________
Name:
Title:
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Option One Mortgage Acceptance Corporation
3 Ada
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Option One Mortgage Loan Trust 2002-5,
Asset-Backed Certificates Series 2002-5
---------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated
as of July 1, 2002 (the "Agreement") among the Depositor, Option One Mortgage
Corporation as master servicer (the "Master Servicer"), the Federal Home Loan
Mortgage Corporation, as guarantor with respect to the Class A-1 Certificates
and the Class S-1 Certificates (the "Guarantor") and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, a national banking association, as Trustee (the
"Trustee"), we hereby acknowledge the receipt of the original Mortgage Note with
any exceptions thereto listed on Exhibit 2.
▇▇▇▇▇ FARGO BANK MINNESOTA,
National Association, as Trustee
By:___________________________________
Name:
Title:
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
who 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.
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. PreSale/Pre-Foreclosure Sale
G. Short Payoff
H. Modification
2. NO WILLINGNESS-Typically the mortgagor(s) is unclear of
options to mitigate default and avoids all 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. PreSale/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
- 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.
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 ▇▇▇▇▇ Fargo
Bank Minnesota, National Association, as trustee on behalf of Option One
Mortgage Loan Trust 2002-5, Asset-Backed Certificates, Series 2002-5, to accept
the transfer of the above described loan from Seller.
Seller agrees to indemnify ▇▇▇▇▇ 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 _________________.
EXHIBIT I
[RESERVED]
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Option One Mortgage Acceptance ▇▇▇▇▇ Fargo Bank Minnesota,
Corporation National Association
3 Ada ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Option One Mortgage Loan Trust 2002-5,
Asset-Backed Certificates. Series 2002-5
----------------------------------------
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 addresses 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 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
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Option One Mortgage Acceptance ▇▇▇▇▇ Fargo Bank Minnesota,
Corporation National Association
3 Ada ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Option One Mortgage Loan Trust 2002-5,
Asset-Backed Certificates, Series 2002-5
----------------------------------------
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 Act or that would
render the disposition of the Certificates a violation of Section 5 of the 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 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, 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 Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:_______________________
Authorized Officer
ANNEX I 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:
i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
ii. 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.
___ 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.
iii. 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
andcommodity swaps.
iv. 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.
v. 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.
vi. 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 as 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:___________________________
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 Buyer's 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) 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:___________________________________
EXHIBIT K
AFFIDAVIT OF TRANSFER OF RESIDUAL CERTIFICATES
PURSUANT TO SECTION 5.02(b)
OPTION ONE MORTGAGE LOAN TRUST 2002-5,
ASSET-BACKED CERTIFICATES, SERIES 2002-5
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 a Residual Certificate (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"), Federal Home Loan Mortgage Corporation, as Guarantor and ▇▇▇▇▇ 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) for 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 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(b) 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(b) 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 J 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. If the Certificate is a "noneconomic residual interest," Transferee
understands that, as the holder of the noneconomic residual, the Transferee may
incur tax liabilities in excess of any cash flows generated by the interest and
that the Transferee intends to pay taxes associated with holding the residual
interest as they become due.
8. The Transferee's taxpayer identification number is _______.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
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.
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 _____. ____.
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Option One Mortgage Acceptance Corporation
3 Ada
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Option One Mortgage Loan Trust 2002-5,
Asset-Backed Certificates, Series 2002-5
----------------------------------------
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 Residual 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,
[NAME OF TRANSFEROR]
By:_____________________________________
EXHIBIT M
FORM OF ERISA REPRESENTATION LETTER
_____________, 20__
Option One Mortgage Acceptance Corporation ▇▇▇▇▇ Fargo Bank Minnesota, National
3 Ada Association
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Option One Mortgage Corporation
3 Ada
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Option One Mortgage Loan Trust 2002-5,
Asset-Backed Certificates Series 2002-5
---------------------------------------
Dear Sirs:
_______________________ (the "Transferee") intends to acquire
from _____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance Option One Mortgage Loan Trust 2002-5, Asset-Backed
Certificates Series 2002-5, Class [B][C][P][R][R-X] (the "Certificates"), issued
pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of July 1, 2002 among Option One Mortgage Acceptance
Corporation as depositor (the "Depositor"), Option One Mortgage Corporation as
master servicer (the "Master Servicer"), the Federal Home Loan Mortgage
Corporation as guarantor of the Class A-1 Certificates and the Class S-1
Certificates and ▇▇▇▇▇ Fargo Bank Minnesota, National Association as trustee
(the "Trustee"). Capitalized terms used herein and not otherwise defined shall
have the meanings assigned thereto in the Pooling and Servicing Agreement. The
Transferee hereby certifies, represents and warrants to, and covenants with the
Depositor, the Trustee and the Master Servicer [the following][For Class B
Certificates only: either]:
1. The Certificates (i) are not being acquired by, and will
not be transferred to, any employee benefit plan within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or other retirement arrangement, including individual retirement
accounts and annuities, ▇▇▇▇▇ plans and bank collective investment funds and
insurance company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R.ss.2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29 ▇.▇.▇.▇▇.
2510.3-101; or
2. [For Class B Certificates Only: The Transferee is an
insurance company and (A) the source of funds used to purchase the Class B
Certificate is an "insurance company general account" (as such term is defined
in PTCE 95-60), (B) the conditions set forth in PTCE 95-60 have been satisfied
and (C) there is no Plan with respect to which the amount of such general
account's reserves and liabilities for contracts held by or on behalf of such
Plan and all other Plans maintained by the same employer (or any "affiliate"
thereof, as defined in PTCE 95-60) or by the same employee organization, exceeds
10% of the total of all reserves and liabilities of such general
account (as determined under PTCE 95-60) as of the date of the acquisition of
the Class B Certificates.
Very truly yours,
[Transferee]
By:__________________________
Name:
Title:
EXHIBIT N
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 Advance $______________________
4. Net Liquidation Proceeds $__________
5.
(Item 2 minus Item 3)
6. Principal Balance of Mortgage Loan $____________________
7. Loss, if any (Item 5 minus Item 4) $____________________
EXHIBIT O
OPTION ONE MORTGAGE CORPORATION
UNDERWRITING GUIDELINES
EXHIBIT P
FORM OF LOAN DATA REMITTANCE REPORT
LOAN LEVEL REPORTING - LNS FILE FORMAT
DO NOT INCLUDE HEADER OR TRAILER RECORDS IN FILES
DETAIL RECORD FIELDS: FILE NAME: T0NNMMYY.LNS
DATA: FIELD FORMAT FIELD DEFINITION
T0NNMMYY.LNS NBR POSITION
---------------------------------------------------------------------------------------------------------------------------
Blank 9(X) 001-009 Filler data - Blank filled
Blank 1 1(x) 010
SERVICER LOAN NO. 13(X) 011-023 UNIQUE LOAN NUMBER ASSIGNED TO THE
MORTGAGE BY THE SELLER/SERVICER
Blank 2 1(x) 024 Due date of last full payment received from
Due Date of Last YYYYMMDD 025-0342 the borrower.
Paid (Data is when payment was due)
Installment
(DDLPI)
Blank 3 1(x) 033 Date of the last fully paid monthly
Last Payment YYYYMMDD 034-041 installment of principal, interest, and escrow
Received Date (if any) that was received from the borrower.
(LPRD) Note: Dates of partial payments should not
be entered here. (Data is when payment was
actually received from the borrower) IF THIS
INFORMATION IS NOT AVAILABLE, THEN POPULATE THE
FIELD WITH THE DEFAULT VALUE OF 19000101.
Blank 4 1(x) 042 Unpaid Principal balance should be reported
Unpaid Principal 13.2 043-055 as follows:
Balance (UPB) * For loans in the REMIC trust, the mortgage
100% UPB reduced by normal principal reduction,
principal advances or prepayments. * FOR LOANS
THAT ARE PAID IN FULL BY THE MORTGAGOR,
REPURCHASED FROM THE REMIC TRUST, OR
LIQUIDATED, REPORT THE UPB AS ZERO.
Blank 5 1(x) 056 Gross/Coupon Interest
Interest Paid 13.2 057-069
Blank 6 1(x) 070 Total principal paid on the mortgage,
Principal Paid 13.2 071-083 including any losses or advances. If the loan
is repurchased or liquidated from the trust, it
should be equivalent to the full remaining loan
balance.
DATA: FIELD FORMAT FIELD DEFINITION
T0NNMMYY.LNS NBR POSITION
---------------------------------------------------------------------------------------------------------------------------
Blank 7 (1x) 084 This field should contain an exception code
Exception Code 2(x) 085-086 only when exception activity occurs for that
period, otherwise this field should contain a
0. DEFAULT VALUE IS 0. 40 Inactivate loan 60
Payoff - mortgage matured 61 Payoff - mortgage
prepaid 65 Payoff - mortgage repurchased 69
Payoff - mortgage liquidated 70 Transfer to REO
72 Foreclosure 80 Substituted Loan - Loan is
added as a substitute for another loan 81
Reinstated Loan - Loan was previously
delinquent, but the borrower has brought it
current 90 Loan Modified - This is an
exceptional activity code which is reserved for
future use. Modifications typically require
repurchase 8 from the trust prior to modifying
the loan.
Blank 8 1(x) 087 Date the exception occurred. If an exception
Exception Date YYYYMMDD 088-095 has not occurred, this field should contain the
default value of 1900101.
Blank 13.2 096-108 Filler - Blank filled
Blank 9 1(X) 109 Filler - Blank filled
Mortgage Note Rate 6.3 110-115
Rate associated with the borrower's schedule
payment.
Blank 10 1(x) ▇▇▇
▇▇▇▇▇▇▇▇ ▇&▇ 13.2 117-129 Principal and intrest portion of the borrowers
Amount scheduled installment, Note: 100% of the
principal and interest amount should be entered
in this field, including servicing and
guarantee fees.
Blank 1(x) 130
Realized Losses 11 13.2 131-143 Amount of realized losses for that period.
Blank 12 1(x) 144 Total principal payments advanced by the
Cumulative 13.2 145-157 Servicer and not repaid by the borrower.
Principal
Advances
Blank 13 1(x) 158 Amount of interest payment advanced by the
Interest Advances 13.2 159-171 Servicer for that period.
DATA: FIELD FORMAT FIELD DEFINITION
T0NNMMYY.LNS NBR POSITION
---------------------------------------------------------------------------------------------------------------------------
Blank 1(x) 172 Pertains to activity in the prior reporting
Loan Status 14 1(X) 173 cycle.
0 - Active
4 - Foreclosure
5-REO
6 - Closed (PAYOFFS &
REPURCHASES)
9 - Bankruptcy (OVERRIDES ACTIVE
STATUS)
Note: 30,60 & 90 day delinquency status will
be derived from
the DDLPI field.
Blank 1(x) 174
Blank 1(x) 174
Subservicer No. 15 6 175-180 Subservicer ID# - #S/S# assigned by ▇▇▇▇▇▇▇
▇▇▇▇▇ 1(x) 181 Mac - 6 digits
Actual Loan 16 13.2 182-194
Balance Actual loan balance outstanding from the borrower and
does not include advances made by the servicer.
Blank 17 (1x) 195 Applies only to ARM loans and reflects the
Next Interest Rate YYYYMMDD 196-203 next pending interest rate adjustment date.
Change Date DEFAULT IS 190000101.
Blank 18 (1x) 204 Applies only to payment capped ARM loans
Next Interest YYYYMMDD 209-212 and reflects the next pending payment
Payment adjustment date. DEFAULT IS 190000101.
Change Date
Blank 19 1(x) 213
Index Value at 6.3 214-219 The index rate used in determining the ARM
Reset coupon.
Date DEFAULT VALUE IS 0.
Blank 20 1(x) 220 Should be populated in advance of the rate
Next Mortgage Rate 6.3 221-226 adjustment. DEFAULT VALUE IS 0.
expected at reset
date
Blank 1(x) 227
Collateral Group 21 2 228-229 This is a collateral grouping number for
No. # whole loan directed collateral deals. DEFAULT
VALUE IS 0.
