J.P. MORGAN ACCEPTANCE CORPORATION
I
Depositor
J.P. MORGAN MORTGAGE ACQUISITION
CORP.
Seller
OPTION ONE MORTGAGE
CORPORATION
Servicer
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION
Securities
Administrator
U.S. BANK NATIONAL ASSOCIATION
Trustee
and
PENTALPHA SURVEILLANCE LLC
Trust Oversight Manager
_________________________________________
POOLING AND SERVICING
AGREEMENT
Dated as of December 1, 2005
_________________________________________
J.P. MORGAN MORTGAGE ACQUISITION CORP.
2005-OPT2
ASSET BACKED PASS-THROUGH CERTIFICATES,
SERIES 2005-OPT2
Table of Contents
Page
ARTICLE I DEFINITIONS
SECTION 1.01.
Defined Terms.
3
SECTION 1.02.
Allocation of Certain Interest
Shortfalls.
46
SECTION 1.03.
Designation of Interests in
REMIC.
46
SECTION 1.04.
Rights of the NIMS Insurer.
54
ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF
CERTIFICATES
SECTION 2.01.
Conveyance of Mortgage Loans.
54
SECTION 2.02.
Acceptance of REMIC I by the
Trustee.
57
SECTION 2.03.
Repurchase or Substitution of Mortgage
Loans by the Originator, the
Seller or the Depositor; Payment of
Prepayment Premiums in the
Event of Breach.
58
SECTION 2.04.
Representations and Warranties of the
Depositor.
62
SECTION 2.05.
Representations, Warranties and Covenants
of the Servicer and the
Seller.
64
SECTION 2.06.
Issuance of the R-I Residual
Interest.
67
SECTION 2.07.
Conveyance of Uncertificated REMIC
Regular Interests; Acceptance
by the Trustee.
68
ARTICLE III ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01.
Servicer to Act as Servicer.
68
SECTION 3.02.
Sub-Servicing Agreements Between the
Servicer and Sub-Servicers.
70
SECTION 3.03.
Successor Sub-Servicers.
72
SECTION 3.04.
Liability of the Servicer.
72
SECTION 3.05.
No Contractual Relationship Between
Sub-Servicers and NIMS
Insurer, Trustee, Securities
Administrator or Certificateholders.
72
SECTION 3.06.
Assumption or Termination of
Sub-Servicing Agreements by
Securities Administrator.
73
SECTION 3.07.
Collection of Certain Mortgage Loan
Payments.
73
SECTION 3.08.
Sub-Servicing Accounts.
74
SECTION 3.09.
Collection of Taxes, Assessments and
Similar Items; Servicing
Accounts.
74
SECTION 3.10.
Collection Account and Distribution
Account.
75
SECTION 3.11.
Withdrawals from the Collection Account
and Distribution Account.
78
SECTION 3.12.
Investment of Funds in the Collection
Account, the REO Account and
the Distribution Account.
80
SECTION 3.13.
Superior Liens.
80
SECTION 3.14.
Maintenance of Hazard Insurance and
Errors and Omissions and
Fidelity Coverage.
81
SECTION 3.15.
Enforcement of Due-On-Sale Clauses;
Assumption Agreements.
82
SECTION 3.16.
Realization Upon Defaulted Mortgage
Loans.
84
SECTION 3.17.
Trustee to Cooperate; Release of Mortgage
Files.
86
SECTION 3.18.
Servicing Compensation.
87
SECTION 3.19.
Reports to the Securities Administrator;
Collection Account
Statements and Other Reporting
Obligations.
88
SECTION 3.20.
Statement as to Compliance.
89
SECTION 3.21.
Independent Public Accountants’
Servicing Report.
89
SECTION 3.22.
Access to Certain
Documentation.
90
SECTION 3.23.
Title, Management and Disposition of REO
Property.
90
SECTION 3.24.
Obligations of the Servicer in Respect of
Prepayment Interest
Shortfalls.
93
SECTION 3.25.
Obligations of the Servicer in Respect of
Mortgage Rates and Monthly
Payments.
94
SECTION 3.26.
Net WAC Reserve Fund.
94
SECTION 3.27.
Swap Agreement.
95
SECTION 3.28.
Advance Facility.
95
ARTICLE IV PAYMENTS TO
CERTIFICATEHOLDERS
SECTION 4.01.
Distributions.
98
SECTION 4.02.
Statements to
Certificateholders.
109
SECTION 4.03.