Blank 1(x) 230
DATA: FIELD FORMAT FIELD DEFINITION
T0NNMMYY.LNS NBR POSITION
---------------------------------------------------------------------------------------------------------------------------
Current Arrearage 22 13.2 231-243 The current amount of cashflow applied to
Paid the arrearage balance. Applies to loans that
have been or are currently in default.
DEFAULT VALUE IS 0.
Blank 1(x) 244
Outstanding 23 13.2 245-257 The total amount of outstanding interest
Arrearage Balance accrued under forbearance period, after
current arrearage payment. DEFAULT VALUE IS
0.
Blank 1(x) 258
▇▇▇▇▇▇▇ MAC LOAN 24 13(X) 259-271 UNIQUE & PERMANENT LOAN NUMBER
NUMBER ASSIGNED TO THE MORTGAGE BY ▇▇▇▇▇▇▇ MAC.
USED FOR DISCLOSURE.
PREPAYMENT 25 13.2 272-274 THE BORROWERS PENALTY PAYMENT FOR
PREMIUM AMOUNT PREPAYING HIS MORTGAGE. THIS AMOUNT IS
ALLOCATED IN AGGREGATE AS A DIRECTED
COLLATERAL AMOUNT TO A SPECIFIC BOND.
EXHIBIT Q
FORM OF TRUSTEE'S REMITTANCE REPORT - BND FILE FORMAT
(NOTE: THIS INFORMATION IS LOADED TO ASDB EVERY MONTH BY ▇▇▇ ▇▇▇▇▇)
DETAIL RECORD FIELDS: FILE NAME: TONNMMYY.BND
FLD FIELD
FIELD NOTE NBR FORMA POSITION DEFINITION
-----------------------------------------------------------------------------------------------------------------------
Series# (Deal Identifier) 1 10(x) 001-010 As defined by issuer or as assigned - ▇▇▇▇
Blank 1(x) 011
Class # 2 (2x) 012-013 As assigned or determined by issuer. Input
default value if not applicable.
Blank 5(x) 014-018
CUSIP # 3 9(x) 019-027 If not available, input default value. ▇▇▇▇▇▇▇
Mac may provide dummy numbers, if CUSIP
numbers are not assigned by the issuer.
Blank 1(x) 028
Coupon-- Current Pass- 4 6.3 029-034 Bond Coupon Rate
through Rate
Blank 1(x) 035
Original Face Value 5 13.2 035- Par Value, original issue amount, of Class
048
Blank 1(x) 049
Beginning Unpaid Principal 6 13.2 050-062 Beginning Class UPB as of beginning of cycle
Balance
Blank 1(x) 063
Principal payment amount 7 13.2 064-076 Dollar amount of class principal payment
Blank 1(x) 077
Interest payment amount 8 13.2 078-090 Dollar amount of class interest payment
Blank 1(x) 091
Total Distribution 9 13.2 092-104 Dollar amount of principal & interest payment
Blank 1(x) 105
Deferred Interest 10 13.2 106-118 Dollar amount of overcollateralization
(Difference between security principal and
mortgage principal balances applied this period.
This can include non-cash allocations)
Blank 1(x) 119
FIELD NOTE NBR FORMA POSITION DEFINITION
-----------------------------------------------------------------------------------------------------------------------
Principal Loss 11 1.32 120-132 Dollar amount of principal losses applied this
period
Blank 1(x) 133
Interest Loss 12 13.2 134-146 Dollar amount of interest losses applied this
period
Blank 1(x) 147
Ending Unpaid Principal 13 13.2 148-160 Ending Class UPB as of beginning of cycle
Balance
Blank 1(x) 161
Principal Distribution Factor 14 9.7 162-170 Factor representing the principal payment
divided by the Original UPB of the class.
Blank 1(x) 171
Interest Distribution Factor 15 9.7 172-180 Factor representing the interest payment divided
by the Beginning UPB of the class.
Blank 1(x) 181
Prepayment Interest Shortfall 16 9.7 182-190 If loans were prepaid and an interest shortfall
arose in this period, it should be entered in this
field. If not applicable, a zero should be used.
Blank 1(x) 191
Total Distribution Factor 17 9.7 192-200 Factor representing the combined principal and
interest payment divided by the Original UPB of
the class.
Blank 1(x) 201
Deferred Interest Factor 18 9.7 202-210 Factor representing any increase in residual class
due to credit enhancement requirements. This is
determined by dividing the increase amount by
the original UPB.
Blank 1(x) 211
Ending Principal Balance 19 9.7 212-220 Ending UPB divided by original UPB.
Factor
Blank 1(x) 221
Remaining Unpaid Interest 20 13.2 222-234 If interest should be due, but not received on a
given amount, then that amount should be
entered.
EXHIBIT R
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 ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as
trustee of the Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5, as purchaser (the "Trustee"), and pursuant to the Pooling and
Servicing Agreement, dated as of July 1, 2002 (the "Agreement") among the
Depositor, Option One Mortgage Corporation as master servicer (the "Master
Servicer"), the Federal Home Loan Mortgage Corporation, as guarantor with
respect to the Class A-1 Certificates and the Class S-1 Certificates (the
"Guarantor") and the Trustee agree to the sale by the Depositor and the purchase
by the Trustee, on behalf of the Trust, of the Mortgage Loans listed on the
attached Schedule of Subsequent 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, 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 Subsequent 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 set forth in Section 2.10 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.
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.
OPTION ONE MORTGAGE ACCEPTANCE
CORPORATION
By:_____________________________
Name:
Title:
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By:_____________________________
Name:
Title:
Attachments
-----------
A. Additional terms of sale.
B. Schedule of Subsequent Mortgage Loans.
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 Subsequent Cut-off Date are true
and correct: (i) such Subsequent Mortgage Loan may not be 30 or more days
delinquent as of the related Subsequent Cut-off Date and such Subsequent
Mortgage Loan may not have been 30 or more days delinquent since origination;
(ii) the original term to stated maturity of such Subsequent Mortgage Loan will
not be less than _____ months and will not exceed 360 months; (iii) such
Subsequent Mortgage Loan will not have a Loan-to-Value ratio greater than
_____%; (iv) all such Subsequent Mortgage Loans will have, as of the applicable
Cut-off Date, a weighted average term since origination not in excess of 2
months; (v) such Subsequent Mortgage Loan will have an adjustable Mortgage Rate
that is not less than _____% per annum; (vi) such Subsequent Mortgage Loan will
have a Gross Margin not less than _____%; (vii) such Subsequent Mortgage Loan
must have a Maximum Mortgage Rate not less than _____%; (viii) such Subsequent
Mortgage Loan must have a Minimum Rate not less than %; (ix) such Subsequent
Mortgage Loan may not provide for negative amortization; (xi) such Subsequent
Mortgage Loan shall have been serviced by the Master Servicer since originated
or purchased by the Depositor; (xii) such Subsequent Mortgage Loan must have a
first payment date occurring on or before [month/year] and (xiii) such
Subsequent Mortgage Loan shall have been underwritten in accordance with the
Originator's underwriting criteria as described in the Information Circular.
C. Following the purchase of any Subsequent Mortgage Loan by the Trust
all of the Mortgage Loans (including such Subsequent Mortgage Loans) as of the
Subsequent Cut-off Date: (i) will have a weighted average original term to
stated maturity of not more than 360 months, (ii) will have a weighted average
term since origination not in excess of - months; (iii) will have a weighted
average Mortgage Rate of not less than _____%, (iv) will have a weighted average
Loan-to-Value Ratio of not more than _____%, (v) will have a weighted average
Gross Margin that is not less than approximately _____%, (vi) will have a
weighted average Maximum Mortgage Rate of not less than %, (vii) will have a
weighted average Minimum Mortgage Rate of not less than _____%, (viii) will have
no Mortgage Loan with a Principal Balance that does not conform to ▇▇▇▇▇▇▇ Mac
guidelines, (ix) will be secured by Mortgaged Properties in any one state
representing no more than_____ % of the aggregate Principal Balance thereof, (x)
will be secured by Mortgaged Properties in any one zip code representing no more
than _____% of the aggregate Principal Balance thereof, (xi) will be secured by
non-owner-occupied Mortgaged Properties representing no more than _____% of the
aggregate Principal Balance thereof, (xii) will be secured by two- to
four-family Mortgaged Properties representing no more than _____% of the
aggregate Principal Balance thereof, (xiii) will have a weighted average FICO
score of the related mortgagor of not less than ______,
(xiv) will have a cash-out refinance loan purpose representing no more than
_____% of the aggregate Principal Balance of all of the Mortgage Loans, (xv)
will have Prepayment Charge provisions representing no less than _____% of the
aggregate Principal Balance of all of the Mortgage Loans, (xvi) will have an
Originator's risk grade of CC representing no more than _____% of the aggregate
Principal Balance of all of the Mortgage Loans, (xvii) will have Mortgage Loans
with an Originators risk grade of C representing no more than _____% of the
aggregate Principal Balance thereof, (xviii) will have Mortgage Loans with an
Originators risk grade of B representing no more than _____% of the aggregate
Principal Balance thereof, (xix) will have Mortgage Loans with a Loan-to-Value
Ratio at origination of 80.00% representing no more than _____% of the aggregate
Principal Balance thereof, (xx) will have Mortgage Loans with a Loan-to-Value
Ratio at origination in excess of 80.00% representing no more than _____% of the
aggregate Principal Balance thereof, (xxi) will have Mortgage Loans with a
Loan-to-Value Ratio at origination in excess of 90.00% representing no more than
% of the aggregate Principal Balance thereof, (xxii) will have Mortgage Loans
with a Loan-to-Value Ratio at origination in excess of 95.00% representing no
more than _____% of the aggregate Principal Balance thereof, (xxiii) will have
been underwritten in accordance with the Originators Full Documentation Program
representing not less than _____% of the aggregate Principal Balance thereof,
(xxiv) will have been underwritten in accordance with the Originators Stated
Income Documentation Program representing not more than % of the aggregate
Principal Balance thereof, (xxv) will have been underwritten in accordance with
the Originators Mortgage Credit Only Program representing not more than _____%
of the aggregate Principal Balance thereof, in each case, as applicable, by
aggregate Stated Principal Balance of the Mortgage Loans as of the applicable
Subsequent Cut-off Date, (xxvi) no more than _____% of the aggregate Principal
Balance thereof will have their first adjustment six months following their date
of origination, no less than _____% and no more than _____% of the aggregate
Principal Balance thereof will have their first adjustment 2 years following
their date of origination and the remainder of the Mortgage Loans will have
their first adjustment 3 years following their date of origination and (xviii)
will have an average prepayment period of approximately _____ months.
D. In the sole discretion of the Guarantor, Subsequent Mortgage Loans
with characteristics varying from those set forth above may be purchased by the
Trust; provided, however that the addition of such Mortgage Loans will not
materially affect the aggregate characteristics of the Mortgage Pool.
ATTACHMENT B
SCHEDULE OF SUBSEQUENT MORTGAGE LOANS
(Available Upon Request)
EXHIBIT S
FORM OF ADDITION NOTICE
___________, 2002
▇▇▇▇▇ Fargo Bank Minnesota, National Association.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of July 1, 2002 (the
"Agreement") among the Depositor, Option One Mortgage
Corporation as master servicer (the "Master Servicer"), the
Federal Home Loan Mortgage Corporation, as guarantor with
respect to the Class A-1 Certificates and the Class S-1
Certificates (the "Guarantor") and ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, a national banking association, as
Trustee (the "Trustee"), National Association, relating to
Option One Mortgage Loan Trust 2002-5, Asset-Backed
Certificates, Series 2002-5
--------------------------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.10 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:
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:_________________________
Name:
Title:
EXHIBIT T
FORM OF SPECIAL SUB-SERVICING AGREEMENT
SPECIAL SUBSERVICING AGREEMENT
------------------------------
This SPECIAL SUBSERVICING AGREEMENT (the "AGREEMENT") is made and
entered into as of July 30, 2002, among Option One Mortgage Corporation, as
master servicer (the "COMPANY"), Credit-Based Asset Servicing and Securitization
LLC, as holder of the Class B Certificates identified on Schedule I (the "CLASS
B HOLDER") and ▇▇▇▇▇▇ Loan Servicing LP, an affiliate of the Class B Holder, as
special subservicer (the "SPECIAL SUBSERVICER").
PRELIMINARY STATEMENT
---------------------
WHEREAS, the Class B Holder is the holder of a 100% interest in the
class of Mortgage Pass-Through Certificates (the "CLASS B CERTIFICATE") of the
series of issuance (the "SERIES") identified on Schedule I attached hereto (the
"SCHEDULE I").
WHEREAS, the Class B Certificates were issued pursuant to the Pooling
and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT") identified on
Schedule I and evidences an ownership interest in a pool of Mortgage Loans.
WHEREAS, the Company is the Master Servicer of the Mortgage Loans
related to the Series and the Mortgage Loans are serviced in accordance with the
Pooling and Servicing Agreement.
WHEREAS, in connection with the purchase by Class B Holder of the
Series of Class B Certificates, the Class B Holder and the Company have agreed
that (i) with respect to Mortgage Loans of the Series that become 30 or more
days delinquent (MBA methodology) (each such Mortgage Loan, a "DELINQUENT
MORTGAGE LOAN"), the Company will provide to the Class B Holder certain
information with respect to such Delinquent Mortgage Loan, and (ii) the Class B
Holder, as owner of 100% of the Class B Certificates of the Series, and the
Company have elected to have the Mortgage Loans of the Series which are 60 or
more days delinquent (MBA methodology) (each such Mortgage Loan, a "SPECIALLY
SERVICED MORTGAGE LOAN") serviced by the Special Subservicer.
NOW THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, the Company, the Class B Holder and the Special
Subservicer hereby agree as follows:
ARTICLE I
---------
DEFINITIONS
-----------
Section 1.01 DEFINITIONS INCORPORATED BY REFERENCE.
Capitalized terms used but not otherwise defined in this Agreement
shall have the respective meaning ascribed thereto as set forth in the Pooling
and Servicing Agreement.
1
ARTICLE II
----------
DESIGNATION OF SPECIALLY SERVICED MORTGAGE LOANS AND SPECIAL
------------------------------------------------------------
SERVICING PROCEDURES
--------------------
Section 2.01 AFFILIATES OF THE CLASS B HOLDER.
One or more Affiliates of the Class B Holder may have an interest in
the Class B Certificates and all such holders in the aggregate shall be deemed
to be the Class B Holder for purposes of this Agreement; provided, however, to
the extent that one or more Affiliates of the Class B Holder has an interest in
the Class B Certificate, Credit-Based Asset Servicing and Securitization LLC
shall continue to manage the investment of any Affiliate in the Class B
Certificates.
Section 2.02 SPECIALLY SERVICED MORTGAGE LOANS.
(a) To the extent and for so long as the Class B Certificates of the
Series are outstanding, the Class B Holder owns 100% of the Class B Certificates
of the Series and the Special Subservicer remains an Affiliate of the Class B
Holder, Mortgage Loans of the Series which are 60 or more days delinquent shall
be designated in writing by the Company as Specially Serviced Mortgage Loans and
transferred by the Company to the Special Subservicer for servicing. The Special
Subservicer shall service the Specially Serviced Mortgage Loans in accordance
with the terms hereof and the Pooling and Servicing Agreement. In the event of
any conflict between the terms of this Agreement and the Pooling and Servicing
Agreement, the Pooling and Servicing Agreement shall control. This Agreement is
a "Sub-Servicing Agreement" as defined in the Pooling and Servicing Agreement.
Any provision required by the Pooling and Servicing Agreement to be included in
a Sub-Servicing Agreement shall be deemed to be included in this Agreement.
Following the designation of a Mortgage Loan as a Specially Serviced
Mortgage Loan, the Company shall transfer servicing of such Mortgage Loan to the
Special Subservicer substantially in the manner set forth herein and in Schedule
II hereto unless the delinquency is cured while in the pending service release
pool, prior to 24th day of the month of release. In the instance of a
delinquency cure as described in the preceding sentence, the Company will be
responsible for sending an "oops" notice to the Special Subservicer canceling
the servicing transfer to and advising the Special Subservicer of the withdrawal
of such Delinquent Mortgage Loan from the pending service release pool.
The parties hereto agree that any fees resulting from the transfer of
the servicing of a Mortgage Loan from the Company or a subservicer to the
Special Subservicer (or any successor thereto) shall be the sole obligation of
the Company without reimbursement from the Trust Fund. The fees to be paid by
the Company to the Special Subservicer shall be set forth on Schedule II hereto.
(b) As of the Effective Date (as defined below) of each Specially
Serviced Mortgage Loan, the Special Subservicer shall succeed to and undertake
all rights, duties and obligations of the
2
Company, as Master Servicer under the Pooling and Servicing Agreement, or the
successor master servicer (including, without limitation, the making of
advances, any right to purchase such Specially Serviced Mortgage Loan at the
purchase price set forth in the Pooling and Servicing Agreement and the right to
receive, without duplication, the servicing fee, be reimbursed for any advances,
and retain additional servicing compensation with respect to such Specially
Serviced Mortgage Loan) pursuant to and in accordance with the terms of the
Pooling and Servicing Agreement. The Special Subservicer shall remit collections
and provide all loan level information as required in the Pooling and Servicing
Agreement to the Company at least one business day prior to the date such
collections and/or information is required to be delivered by the Company to the
Trustee.
With respect to each Specially Serviced Mortgage Loan, the effective
date (the "Effective Date") shall be the first day of the month immediately
following the month of designation of such Specially Serviced Mortgage Loan as
such, provided that such written designation is received by the Company from the
Special Subservicer on or prior to the 15th calendar day of such month.
(c) The Company acknowledges that the Special Subservicer or an
Affiliate may receive usual and customary real estate referral fees from real
estate brokers in connection with the listing and disposition of REO Property.
(d) Once a Mortgage Loan becomes a Specially Serviced Mortgage Loan,
such Mortgage Loan shall remain a Specially Serviced Mortgage Loan, and shall
continue to be serviced by the Special Subservicer, regardless of delinquency
status, whether the related Mortgaged Property becomes an REO Property or
otherwise, until the earlier of the liquidation or other disposition of such
Specially Serviced Mortgage Loan or the termination of this Agreement; provided,
however, that if the Company exercises its right as Master Servicer to purchase
all of the Mortgage Loans in the Trust Fund pursuant to the optional termination
provision under the Pooling and Servicing Agreement, the servicing of any
related Specially Serviced Mortgage Loans with respect to which foreclosure
proceedings have not been commenced shall be transferred promptly by the Special
Subservicer to the Company in accordance with written instructions from the
Company.
(e) If the Class B Holder transfers a percentage interest in the Class
B Certificates of the Series such that the Class B Holder owns less than 100% of
the then outstanding Certificate Principal Balance of such class, the Class B
Holder shall promptly notify the Company, the Guarantor and the Special
Subservicer in writing of any such transfer. Upon receipt of written notice from
the Class B Holder, the Company or the Class B Holder shall revise Schedule I
hereto to reflect any such transfer and shall forward promptly a copy of such
revised schedule to the Company or the Class B Holder, as applicable, the
Special Subservicer and the Guarantor.
(f) If and to the extent the Company is permitted to purchase
Delinquent Mortgage Loans under the Pooling and Servicing Agreement, the Class B
Holder may direct the Company to purchase any delinquent Specially Serviced
Mortgage Loan and to promptly resell such Mortgage Loan to the Class B Holder at
the price and on the terms set forth in the Pooling and Servicing Agreement. In
the event the Class B Holder directs the Company to purchase a Specially
Serviced
3
Mortgage Loan as permitted under this Section, the Company shall promptly take
all action necessary under the terms of the Pooling and Servicing Agreement in
order to accomplish such purchase (including, without limitation, provide
notification to the Trustee and/or Custodian) and such resale of the Specially
Serviced Mortgage Loan to the Class B Holder. The Class B Holder, and not the
Company, shall be required to remit the purchase price (as provided under the
Pooling and Servicing Agreement) for such Specially Serviced Mortgage Loan to
the Trustee. The Company will inform the Trustee in writing of the purchase of
such Specially Serviced Mortgage Loan by the Class B Holder and further shall
promptly take all actions necessary or desirable to effect the conveyance of
such Mortgage Loan and the related servicing rights to the Class B Holder or its
designee, time being of the essence.
(g) Notwithstanding any provision herein to the contrary, the Special
Subservicer shall (i) in no event be obligated to effect any cure or remedy in
connection with a deficiency in the documentation for any Specially Serviced
Mortgage Loan to the extent such deficiency existed at the time such Mortgage
Loan became a Specially Serviced Mortgage Loan, which obligations will remain
the Company's responsibility or (ii) have no responsibility for any obligations,
duties, or liabilities of the Company with respect to the servicing of a
Specially Serviced Mortgage Loan that arose prior to the related Effective Date
for such Specially Serviced Mortgage Loan, other than those which would
customarily be assumed after the Effective Date.
Section 2.03 TERMINATION OF SPECIAL SUBSERVICER FOR DEFAULT.
The Company shall have the right, immediately upon written notice, to
terminate the Special Subservicer's right and obligation to subservice all of
the Specially Serviced Mortgage Loans hereunder in the event (each such event,
an "EVENT OF DEFAULT") of:
(i) any failure by the Special Subservicer to remit to the Company
for distribution to the Certificateholders of the Series any
payment (including without limitation, any failure to make any
required Advance) 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,
requiring the same to be remedied, shall have been given to the
Special Subservicer by the Company; or
(ii) any failure on the part of the Special Subservicer duly to
observe or perform in any material respect any other of the
covenants or agreements on the part of the Special Sub-Servicer
contained in this Agreement (including any breach of the Special
Servicer's representations and warranties contained in Section
4.03 hereof) which materially and adversely affects the interests
of the Certificateholders and the Guarantor of the Series which
continues unremedied for a period of 30 days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Special Subservicer by the
Company; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in an involuntary case under any present or
future federal or state bankruptcy,
4
insolvency or similar law or the appointment of a conservator or
receiver or liquidator 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 Special Subservicer and such decree or order
shall have remained in force undischarged or unstayed for a
period of 60 consecutive days; or
(iv) the Special Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Special Subservicer or
of or relating to all or substantially all of its property; or
(v) the Special Subservicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to
take advantage of or otherwise voluntarily commence a case or
proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of
its obligations.
If an Event of Default as described in clauses (iii), (iv) or (v) above
shall occur, then, and in each and every such case, upon receipt of written
notice pursuant to Section 1.04 of Pooling and Servicing Agreement, as
applicable, from the Company, the NIMS Insurer or the Guarantor, the Special
Subservicer shall immediately remit to the Company all amounts in the Collection
Accounts and the Escrow Accounts and all rights of the Special Subservicer to
service the Specially Serviced Mortgage Loans shall terminate. If an Event of
Default as described in clauses (i) or (ii) above shall occur, or a termination
shall occur pursuant to the immediately following paragraph, then, and in each
and every such case, upon receipt of written notice pursuant to Section 1.04 of
the Pooling and Servicing Agreement from the Company, the NIMS Insurer or the
Guarantor, as applicable, the Special Subservicer shall immediately remit to the
Company all amounts in the Collection Accounts and the Escrow Accounts and all
rights of the Special Subservicer to service the Specially Serviced Mortgage
Loans of the Series shall terminate. Following the receipt of written notice
from the Company as provided above upon the occurrence of an Event of Default,
all authority and power of the Special Subservicer to subservice all the
Specially Serviced Mortgage Loans shall revert to and be vested in the Company
pursuant to and under this Section 2.03, and the Special Subservicer shall do
all things necessary to effect a transfer of the servicing rights back to the
Company. In this regard, the Company is hereby authorized and empowered to
execute and deliver, on behalf of the Special Subservicer, 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 or assignment of the affected Specially Serviced Mortgage Loans and
related documents, or otherwise. The Special Subservicer agrees to cooperate
with the Company in implementing the termination of the Special Subservicer's
responsibilities and rights hereunder to the extent required by this Section
2.03, including, without limitation, the transfer to the Company or its
appointed agent for administration by it of all amounts in the possession of the
Special Subservicer or thereafter received with respect to all of
5
the Specially Serviced Mortgage Loans serviced hereunder in the case of an Event
of Default or in the event of a termination described in the immediately
following paragraph and the transfer of the related Servicing Rights back to the
Company.