Remittance Reports; P&I
Advances.
113
SECTION 4.04.
Allocation of Realized Losses.
114
SECTION 4.05.
Compliance with Withholding
Requirements.
115
SECTION 4.06.
Tax Returns; Commission
Reporting.
115
SECTION 4.07.
Supplemental Interest Trust.
117
SECTION 4.08.
Rights of Swap Provider.
118
SECTION 4.09.
Replacement of Swap Provider.
119
SECTION 4.10.
Distribution of Net Swap
Payments
119
ARTICLE V THE CERTIFICATES
SECTION 5.01.
The Certificates.
123
SECTION 5.02.
Registration of Transfer and Exchange of
Certificates.
125
SECTION 5.03.
Mutilated, Destroyed, Lost or Stolen
Certificates.
131
SECTION 5.04.
Persons Deemed Owners.
131
SECTION 5.05.
Certain Available Information.
131
ARTICLE VI THE DEPOSITOR, THE SELLER AND
THE SERVICER
SECTION 6.01.
Liability of the Depositor, the Seller
and the Servicer.
132
SECTION 6.02.
Merger or Consolidation of the Depositor,
the Seller or the Servicer.
132
SECTION 6.03.
Limitation on Liability of the Depositor,
the Seller, the Servicer and
Others.
133
SECTION 6.04.
Limitation on Resignation of the
Servicer.
134
SECTION 6.05.
Rights of the Depositor, the Seller, the
Securities Administrator and
the Trustee in Respect of the
Servicer.
135
ARTICLE VII DEFAULT
SECTION 7.01.
Servicer Events of Default.
135
SECTION 7.02.
Securities Administrator to Act;
Appointment of Successor.
138
SECTION 7.03.
Notification to
Certificateholders.
140
SECTION 7.04.
Waiver of Servicer Events of
Default.
140
ARTICLE VIII CONCERNING THE TRUSTEE, THE
SECURITIES ADMINISTRATOR
AND THE TRUST OVERSIGHT
MANAGER
SECTION 8.01.
Duties of Trustee.
140
SECTION 8.02.
Certain Matters Affecting the
Trustee.
142
SECTION 8.03.
Trustee not Liable for Certificates or
Mortgage Loans.
143
SECTION 8.04.
Trustee May Own Certificates.
144
SECTION 8.05.
Fees and Expenses of Trustee.
144
SECTION 8.06.
Eligibility Requirements for
Trustee.
144
SECTION 8.07.
Resignation and Removal of
Trustee.
145
SECTION 8.08.
Successor Trustee.
146
SECTION 8.09.
Merger or Consolidation of
Trustee.
146
SECTION 8.10.
Appointment of Co-Trustee or Separate
Trustee.
146
SECTION 8.11.
Duties of Securities
Administrator.
148
SECTION 8.12.
Certain Matters Affecting the Securities
Administrator.
149
SECTION 8.13.
Securities Administrator not Liable for
Certificates or Mortgage
Loans.
151
SECTION 8.14.
Securities Administrator May Own
Certificates.
152
SECTION 8.15.
Fees and Expenses of Securities
Administrator.
152
SECTION 8.16.
Eligibility Requirements for Securities
Administrator.
152
SECTION 8.17.
Resignation and Removal of Securities
Administrator.
153
SECTION 8.18.
Successor Securities
Administrator.
154
SECTION 8.19.
Merger or Consolidation of Securities
Administrator.
154
SECTION 8.20.
Duties of the Trust Oversight
Manager.
154
SECTION 8.21.
Limitation Upon Liability of the Trust
Oversight Manager.
155
SECTION 8.22.
Removal of Trust Oversight
Manager.
155
ARTICLE IX TERMINATION
SECTION 9.01.
Termination Upon Repurchase or
Liquidation of All Mortgage Loans.
155
SECTION 9.02.
Additional Termination
Requirements.
158
ARTICLE X REMIC PROVISIONS
SECTION 10.01.
REMIC Administration.
158
SECTION 10.02.
Prohibited Transactions and
Activities.
162
SECTION 10.03.
Servicer and Securities Administrator
Indemnification.
162
ARTICLE XI MISCELLANEOUS
PROVISIONS
SECTION 11.01.
Amendment.
163
SECTION 11.02.
Recordation of Agreement;
Counterparts.
164
SECTION 11.03.
Limitation on Rights of
Certificateholders.
165
SECTION 11.04.
Governing Law.
166
SECTION 11.05.