In addition, notwithstanding the foregoing, pursuant to Section 1.04 of
the Pooling and Servicing Agreement, the Guarantor and the NIMS Insurer, as
applicable, shall have the right to terminate the Special Subservicer (i) due to
any Event of Default pursuant to this Section 2.03, (ii) if the Special
Subservicer is no longer an approved servicer of the Guarantor, (iii) if the
Special Subservicer fails to maintain a servicer rating in one of the two
highest rating categories from (A) Fitch Ratings and (B) another nationally
recognized rating agency, (iv) if the Class B Holder no longer owns a 100%
interest in the Class B Certificate or (v) the Class B Holder and Special
Subservicer cease to be Affiliates. Notwithstanding the waiver by the Guarantor
and the NIMS Insurer of its right to terminate pursuant to the immediately
preceding sentence, upon the occurrence of any of the events in the immediately
preceding sentence, pursuant to Section 1.04 of the Pooling and Servicing
Agreement, the Guarantor or the NIMS Insurer, as applicable, shall have the
right to terminate the Special Subservicer at will and in their sole discretion.
Section 2.04 APPOINTMENT OF SUCCESSOR SPECIAL SUBSERVICER.
The Class B Holder shall have the right, upon 90 days prior written
notice to the Company and the Special Subservicer, to appoint a successor
special subservicer meeting the requirements set forth in clauses (i), (ii),
(iii) and (iv) below and approved in writing by the Trustee, NIMS Insurer and
Guarantor (pursuant to the provisions of Section 1.04 of the Pooling and
Servicing Agreement, as applicable). Any such successor special subservicer
shall succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Special Subservicer under this Agreement simultaneously with
the termination of the Special Subservicer's responsibilities, duties and
liabilities under this Agreement. In the event that the Special Subservicer's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the foregoing, the Special Subservicer shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The removal of the Special
Subservicer shall not become effective until a successor shall be appointed
pursuant to this Section and shall in no event relieve the Special Subservicer
of the representations and warranties made pursuant to Section 4.03 and the
remedies available to the Class B Holder and/or the Company under Sections 4.04
and 5.01, it being understood and agreed that the provisions of such Sections
4.04 and 5.01 shall be applicable to the Special Subservicer notwithstanding any
such termination of it, or the termination of this Agreement. In the event that
a successor special servicer is not appointed pursuant to this Section within
120 days of the Class B Holder providing notice as set forth in this Section,
the rights to subservice the Mortgage Loans shall revert to the Company, as
Master Servicer, pursuant to the Pooling and Servicing Agreement; provided,
however, with the written consent of the Company, the Special Subservicer, the
Trustee, the NIMS Insurer and the Guarantor, such 120 day period may be extended
for an additional 45 days
6
if the Class B Holder demonstrates that a successor special subservicer shall be
appointed within such 45 day period.
Any successor special subservicer shall (i) be an institution having a
net worth of not less than $1,000,000, (ii) not result in the downgrading in any
rating by any applicable rating agency of any security issued in connection with
the Pooling and Servicing Agreement, (iii) be approved as a seller/servicer of
single-family mortgage loans by the Guarantor, and (iv) have and keep in full
effect its existence, rights and franchises as a corporation (or such other
corporate form), and shall obtain its qualification to do business as a foreign
corporation (or such other corporate form) in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Specially Serviced Mortgage Loans
and to perform its duties under this Agreement. Any successor appointed as
provided herein shall execute, acknowledge and deliver to the Class B Holder,
the Company, the Trustee, the NIMS Insurer and the Guarantor an instrument
accepting such appointment, wherein the successor shall make the representations
and warranties set forth in Section 4.03, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities, obligations
and liabilities of the Special Subservicer, with like effect as if originally
named as a party to this Agreement; provided, however, notwithstanding Section
2.03, any such successor special subservicer may be terminated without cause by
the Guarantor at any time.
Within 30 days of the appointment of a successor special subservicer by
the Class B Holder, the Special Subservicer shall prepare, execute and deliver
to the successor entity any and all documents and other instruments, place in
such successor's possession all servicing files related to the Specially
Serviced Mortgage Loans, and do or cause to be done all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
including but not limited to the transfer and endorsement of the related
Mortgage Notes and other documents, and the Class B Holder shall do or cause to
be done the preparation and recordation of Assignments of Mortgage and deeds at
the Class B Holder's sole expense.
The Special Subservicer shall cooperate with the Class B Holder and
such successor in effecting the termination of the Special Subservicer's
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor special subservicer, including without
limitation, the transfer to such successor of all amounts received by it with
respect to the Specially Serviced Mortgage Loans. Further, the Special
Subservicer shall execute and deliver such instruments and do such other things
as may reasonably be required to more fully and definitively vest in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Special Subservicer.
7
ARTICLE III
-----------
DELINQUENT MORTGAGE LOANS OTHER THAN SPECIALLY SERVICED MORTGAGE LOANS
----------------------------------------------------------------------
Section 3.01 REPORTING OF DELINQUENT MORTGAGE LOANS.
(a) To the extent and for so long as the Class B Certificates of the
Series are outstanding and a 100% interest in such Class B Certificates is held
by the Class B Holder or the Special Subservicer is subservicing any Mortgage
Loans, the Company, as Master Servicer of the Mortgage Loans related to the
Series, hereby agrees to provide to the Class B Holder and the Special
Subservicer a report, in tape format, containing the following information
within three (3) Business Days after each Distribution Date:
(1) With respect to the Series, the number and aggregate Principal
Balance of the Mortgage Loans delinquent one, two and three
months or more, together with the Principal Balance of each
Mortgage Loan delinquent, one, two and three months or more;
(2) With respect to the Series, the (i) number and aggregate
Principal Balance of Mortgage Loans with respect to which
foreclosure proceedings have been initiated, and (ii) the number
and aggregate book value of Mortgaged Properties acquired through
foreclosure, deed in lieu of foreclosure or other exercise of
rights respecting the Trustee's security interest in the Mortgage
Loans, and with respect to each Mortgage Loan, the (i) Principal
Balance of each such Mortgage Loan with respect to which
foreclosure proceedings have been initiated, and (ii) the book
value of each Mortgaged Property acquired through foreclosure,
deed in lieu of foreclosure or other exercise of rights
respecting the Trustee's security interest in the related
Mortgage Loan; and
(3) With respect to the Series, the amount of Realized Losses
allocable to the Certificates on the related Distribution Date
and the cumulative amount of Realized Losses allocated to such
Certificates since the Cut-off Date, and with respect to each
Mortgage Loan, the amount of Realized Losses attributable to such
Mortgage Loan on the related Distribution Date and the cumulative
amount of Realized Losses attributable to such Mortgage Loan
since the Cut-off Date.
To the extent such information is included in or with the monthly
statements to Certificateholders pursuant to the Pooling and Servicing
Agreement, the Company may forward such monthly statement to the Class B Holder
in satisfaction of the foregoing obligations. In addition, the Company, as
Master Servicer of the Mortgage Loans, shall send, or shall cause the related
servicer to send, to the Class B Holder all other written reports,
documentation, instruments, certificates and correspondences provided by a
servicer with respect to any Delinquent Mortgage Loan.
8
(b) If requested by the Class B Holder, the Company shall make its
servicing personnel available to respond to reasonable inquiries, by phone or in
writing by facsimile, electronic, or overnight mail transmission, in connection
with any Mortgage Loan identified in any report or document provided pursuant to
clause (a) above; provided, that the Company shall only be required to provide
information that is reasonably accessible to its servicing personnel (or its
subservicers).
(c) In addition to the information described above, the Company shall
provide to the Class B Holder such information as the Class B Holder may
reasonably request; provided, however, that the Mortgage Loans are Delinquent
Mortgage Loans or the Mortgaged Property has been foreclosed upon. The Class B
Holder will reimburse the Company for any reasonable out-of-pocket expenses
incurred by it in providing such information.
Section 3.02 SERVICING OF SPECIALLY SERVICED MORTGAGE LOANS.
(a) Prior to the Commencement of Foreclosure of any Specially Serviced
Mortgage Loan, the Company or the Special Subservicer, as applicable, shall
provide the Class B Holder with a notice (sent by telecopier) of such proposed
and imminent foreclosure, stating the loan number and the aggregate amount due
under the related Mortgage Note.
For purposes of this Agreement, "COMMENCEMENT OF FORECLOSURE" shall
mean the first official action required under local law in order to commence
foreclosure proceedings or to schedule a trustee's sale under a deed of trust,
including (i) in the case of a mortgage, any filing or service of process
necessary to commence an action to foreclosure, or (ii) in the case of a deed of
trust, posting, the publishing, filing or delivery of a notice of sale, but not
including in either case (x) any notice of default, notice of intent to
foreclose or sell or any other action prerequisite to the actions specified in
(i) or (ii) above, (y) the acceptance of a deed-in-lieu of foreclosure (whether
in connection with a sale of the related property or otherwise) or (z)
initiation and completion of a short pay-off.
(b) To the extent and for so long as the Class B Certificates of the
Series are outstanding and the Class B Holder owns 100% of the Class B
Certificates of the Series, with respect to any Specially Serviced Mortgage Loan
for which a notice under clause (a) above has been delivered to the Class B
Holder, the Class B Holder shall provide the Company or the Special Subservicer,
as applicable, with written direction as to the action to be taken with respect
to such Specially Serviced Mortgage Loan (to the extent permitted under the
Pooling and Servicing Agreement and this Agreement), including, without
limitation, to proceed with foreclosure, to accept a deed-in-lieu of
foreclosure, to consent to a pre-foreclosure sale of the related Mortgaged
Property at a loss, or, if permitted under the terms of the Pooling and
Servicing Agreement, to purchase such Specially Serviced Mortgage Loan. Such
written direction must be received by the Company or the Special Subservicer, as
applicable, within two (2) Business Days of transmission of the notice provided
by the Company under clause (a) above. Such two (2) Business Day period shall be
extended for no longer than an additional three (3) Business Days after the
receipt of additional information requested if the Class B Holder requests
additional information related to such Specially Serviced Mortgage Loan;
provided, however that the Class B Holder will have at least one Business Day to
9
provide written direction after receipt of any requested additional information.
Any such additional information shall be provided only to the extent it is
obtainable by the Company from existing reports, certificates or statements or
otherwise be reasonably accessible to its servicing personnel (or subservicing
personnel). To the extent such action is not inconsistent with the terms of the
Pooling and Servicing Agreement or the Company's duties thereunder as master
servicer, or the Special Subservicer's duties hereunder or thereunder, the
Company or the Special Subservicer, as applicable, shall as promptly as
practicable carry out the instruction of the Class B Holder in the manner
prescribed in such written direction. The Class B Holder agrees that it has no
right to negotiate directly with the Mortgagor during such period.
In the event the Class B Holder fails to provide any written direction
as provided above, the Company or the Special Subservicer, as applicable, may
take any such action as would be consistent with customary servicing practices
of prudent mortgage loan servicers and the Company's or the Special
Subservicer's, as applicable, normal policies and practice.
(c) To the extent and for so long as the Class B Certificates of the
Series are outstanding and the Class B Holder owns 100% of the Class B
Certificates of the Series, with respect to any Specially Serviced Mortgage Loan
for which the Company or the Special Subservicer has not provided a notice as
contemplated in clause (a) above, the Class B Holder may, at any time, provide
the Company or the Special Subservicer, as applicable, with written direction as
to the action to be taken with respect to such Specially Serviced Mortgage Loan
(to the extent permitted under the Pooling and Servicing Agreement and this
Agreement), including, without limitation, to commence foreclosure proceedings,
to accept a deed-in-lieu of foreclosure, to consent to a sale of a Mortgaged
Property at a loss, or, if permitted under the terms of the Pooling and
Servicing Agreement, to purchase such Specially Serviced Mortgage Loan. To the
extent such action is not inconsistent with the terms of the Pooling and
Servicing Agreement or the Company's duties thereunder as master servicer, or
the Special Subservicer's duties hereunder or thereunder, the Company or the
Special Subservicer, as applicable, shall as promptly as practicable carry out,
or cause the Company or Special Subservicer, as applicable, to carry out, the
instruction of the Class B Holder in the manner prescribed in such written
direction.
(d) Any foreclosure of a Specially Serviced Mortgage Loan that has been
initiated in accordance with clauses (b) or (c) above may be discontinued if (i)
the Specially Serviced Mortgage Loan has been brought current or if a
refinancing or prepayment occurs with respect to the Specially Serviced Mortgage
Loan (including by means of a short payoff approved by the Class B Holder), (ii)
the Company or the Special Subservicer, as applicable, has agreed to the terms
of a forbearance agreement with the Mortgagor, or (iii) if and to the extent
otherwise permitted under the Pooling and Servicing Agreement, Class B Holder
directs the Company to purchase such Specially Serviced Mortgage Loan at the
price and on the terms set forth in the Pooling and Servicing Agreement.
(e) In the event the Class B Holder directs the Company or the Special
Subservicer, as applicable, to purchase a Specially Serviced Mortgage Loan as
permitted under Sections 2.02 and 3.02 (b), (c) and (d), the Class B Holder may
direct the Company or the Special Subservicer, as
10
applicable, to purchase such Specially Serviced Mortgage Loan and to promptly
resell such Specially Serviced Mortgage Loan to the Class B Holder at the price
and on the terms set forth in the Pooling and Servicing Agreement. In the event
the Class B Holder directs the Company or the Special Subservicer, as
applicable, to purchase a Specially Serviced Mortgage Loan as permitted under
this Section, the Company or the Special Subservicer, as applicable, shall
promptly take all action necessary under the terms of the Pooling and Servicing
Agreement in order to accomplish such purchase (including, without limitation,
provide notification to the Trustee and/or Custodian) and to resell such
Specially Serviced Mortgage Loan to the Class B Holder. The Class B Holder, and
not the Company, shall be required to remit the purchase price for such
Specially Serviced Mortgage Loan to the Trustee pursuant to the provisions of
the Pooling and Servicing Agreement. The Company will inform the Trustee in
writing of the purchase of such Specially Serviced Mortgage Loan by the Class B
Holder and further shall promptly take all actions necessary or desirable to
effect the conveyance of such Mortgage Loan and the related servicing rights to
the Class B Holder or its designee, time being of the essence. The parties
hereto agree that, in connection with a purchase of a Specially Serviced
Mortgage Loan as provided above, any fees resulting from the transfer of the
servicing of such purchased Specially Serviced Mortgage Loan from the Company or
a subservicer to a servicer designated by the Class B Holder shall be the
obligation of the Company. The Class B Holder shall not use any procedures in
selecting Delinquent Mortgage Loans to be purchased which is materially adverse
to the other Certificateholders or the Guarantor.
Section 3.03 REVIEW OF THE COMPANY'S PROCEDURES.
The Company hereby agrees that the Class B Holder shall have the right,
at its own expense and during normal business hours, to review any and all of
the books, records, or other information of the Company which may be relevant to
the Company's direct collection, loss mitigation foreclosure and REO management
procedures currently in place in order to confirm that the procedures used by
the Company and its subservicers are in accordance with the customary servicing
practices of prudent mortgage loan servicers. In order to discuss such books,
records or other information, the Company shall make personnel available who are
knowledgeable about such matters.
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES
------------------------------
Section 4.01 ORGANIZATIONAL AND OTHER RELATED WARRANTIES OF THE CLASS B HOLDER.
The Class B Holder hereby makes the following representations and warranties to
the Company, the Guarantor and the Special Subservicer:
(i) ORGANIZATION AND GOOD STANDING. The Class B Holder is an entity
duly organized, validly existing, and in good standing under the laws of its
state of incorporation or formation or the laws of the United States.
11
(ii) NO VIOLATION. Neither the execution and delivery by the Class B
Holder of this Agreement, nor the consummation by the Class B Holder of the
transactions contemplated hereby, nor the performance of and compliance by the
Class B Holder with the provisions of this Agreement, will conflict with or
result in a breach or violation of, or constitute a default (or an event which,
with notice or the lapse of time, or both, would constitute a default) under,
the organizational documents (its articles of incorporation or charter or
by-laws) of the Class B Holder, or any of the provisions of any law, rule,
regulation, judgment, decree, demand, or order (of any federal, state, or local
governmental or regulatory authority or court) binding on the Class B Holder, or
any of its respective properties, or any of the provisions of any indenture,
mortgage, contract, instrument, or other document to which the Class B Holder is
a party or by which it is bound, or result in the creation or imposition of any
lien, charge, or encumbrance upon any of their respective properties pursuant to
the terms of any indenture, mortgage, contract, instrument, or other document.
The Class B Holder is not otherwise in violation of any law, rule, regulation,
judgment, decree, demand, or order (of any federal, state or local governmental
or regulatory authority or court), which violation, in the Class B Holder's,
good faith and reasonable judgment, is likely to affect materially and adversely
its ability to perform its obligations hereunder.
(iii) AUTHORIZATION AND ENFORCEABILITY. The execution and delivery by
the Class B Holder of this Agreement, the consummation of the transactions
contemplated hereby, and the performance and compliance by the Class B Holder
with the terms hereof are within the powers of the Class B Holder, and have been
duly authorized by all necessary action on the part of the Class B Holder. All
organizational resolutions and consents necessary for the Class B Holder to
enter into and consummate all transactions contemplated hereby have been
obtained. This Agreement has been duly executed and delivered by the Class B
Holder and constitutes the legal, valid and binding obligation of the Class B
Holder, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, and other similar
laws affecting creditors' rights generally, and to general principles of equity,
regardless of whether such enforcement is considered in a proceeding in equity
or at law. The Class B Holder has not failed to obtain any consent, approval,
authorization, or order of, or failed to cause any registration or qualification
with, any court or regulatory authority or other governmental body having
jurisdiction over it, which consent, approval, authorization, order,
registration, or qualification is required for, and the absence of which would
materially adversely affect, the legal and valid execution, delivery, and
performance of this Agreement by the Class B Holder.
(iv) NO LITIGATION OR ADVERSE CONDITIONS. No litigation is pending or,
to the best of the Class B Holder's knowledge, threatened against it, which, if
determined adversely to the Class B Holder would prohibit the Class B Holder
from entering into this Agreement or, in the good faith and reasonable judgment
of the Class B Holder, is likely to materially and adversely affect either the
ability of the Class B Holder to perform its obligations hereunder.
(v) AFFILIATE. The Class B Holder is an Affiliate of the Special
Subservicer.
12
Section 4.02 ORGANIZATIONAL AND OTHER RELATED WARRANTIES OF THE
COMPANY. The Company hereby makes the following representations and warranties
to the Class B Holder, the Guarantor and the Special Subservicer:
(i) ORGANIZATION AND GOOD STANDING. The Company is an entity duly
formed, validly existing, and in good standing under the laws of its state of
incorporation or formation or the laws of the United States, and is in
compliance with the laws of each state in which any property is located to the
extent necessary to ensure the enforceability of each Mortgage Loan and to
perform its obligations hereunder and the Pooling and Servicing Agreement.
(ii) NO VIOLATION. Neither the execution and delivery by Company of
this Agreement, nor the consummation by it of the transactions contemplated
hereby, nor the performance of and compliance by the Company with the provisions
hereof or of the Pooling and Servicing Agreement, will conflict with or result
in a breach or violation of, or constitute a default (or an event which, with
notice or the lapse of time, or both, would constitute a default) under, the
organizational documents (its articles of incorporation or charter or by-laws)
of the Company, or any of the provisions of any law, rule, regulation, judgment,
decree, demand, or order (of any federal, state, or local governmental or
regulatory authority or court) binding on the Company, or any of its properties,
or any of the provisions of any indenture, mortgage, contract, instrument, or
other document (including, without limitation, any Pooling and Servicing
Agreement) to which the Company is a party or by which it is bound, or result in
the creation or imposition of any lien, charge, or encumbrance upon any of their
respective properties pursuant to the terms of any indenture, mortgage,
contract, instrument, or other document. The Company is not otherwise in
violation of any law, rule, regulation, judgment, decree, demand, or order (of
any federal, state or local governmental or regulatory authority or court),
which violation, in the Company's good faith and reasonable judgment, is likely
to affect materially and adversely either its ability to perform its obligations
hereunder or under the Pooling and Servicing Agreement, or the financial
condition of the Company.
(iii) AUTHORIZATION AND ENFORCEABILITY. The execution and delivery by
the Company of this Agreement, the consummation of the transactions contemplated
hereby, and the performance and compliance by the Company with the terms hereof
and of the Pooling and Servicing Agreement are within the powers of the Company,
and have been duly authorized by all necessary action on the part of the
Company. All organizational resolutions and consents necessary for the Company
to enter into and consummate all transactions contemplated hereby have been
obtained. This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws affecting
creditors' rights generally, and to general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at law. The
Company has not failed to obtain any consent, approval, authorization, or order
of, or failed to cause any registration or qualification with, any court or
regulatory authority or other governmental body having jurisdiction over the
Company, which consent, approval, authorization, order, registration, or
qualification is
13
required for, and the absence of which would materially adversely affect, the
legal and valid execution, delivery, and performance of this Agreement by the
Company.
(iv) APPROVALS AND PERMITS. The Company possesses such certificates,
authorizations, licenses, and permits issued by the appropriate state, federal,
and foreign regulatory agencies or bodies necessary to conduct the business now
operated by it, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization, or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling, or finding, would materially and adversely affect
the conduct of the business, operations, financial condition, or income of the
Company.
(v) NO LITIGATION OR ADVERSE CONDITIONS. No litigation is pending or,
to the best of the Company's knowledge, threatened against it, which, if
determined adversely to the Company would prohibit the Company from entering
into this Agreement or, in the good faith and reasonable judgment of the
Company, is likely to materially and adversely affect either its ability to
perform its obligations hereunder or under the Pooling and Servicing Agreement
or the financial condition of the Company. The Company has no knowledge of any
recent adverse financial condition or event with respect to itself that, in its
good faith and reasonable judgment, is likely to materially and adversely affect
its ability to perform its obligations hereunder or under the Pooling and
Servicing Agreement.
(vi) FIDELITY BOND; ERRORS AND OMISSION INSURANCE. Each officer,
director, employee, consultant and advisor of the Company with responsibilities
concerning the servicing and administration of the Mortgage Loans is covered by
errors and omissions insurance and fidelity bond insurance in the amounts and
with the coverage required under the Pooling and Servicing Agreement for it to
maintain. Neither the Company nor any of its officers, directors, employees,
consultants, or advisors involved in the servicing or administration of the
Mortgage Loans has been refused such coverage or insurance.
Section 4.03 ORGANIZATIONAL AND OTHER RELATED WARRANTIES OF THE SPECIAL
SUBSERVICER. The Special Subservicer hereby makes the following representations
and warranties to the Company, the Guarantor and the Class B Holder:
(i) ORGANIZATION AND GOOD STANDING. The Special Subservicer is an
entity duly organized, validly existing, and in good standing under the laws of
its state of incorporation or formation or the laws of the United States, and is
in compliance with the laws of each state in which any property is located to
the extent necessary to ensure the enforceability of each Mortgage Loan and to
perform its obligations hereunder.
(ii) NO VIOLATION. Neither the execution and delivery by Special
Subservicer of this Agreement, nor the consummation by it of the transactions
contemplated hereby, nor the performance of and compliance by the Special
Subservicer with the provisions hereof, will conflict with or result in a breach
or violation of, or constitute a default (or an event which, with notice or the
lapse of time, or both, would constitute a default) under, the organizational
documents (its
14
articles of incorporation or charter or by-laws) of the Special Subservicer, or
any of the provisions of any law, rule, regulation, judgment, decree, demand, or
order (of any federal, state, or local governmental or regulatory authority or
court) binding on the Special Subservicer, or any of its properties, or any of
the provisions of any indenture, mortgage, contract, instrument, or other
document to which the Special Subservicer is a party or by which it is bound, or
result in the creation or imposition of any lien, charge, or encumbrance upon
any of their respective properties pursuant to the terms of any indenture,
mortgage, contract, instrument, or other document. The Special Subservicer is
not otherwise in violation of any law, rule, regulation, judgment, decree,
demand, or order (of any federal, state or local governmental or regulatory
authority or court), which violation, in the Special Subservicer's good faith
and reasonable judgment, is likely to affect materially and adversely either its
ability to perform its obligations hereunder, or the financial condition of the
Special Subservicer.
(iii) AUTHORIZATION AND ENFORCEABILITY. The execution and delivery by
the Special Subservicer of this Agreement, the consummation of the transactions
contemplated hereby, and the performance and compliance by the Special
Subservicer with the terms hereof are within the powers of the Special
Subservicer, and have been duly authorized by all necessary action on the part
of the Special Subservicer. All organizational resolutions and consents
necessary for the Special Subservicer to enter into and consummate all
transactions contemplated hereby have been obtained. This Agreement has been
duly executed and delivered by the Special Subservicer and constitutes the
legal, valid and binding obligation of the Special Subservicer, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws affecting
creditors' rights generally, and to general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at law. The
Special Subservicer has not failed to obtain any consent, approval,
authorization, or order of, or failed to cause any registration or qualification
with, any court or regulatory authority or other governmental body having
jurisdiction over the Special Subservicer, which consent, approval,
authorization, order, registration, or qualification is required for, and the
absence of which would materially adversely affect, the legal and valid
execution, delivery, and performance of this Agreement by the Special
Subservicer.
(iv) APPROVALS AND PERMITS. The Special Subservicer possesses such
certificates, authorizations, licenses, and permits issued by the appropriate
state, federal, and foreign regulatory agencies or bodies necessary to conduct
the business now operated by it, and its has not received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization, or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling, or finding, would materially and adversely affect
the ability of the Special Subservicer to service a Mortgage Loan or the
interests of the Certificateholders therein.
(v) NO LITIGATION OR ADVERSE CONDITIONS. No litigation is pending or,
to the best of the Special Subservicer's knowledge, threatened against it,
which, if determined adversely to the Special Subservicer would prohibit the
Special Subservicer from entering into this Agreement or, in the good faith and
reasonable judgment of the Special Subservicer, is likely to materially and
15
adversely affect either its ability to perform its obligations hereunder or the
financial condition of the Special Subservicer. The Special Subservicer has no
knowledge of any recent adverse financial condition or event with respect to
itself that, in its good faith and reasonable judgment, is likely to materially
and adversely affect its ability to perform its obligations hereunder.
(vi) FIDELITY BOND; ERRORS AND OMISSION INSURANCE. Each officer,
director, employee, consultant and advisor of the Special Subservicer with
responsibilities concerning the servicing and administration of the Mortgage
Loans is covered by errors and omissions insurance and fidelity bond insurance
in the amounts and with the coverage required under the Pooling and Servicing
Agreement to be maintained by the Company as master servicer. Neither the
Special Subservicer nor any of its officers, directors, employees, consultants,
or advisors involved in the servicing or administration of the Mortgage Loans
has been refused such coverage or insurance.
(vii) APPROVED SELLER/SERVICER. The Special Subservicer is approved as
a seller/servicer of single-family mortgage loans by the Department of Housing
and Urban Development and the Guarantor.
Section 4.04 REMEDIES FOR BREACH OF REPRESENTATION AND WARRANTY.
Upon discovery by any of the Company, the Class B Holder or the Special
Subservicer of a breach of any of the representations and warranties contained
in Article IV which materially and adversely affects the value of the Specially
Serviced Mortgage Loans or Delinquent Mortgage Loans, the party discovering such
breach shall give prompt written notice to the others.
Each of the parties hereto shall indemnify the others and hold each of
them harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of such party's representations
and warranties contained in Article IV. It is understood and agreed that the
obligations to indemnify as provided in this Section 4.04 constitute the sole
remedies of each of the Company, Class B Holder and Special Subservicer
respecting a breach of any other party's representations and warranties.
Section 4.05 MANDATORY DELIVERY.
Other than the case of Specially Serviced Mortgage Loans which cure
prior to the 24th day in the month of delivery of the Specially Serviced
Mortgage Loans, delivery of a Specially Serviced Mortgage Loan on the 90th day
of delinquency is mandatory and delivery of the related servicing file,
including an appraisal, no later than the 120th day of delinquency is mandatory.
In the event such Specially Serviced Mortgage Loans are not transferred by the
Company to the Special Subservicer or the related servicing file is not
delivered by the Company to the Special Subservicer, commencing on the 91st day
with respect to the transfer of the Specially Serviced Mortgage Loan or
commencing on the 121st day with respect to the delivery of the related
servicing file, the Company shall pay as a penalty to the Class B Holder, an
amount equal to the scheduled principal and interest due on such Specially
Serviced Mortgage Loan for each such day until such Specially Serviced Mortgage
Loan
16
has been transferred or the servicing file is delivered. The Company shall be
solely responsible for paying out of its own funds any such penalty to the
Special Subservicer without reimbursement from the Trust Fund.
ARTICLE V
---------
MISCELLANEOUS PROVISIONS
------------------------
Section 5.01 INDEMNIFICATION.
Each of the Company, the Class B Holder and the Special Subservicer
(each as such, an INDEMNIFYING Party") shall indemnify the other parties hereto
(each as such, an "INDEMNIFIED PARTY") and hold them harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses (individually and collectively, the "Claims") that such Indemnified
Party may sustain in any way related to the failure of the Indemnifying Party to
perform its duties in compliance with the terms of this Agreement; PROVIDED,
that the Company and the Class B Holder acknowledge and agree that the
obligation of the Special Subservicer to indemnify for losses arising from or
incurred in connection with the servicing of Specially Serviced Mortgage Loans
(including REO Property) shall be determined in accordance with the
indemnification standards applicable to the Company, as Master Servicer under
the Pooling and Servicing Agreement; and PROVIDED FURTHER, that none of the
Company, the Class B Holder or the Special Subservicer or any of the directors,
officers, employees or agents of the Company, Class B Holder or the Servicer
shall be liable for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment; it
being understood that this provision shall not protect the Company, the Class B
Holder or the Special Subservicer against any material breach of warranties,
representations or covenants made herein, or against any specific liability
imposed on such party pursuant hereto, or against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder.
Section 5.02 AMENDMENT.
This Agreement may be amended from time to time by written agreement
signed by each of the parties hereto and the written consent of the Guarantor,
which consent shall not be unreasonably withheld.
Section 5.03 COUNTERPARTS.
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 constitute but one and the same instrument.
17
Section 5.04 GOVERNING LAW.
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.
Section 5.05 NOTICES.
All demands, notices and direction hereunder shall be in writing or by
telecopy and shall be deemed effective upon receipt to:
(a) in the case of the Company,
Option One Mortgage Corporation
▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished to the
Class B Holder, the Special Subservicer, the Trustee and the Guarantor in
writing.
(b) in the case of the Class B Holder,
Credit-Based Asset Servicing and Securitization LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: B-Piece Surveillance Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished to
the Company, the Trustee and the Guarantor in writing.
(c) in the case of the Special Subservicer,
▇▇▇▇▇▇ Loan Servicing LP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
18
or such other address as may hereafter be furnished to the
Company, the Trustee and the Guarantor in writing.
(d) in the case of the Trustee,
▇▇▇▇▇ Fargo Bank Minnesota, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Manager: Option One 2002-5
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished to the
Company, the Special Subservicer, the Class B Holder and the Guarantor in
writing.
(e) in the case of the Guarantor,
▇▇▇▇▇▇▇ Mac
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Director, Mortgage Security Operations -
Funding and Investments
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished to the
Company, the Special Subservicer, the Class B Holder and the Trustee in writing.
Section 5.06 TERMINATION.
This Agreement shall terminate (x) with respect to the Series, at such
time as the Principal Balance of the Class B Certificates has been reduced to
zero, or if later, the date as of which the Special Subservicer is no longer
servicing any Mortgage Loans (or REO Property) of the Series, or (y) if
terminated pursuant to the terms of Section 2.03 of this Agreement, or (z) if
mutually agreed to by the parties hereto.
Section 5.07 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or 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 or enforceability of the other provisions of this
Agreement. If the invalidity of any part, provision, representation or warranty
of this Agreement
19
shall deprive any party of the economic benefit intended to be conferred by this
Agreement, the parties shall negotiate in good faith to develop a structure the
economic effect of which is nearly as possible the same as the economic effect
of this Agreement without regard to such invalidity.
Section 5.08 SUCCESSORS AND ASSIGNS.
This Agreement may not be assigned by any party hereto without the
prior written consent of each of the other parties hereto; provided, however,
that the Class B Holder may assigns its rights hereunder without the prior
written consent of the Company with respect to the Class B Certificates to a
trust or other entity (each, a "Re-Securitization Trust") in connection with a
re-securitization or issuance of collateralized bond obligation (each, a
"Re-Securitization") of mortgage-backed securities, including the Class B
Certificates, by the Class B Holder (whether directly or indirectly) if the
Class B Holder is the administrative agent or collateral manager for the
Re-Securitization Trust, whose responsibilities include managing the collateral
included in the Re-Securitization Trust and/or exercising all of the
Re-Securitization Trust's rights hereunder as Class B Holder of the assigned
Class B Certificates, and the Class B Holder has a 100% equity interest in the
Re-Securitization Trust; provided, however, the Class B Holder may sell any
interest in the Class B Holder's equity interest in any such Re-Securitization
with the written consent of the Guarantor. The Class B Holder shall provide
written notice to the Company, the Guarantor and the NIMS Insurer of any
assignment of the Class B Certificate to a Re-Securitization Trust, specifying
the name of the Re-Securitization Trust and the issuance date.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto.
Section 5.09 ARTICLE AND SECTION HEADINGS.
The article and section headings herein are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
Section 5.10 CONFIDENTIALITY.
(a) In connection with the rights and obligations of each of the parties
hereunder, each of the Company, the Class B Holder and the Special Subservicer
(for the purposes of this Section 5.10(a), a "Disclosing Party") may find it
necessary to disclose to the other parties (including its subsidiaries) or its
representatives (collectively, a "Receiving Party") certain confidential,
non-public or proprietary information relating to the Disclosing Party or its
Affiliates. "Confidential Information" means any nonpublic information whatever
its nature or form, whether obtained orally, by observation, from written
materials or otherwise, from any third party or from the Disclosing Party or its
directors, officers, employees, Affiliates, representatives (including, without
limitation, financial advisors, attorneys and accountants) or agents
(collectively, a party's "Representatives;") that is obtained by the Receiving
Party as a result of or in connection with the performance of its rights or
obligations under this Agreement, whether before or after the date hereof,
together with all analyses, compilations, forecasts, studies or other documents
prepared by a Receiving Party or its
20
Representatives in connection with the performance of its rights or obligations
hereunder which contain or reflect any such information. Confidential
Information includes, but is not limited to, any non-public information
regarding any business or operations plans, strategies, processes, know-how,
portfolios, prospects or objectives of the Disclosing Party; structure,
products, product development, technology, inventions, discoveries,
improvements, specifications, source codes, object code, programming and other
documentation, designs, methods, devices, systems, computer software, including
due diligence system, loss mitigation software included within RADAR,
foreclosure attorney web site, distribution, sales, services, support and
marketing plans, practices, or operations of the Disclosing Party; the prices,
costs and details of the services of the Disclosing Party; the financial
condition, results of operations, financial records and related information of
the Disclosing Party; the position of the Disclosing Party and its clients in
any portfolio; the performance of any accounts or assets of the Disclosing
Party; research and development, operations or plans of the Disclosing Party;
clients and client lists (including, without limitation, the identity of
clients, names, addresses, contact persons, and the client's business or
investment status or needs) of the Disclosing; information received from third
parties under confidential conditions; any trade secrets, confidential or secret
designs, processes, formulae, plans, devices or material (whether or not
patented or patentable) directly or indirectly useful in any aspect of the
business of the Disclosing Party (including, without limitation, financial,
investment and trading plans, designs, products and computer aided financial
investment and trading systems, software, strategies, programs, formulae,
patterns, methods, techniques, processes and system analyses), management
organization and related information (including, without limitation, data and
other information concerning the compensation and benefits paid to officers,
directors and employees of the Disclosing Party); personnel and compensation
policies; operation policies and manuals; means of gaining access to the
Disclosing Party's computer data systems and related information; or any other
non-public financial, commercial, business, technical or other information
relating to the Disclosing Party, its clients, subsidiaries or Affiliates. The
term Confidential Information will not, however, include Confidential
Information which (i) is or becomes publicly available other than as a result of
a disclosure by a Receiving Party or its Representatives in violation of this
Agreement, (ii) becomes available to a Receiving Party on a non-confidential
basis after the date hereof from a source (other than a Disclosing Party or its
Representatives), which, to the best knowledge of a Receiving Party after due
inquiry, is not prohibited from disclosing such information to the Receiving
Party by any obligation of confidentiality to another party hereto, or (iii) is
developed or derived by a party hereto without the aid, application or use of
Confidential Information.
(b) Each of the Class B Holder and the Special Subservicer agrees that
all information supplied by or on behalf of the Company pursuant to Sections
2.02 or 3.01, including individual account information, is the property of the
Company and each such party agrees to use such information only for the purposes
contemplated by this Agreement and otherwise hold such information confidential
and not to disclose such information, except as contemplated hereby or to the
extent such information is made publicly available by or on behalf of the
Company or the Trustee. In addition, each of the parties acknowledge that the
Federal "Privacy of Consumer Financial Information" Regulation (12 CFR Part 40),
as amended from time to time (the "Privacy Regulation"), issued pursuant to
Section 504 of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act (15 U.S.C. 6801 ET
21
SEQ.) governs disclosures of nonpublic personal information about consumers.
Each of the Class B Holder and the Special Subservicer hereby agrees that it
shall comply with the terms and provisions of the Privacy Regulation, including,
without limitation, the provisions regarding the sharing of Nonpublic Personal
Information (as defined in the Privacy Regulation) in so far as such terms and
provisions relate to Confidential Information.
Section 5.11 OTHER CERTIFICATES OF THE SERIES.
The Class B Holder agrees, that without the prior written consent of
the Company, so long as the Class B Holder is a party to this Agreement and a
holder of the Class B Certificates of the Series, it will not purchase, sell or
trade any publicly registered Certificates of the Series. The Class B Holder
further agrees, that without the prior written consent of the Guarantor, so long
as the Class B Holder is a party to this Agreement and a holder of the Class B
Certificates of the Series, it will not purchase, sell or trade the Class A-1
Certificates or the Class S-1 Certificates of the Series.
Section 5.12 NO PARTNERSHIP.
Nothing herein shall be deemed or construed to create a partnership or
joint venture between the parties hereto and the services of the Company shall
be rendered as an independent contractor and not as an agent for the Company.
Section 5.13 CLASS B CERTIFICATES SUBJECT TO REPURCHASE ARRANGEMENTS.
The Company hereto acknowledges that the Class B Holder is the
beneficial owner of the Class B Certificates which are subject to repurchase
agreements or other financing arrangements with one or more counterparties (each
a "Repo Counterparty"), with such counterparties being the owner of record of
the Class B Certificates (such Class B Certificates subject to a repurchase
agreement or other financing arrangement, the "REPO CLASS B CERTIFICATES"). With
respect to the Series of Repo Class B Certificates, the definition of Class B
Certificates shall include, and this Agreement shall be effective with respect
to, each such Repo Class B Certificate, provided the Company shall have received
the Consent of Record Owner, substantially in the form of Exhibit A attached
hereto, relating to such Repo Class B Certificate executed by the applicable
Repo Counterparty. The Class B Holder shall notify the Guarantor in the event
that the Repo Counterparty acquires beneficial ownership of the Repo Class B
Certificates.
22
IN WITNESS WHEREOF, each of the parties hereto have caused its name to
be signed hereto by its respective officer thereunto duly authorized, all as of
the day and year first above written.
OPTION ONE MORTGAGE CORPORATION
By:
---------------------
Name:
---------------------
Title:
---------------------
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC
By:
---------------------
Name:
---------------------
Title:
---------------------
▇▇▇▇▇▇ LOAN SERVICING LP
By:
---------------------
Name:
---------------------
Title:
---------------------
Accepted and Agreed:
FEDERAL HOME LOAN MORTGAGE CORPORATION
By:
---------------------
Name:
---------------------
Title:
---------------------
RADIAN ASSET ASSURANCE INC.
By:
---------------------
Name:
---------------------
Title:
---------------------
23
RADIAN INSURANCE INC.
By:
---------------------
Name:
---------------------
Title:
---------------------
FINANCIAL SECURITY ASSURANCE INC.
By:
---------------------
Name:
---------------------
Title:
---------------------
Acknowledged :
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
By:
---------------------
Name:
---------------------
Title:
---------------------
SCHEDULE I
Describe the Series of Class B Certificates and the Pooling and Servicing Agreement
---------------------------------------- -------------------------------------- --------------------------------------
Series Pooling and Servicing Agreement Percentage of Class Owned by
Class B Holder
---------------------------------------- -------------------------------------- --------------------------------------
Option One Mortgage Loan Trust 2002-5 Pooling and Servicing Agreement 100% of Class B Certificates
Asset-Backed Certificates, Series dated as of July 1, 2002 among
2002-5 Option One Mortgage Acceptance
Corporation, as depositor, Option
One Mortgage Corporation, as
originator and master servicer, Federal
Home Loan Mortgage Corporation, as
guarantor of the Class A-1 Certificates
and the Class S-1 Certificates and
▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as trustee
---------------------------------------- -------------------------------------- --------------------------------------
SCHEDULE II
SPECIAL SUBSERVICING FEES
EXHIBIT A
CONSENT OF RECORD HOLDER
[Insert Date]
[Company]
[Address]
Attn:
Credit-Based Servicing and Securitization LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Re: Option One Mortgage Loan Trust 2002-5, Asset-Backed Certificates,
Series 2002-5, Class B Certificates (the "Repo Class B Certificate")
and the Special Subservicing Agreement dated as of July 30, 2002 by and
among Option One Mortgage Corporation, Credit-Based Asset Servicing and
Securitization LLC and ▇▇▇▇▇▇ Loan Servicing LP (Such agreement, as
amended to date, the "Agreement")
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Ladies and Gentlemen:
The undersigned, [Insert Name of Repo Counterparty] ("Repo Counterparty"), is
the record owner of the Repo Class B Certificate pursuant to a repurchase
agreement or other financing arrangement with Credit-Based Asset Servicing and
Securitization LLC ("C-BASS"). As such, C-BASS is the beneficial owner of such
Repo Class B Certificate, and unless and until the Repo Counterparty indicates
otherwise in writing delivered to Option One Mortgage Corporation, the Repo
Counterparty hereby authorizes C-BASS to take any and all action C-BASS deems
necessary, desirable or appropriate and permitted to be taken by the record
owner of the Repo Class B Certificate under the Agreement, and to otherwise
assume all rights and obligations of the record owner of the Repo Class B
Certificate for all purposes under the Agreement.
Capitalized terms used herein but not herein defined shall have the respective
meaning ascribed to such term in the Agreement.
[Insert Name of Repo Counterparty]
By:
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Name:
---------------------
Title:
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OPTION ONE MORTGAGE CORPORATION
By:
---------------------
Name:
---------------------
Title:
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NOTIFICATION OF LOANS TO TRANSFER
A. Company will coordinate and provide a listing of all loans past 30 (MBA
methodology) days delinquent. The list will be provided to Special Subservicer
for review and discussion on the 4th Business day of each month.
B. Class B Holder and Special Subservicer to agree upon the loans to be
transferred at month-end. The list must be provided via Facsimile or Email by
the 6th business day of the month to:
ADDRESS OF COMPANY
Attention:
I. CONVERSION DATA
Conversion data can be supplied in 3 formats:
A. Manual conversion
1. Provide a "master file data record" for each loan (accompanied by a
listing of all your code definitions).
2. Provide a trial balance containing all the loans.
B. Electronic conversion
1. If it is determined that this type of conversion is advantageous to
both parties the format (Microsoft Excel) will be furnished.
C. Tape to Tape conversion
1. If it is determined that this type of conversion is advantageous to
both parties the details will be furnished.
D. We would appreciate receiving the information for either a
manual or electronic conversion at least two weeks before the
scheduled transfer date to provide time for us to verify and
load the information except for the specific data that is
determined at the transfer date.
II. HOMEOWNER NOTIFICATION
A. The mortgagor notification (good-bye letter) must be mailed
fifteen
days prior to the transfer date. PLEASE FORWARD A COPY OF YOUR
GOOD-BYE LETTER TO ▇▇▇▇▇ ▇▇▇▇▇ (FAX NUMBER ▇▇▇-▇▇▇-▇▇▇▇) FOR
APPROVAL PRIOR TO MAILING.
B. Electronic file or hard copies of your mortgagor notification
letters should be provided to LLS.
C. INFORMATION FOR NOTIFICATION LETTERS
HOURS OF OPERATION: 7:00 AM TO 7:00 PM (CST)
CUSTOMER SERVICE TOLL FREE NUMBER: 800/247-9727
CORRESPONDENCE ADDRESS: ▇▇▇▇▇▇ LOAN SERVICING, LP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
PAYMENT ADDRESS: ▇▇▇▇▇▇ LOAN SERVICING, LP
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
III. HAZARD / FLOOD INSURANCE
A. The Hazard / Flood insurance policies should be in separate
files identified with your loan number.
B. Please request a change to the mortgagee clause as follows:
▇▇▇▇▇▇ Loan Servicing LP
Its Successors or Assigns
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
C. Copies of the mortgagee clause change requests should be
provided to LLS.
D. Any unpaid policies, expiration notices, cancellation
notices, loans with expired policies should be properly
identified, sorted and marked for special handling.
E. Individual loan insurance records showing payee (name and
address), due dates, frequency of payment, next due date, last
paid date and last paid amount.
F. Provide a list of loans under your "force place coverage"
program. Will the coverage on individual loans remain in
effect until expiration or be canceled at time of the
transfer?
IV. FHA LOANS
A. Provide a listing including the following items on FHA Loans
with a
monthly premium.
1. Loan number
2. FHA case number
3. Anniversary date
4. Annual premium
5. Monthly amount
6. Total MIP paid to date
7. Next month the premium is due
B. Provide a listing including the following items on FHA loans
that the full premium was paid up front.
1. Loan number
2. FHA case number
3. Insuring date
4. Amount of prepaid premium
C. Provide a listing of all FHA Uninsured loans.
D. Provide a listing of all FHA 235 loans.
E. Provide your HUD ID#.
F. HUD Form 92080 should be completed with our HUD mortgagee
number (72313) and mailed to LLS for signing and forwarding to
HUD. Remember, HUD requires notification by tape if more than
15 loans are transferring.
V. CONVENTIONAL LOANS
A. Provide the individual loan PMI certificates
B. Provide copies of the notification to the PMI companies
requesting a change of servicer to LLS.
C. Listing of all loans with PMI to include:
1. Loan number
2. PMI company
3. PMI certificate number
4. Next due date
5. Last amount paid
D. Homeowner Protection Act of 1998.
1. Loans originated after 07/29/99: Provide copies of
original disclosure notice produced at origination of
loan.
2. Loans originated prior to 07/29/99: Provide the
annual disclosure notices supplied to borrowers.
E. Listing of loans that have Pool Insurance. If loan has Pool
Insurance supply name, address and phone number of
insurance agency.
F. Listing of loans that have Pool Insurance and private mortgage
insurance.
VI. REAL ESTATE TAXES
A. Individual loan tax records showing payee (name and address),
due dates, frequency of payment, next due date, last paid date
and last paid amount.
B. All tax receipts should be provided to LLS.
C. Provide copies of any tax service contracts along with the
request for a change of servicer to LLS under the following
contract numbers (Transamerica-2489, First American-56353,
Lereta-65000, Fidelity-2059). We also have tax contracts with
other tax services, which you can contact us for more
information.
D. All property taxes due and payable should be paid prior to the
transfer date.
E. Provide a listing of any loans with delinquent taxes
containing the pertinent information as of the transfer date.
VII. OPTIONAL INSURANCE
A. Only prepaid optional insurance should be provided to LLS.
B. All prepaid optional insurance should include the following
information.
1. Loan number
2. Insurance company
3. Type of coverage
4. Policy Number
6. Coverage Amount
7. Policy Effective Date
8. Premium Amount
9. Expiration Date
C. Copies of the master and/or individual policies for the
insurance coverage.
D. Copies of the notification sent to the insurance companies.
VIII. INVESTOR REPORTS
A. Copy of the final remittance report to the investor including
a trial balance as of cutoff date.
B. Provide a list of all simple interest loans.
C. Provide a list of all loans currently on ACH Draft. The
borrower to be notified that their ACH Draft will be
discontinued in your good bye letter.
IX. ADJUSTABLE RATE MORTGAGES / GPM / BUYDOWNS / BALLOONS
A. Provide individual loan historical rate and P&I changes.
B. ARM provisions for each loan within the portfolio
C. Provide list of ARM Plans and definitions.
D. Provide a list of loans that are step rate and/or GPM
mortgages with status of account.
E. Provide a list of loans that are buydowns with status of
account.
F. Provide a list of balloon loans, their maturity dates,
amortization term and if they have a convertible option. If a
loan has reached its maturity date prior to conversion furnish
the current status.
X. FORECLOSURES
A. A list of contact people for the Foreclosure, Claims and
Bankruptcy area needs to be provided to ▇▇▇▇▇▇.
B. A listing of loans in foreclosure, sorted by state, including
status report on each loan showing the current stages of the
foreclosure, the foreclosure referral date and who is holding
the original documents. Alltel users please provide For3
screen or Foreclosure (Service Release report). PRELIMINARY
REPORT SHOULD BE PROVIDED 30 DAYS PRIOR TO THE TRANSFER DATE
and a final report at the time of the transfer.
C. Name and address listing of foreclosure attorneys/ PRELIMINARY
REPORT SHOULD BE PROVIDED 30 DAYS PRIOR TO THE TRANSFER DATE
D. Listing of any loans pending a Refunding to the Va., HUD
Assignment, approved Dil, Presale or Partial Claim/
PRELIMINARY REPORT SHOULD BE PROVIDED 30 DAYS PRIOR TO THE
TRANSFER DATE and a final report at the time of the transfer.
E. LISTING OF ANY LOAN CURRENTLY IN LITIGATION AND A REPORT TO BE
PROVIDED AT TIME OF TRANSFER
F. Listing of loans with escrow advances due to delinquency,
include breakdown with bills and ledgers attached and
reconciled (90, 60, 30) / Report to be provided at time of
transfer
G. Report of any loans active in foreclosure that have property
damage. Include any loans in foreclosure in which you are
holding loss draft funds
H. Report of delinquent loans 90 days or older that are vacant.
I. Report of delinquent loans 90 days or older that are not
active in foreclosure and or bankruptcy; list date of breach
letter and provide copies of breach letter for our file
J. Vendor invoices to be paid up to the transfer date.
K. Printout of the corporate advance screen history with copies
of invoices and checks attached.
L. Report of any loans on a stipulation or payment agreement and
a copy of the agreement to be included in the file.
M. The name of the beneficiary they are using for foreclosures.
N. Files for foreclosures, bankruptcys, claims, breached loans,
repayment plans and active loss mitigation accounts must be
sorted and identified separately by marking the front of the
file or boxing separately.
O. TRAILING CORRESPONDENCE SHOULD BE SENT WEEKLY WITH THE
EXCEPTION OF CHECKS OR MONEY ORDERS WHICH SHOULD BE FORWARDED
DAILY.
P. Foreclosure files should be sent to the following address:
▇▇▇▇▇▇ Loan Servicing LP
ATTN: ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
XI. BANKRUPTCY
A. Preliminary listing of loans active in bankruptcy, sorted by
state, including the following information. (a) Type of
Chapter filed (b) Date Bankruptcy filed. This report should
be forwarded 30 days prior to the transfer date and a final
provided on the transfer date.
B. Listing showing names and address of the debtors attorney,
Seller's attorney and Bankruptcy Trustee. A PRELIMINARY REPORT
SHOULD BE FORWARDED 30 DAYS PRIOR TO THE TRANSFER DATE and a
final provided on the date of the transfer.
C. LISTING OF PENDING RELIEF OF STAYS
D. Loan level listing of all loans with agreed orders or
stipulation agreements with the current status on each of the
cases.
E. LISTING OF LOANS WITH ESCROW ADVANCES DUE TO BANKRUPTCY.
INCLUDE BREAKDOWN WITH ▇▇▇▇ AND LEDGERS ATTACHED AND
RECONCILED (90, 60, 30 DAYS)
F. COPIES OF LETTERS TO BANKRUPTCY ATTORNEY ADVISING OF THE
TRANSFER
G. LIST OF ANY CRAMDOWNS
H. FILES SHOULD BE SORTED AND CLEARLY MARKED FOR SPECIAL
HANDLING.
I. FILES SHOULD HAVE THE STATUS SHOWN ON THE FRONT OF EACH FILE
AND STATUS SCREEN PRINTS INCLUDED IN EACH FILE.
J. PROVIDE A STATUS REPORT THAT INCLUDES ATTORNEYS NAME AND PHONE
NUMBER, CHAPTER, CASE NUMBER, BK BILLING DATE, POC DATE, PRE
PETITION DUE DATE, POST PETITION DUE DATE AND MOTION STATUS IF
FILED AS OF THE TRANSFER DATE.
K. BANKRUPTCY FILES SHOULD BE SENT TO THE FOLLOWING ADDRESS:
▇▇▇▇▇▇ Loan Servicing LP
ATTN: ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
XII. LOSS MITIGATION
A. Short Sale
1. Recent Property Valuation
2. Sales Contract
3. HUD-1 Settlement Statement, estimated
4. Realtor/Broker contact information
5. Borrower financials
6. Borrower hardship letter
7. Approval letter (If approved and not closed prior to
servicing transfer)
B. Modification: A PRELIMINARY REPORT SHOULD BE FORWARDED 30 DAYS
PRIOR TO THE TRANSFER DATE AND THE FINAL AT TRANSFER DATE.
1. Recent Property Valuation
2. Title Search
3. Modification Agreement or terms of Modification
4. Document/Title co. contact information
5. Borrower financials
6. Borrower hardship letter
7. Identification of any funds collected in conjunction
with modification.
C. Deed-in-Lieu of Foreclosure
1. Recent Property Valuation
2. Title Search
3. D-I-L Agreement
4. Document/Title co. contact information
5. Borrower financials
6. Borrower hardship letter
D. Partial-Claims
1. Borrower financials
2. Borrower hardship letter
3. HUD Insurance Certificate
4. Identify prior partial claim filings if applicable
XIII. OTHER
A. Provide CURRENT YEARS LOAN HISTORY to the transfer date plus the FOUR PRIOR
CALENDAR YEARS LOAN HISTORIES accompanied by an explanation of your
transaction codes. HISTORY SHOULD BE PROVIDED IN AN ELECTRONIC FILE OR HARD
COPY. A PRELIMINARY REPORT SHOULD BE FORWARDED 30 DAYS PRIOR TO THE
TRANSFER DATE AND THE FINAL AT TRANSFER DATE.
B. Provide copies of the last two-escrow analysis with an explanation of your
analysis method (cushion, etc.).
C. Provide a list of any loans that have a prepayment penalty provision in the
mortgage.
D. Loan level prepayment penalty information should be provided on any loan
with a prepayment penalty. THIS INFORMATION SHOULD BE PROVIDED IN AN
ELECTRONIC FILE OR HARD COPY.
E. Provide the currently active collection records and pertinent information
on delinquent loans along with FICO scores, BPO values, extension data and
payment plan data. A PRELIMINARY REPORT SHOULD BE FORWARDED 30 DAYS PRIOR
TO THE TRANSFER DATE AND THE FINAL AT TRANSFER DATE. THIS INFORMATION
SHOULD BE PROVIDED IN AN ELECTRONIC FILE OR HARD COPY.
F. Provide a list of loans with incorrect or missing phone numbers.
G. Your check for the escrow balances matching the cutoff trial balance.
G. Your check for any unapplied funds and an indication as to how each
unapplied payment should be applied.
H. Provide a listing containing the mortgagor name, co-mortgagor name,
property address and mailing address.
I. Listing of the first lien holder (containing company, address and loan
number), if the loan being transferred is a second lien.
J. Provide list of all second liens.
K. The following items should be sorted and clearly marked for special
handling.
1. Insurance loss drafts should provide all documentation on the current
status.
2. Unprocessed payoff funds should be accompanied by a copy of the payoff
quotation.
3. Information should be furnished on any pending payoff or assumption.
4. Information on any incomplete partial releases should be provided.
L. Loan payments and/or payoff funds received after the cutoff should be
endorsed to ▇▇▇▇▇▇ LOAN SERVICING LP and forwarded by
overnight service to the following address within twenty-four hours,
properly identified with your loan number.
▇▇▇▇▇▇ Loan Servicing LP
Attn: Cashiering Department
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
M. Please ship the entire loan file (hard, microfiche or imaged) and all
documents to LLS to be received by (TBD). Provide inventory ledger with
servicing files to identify loans within each box. Any information such as
preliminary trial balances, master file data records, default information,
previous year's ledger histories, etc. should be furnished as early as
possible prior to the transfer date. Any file sent to LLS that we will not
be servicing will be returned via uninsured regular mail unless LLS is
supplied with shipping instructions and method of payment.
All servicing files should be sent to:
▇▇▇▇▇▇ Loan Servicing LP
Attn: Records Management Department
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
N. All reports such as trial balances, master file data records, default
information, histories, etc. should be sent to :
▇▇▇▇▇▇ Loan Servicing LP
Attn: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Remember it is your responsibility to furnish all required IRS reporting
statements on these loans for the current year up to the transfer date both to
the mortgagors and to the appropriate government agencies.
Your cooperation in expediting this transfer is appreciated. Should you or any
member of your staff have any questions concerning this transfer, please feel
free to call me or the appropriate individual listed below at ▇-▇▇▇-▇▇▇-▇▇▇▇.
CONTACT DEPARTMENT EXTENSION
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▇▇▇▇▇ ▇▇▇▇▇▇▇ ARM's 580
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Insurance 698
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Tax 483
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Payoffs 586
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Investor Accounting 8902
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ Cashiering 563
Email: ▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ Servicing Manager 659
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ Foreclosure/Bankruptcy 628
Email: ▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Conversion 686
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Client Relations 8953
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Asst. Servicing Manager 8929
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior VP 8801
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇-▇▇▇▇.▇▇▇
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE
(Available Upon Request)