Notices.
166
SECTION 11.06.
Severability of Provisions.
166
SECTION 11.07.
Notice to Rating Agencies and the Swap
Provider.
166
SECTION 11.08.
Article and Section
References.
167
SECTION 11.09.
Third Party Rights.
167
SECTION 11.10.
Grant of Security Interest.
168
SECTION 11.11.
Protection of Assets.
168
SECTION 11.12.
Non-Solicitation
169
Exhibits
Exhibit A-1
Form of Class A Certificate
Exhibit A-2
Form of Mezzanine Certificate
Exhibit A-3
Form of Class C Certificate
Exhibit A-4
Form of Class P Certificate
Exhibit A-5
Form of Class R Certificate
Exhibit B
[Reserved]
Exhibit C-1
Form of Trust Receipt and Initial
Certification
Exhibit C-2
Form of Trustee Receipt and Final
Certification
Exhibit D
Form of Mortgage Loan Purchase
Agreement
Exhibit E-1
Form of Request for Release
Exhibit E-2
[Reserved]
Exhibit F-1
Forms of Transferor/Transferee
Representation Letter
Exhibit F-2
Form of Transfer Affidavit and
Agreement
Exhibit G-1
Form of ERISA Certification
Exhibit G-2
Form of ERISA Certification
Exhibit H
Form of Depositor
Certification
Exhibit I
Form of Trustee Certification
Exhibit J
Form of Servicer Certification
Schedules
Schedule 1
Mortgage Loan Schedule
Schedule 2
Prepayment Premium Schedule
Schedule 3
Swap Agreement Schedule
This Pooling and Servicing Agreement, is
dated as of December 1, 2005 (the “Agreement”), by and
among J.P. MORGAN ACCEPTANCE CORPORATION, a Delaware corporation,
as Depositor (the “Depositor”), J.P. MORGAN MORTGAGE
ACQUISITION CORP., a Delaware corporation, as Seller (the
“Seller”) for purposes of Section 2.03 and 2.05,
OPTION ONE MORTGAGE CORPORATION, as Servicer (the
“Servicer”), JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Securities Administrator (the “Securities
Administrator”), PENTALPHA SURVEILLANCE LLC as Trust
Oversight Manager (the “Trust Oversight Manager“) and
U.S. BANK 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 multiple REMICs (as defined herein) created
hereunder. The Trust Fund will consist of a segregated pool
of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement.
As of the Cut-off Date, the Mortgage
Loans had an aggregate Stated Principal Balance equal to
$1,510,095,312.
Set forth below are designations of
Classes of Certificates to the categories used herein.
|
Book-Entry Certificates
|
All Classes of Certificates other than the Physical
Certificates.
|
|
Class A Certificates
|
Class A-1A, Class A-1B, Class A-2, Class A-3 and Class A-4
Certificates.
|
|
Class P Certificates
|
Class P Certificates.
|
|
ERISA-Restricted Certificates
|
Non-Offered Certificates and any Certificates that do not satisfy
the applicable ratings requirement under the Underwriter’s
Exemption.
|
|
LIBOR Certificates
|
Class A and Mezzanine Certificates.
|
|
Mezzanine Certificates
|
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11
Certificates.
|
|
Non-Offered Certificates
|
Class M-10, Class M-11, Class C, Class P and Residual
Certificates.
|
|
Offered Certificates
|
Class A and Offered Subordinate Certificates.
|
|
Offered Subordinate Certificates
|
Mezzanine Certificates (other than the Class M-10 and Class M-11
Certificates).
|
|
Physical Certificates
|
Class C, Class P and Residual Certificates (other than the
Uncertificated Interest).
|
|
Regular Certificates
|
All Classes of Certificates other than the Residual
Certificates.
|
|
Residual Certificates
|
Class R Certificates and the Uncertificated Interest.
|
|
Senior Certificates
|
Class A Certificates.
|
|
Subordinate Certificates
|
Class C and Mezzanine Certificates.
|
|
Uncertificated Interest
|
The R-I Interest.
|
In consideration of the mutual agreements
herein contained, the Depositor, the Seller, the Servicer, the
Securities Administrator and the Trustee agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01.
Defined Terms.
The following words and phrases, unless
the context otherwise requires, shall have the following
meanings:
“Accepted Servicing
Practices”: With respect to any Mortgage Loan, those mortgage
servicing practices employed by the Servicer in servicing similar
mortgage loans for its own portfolio giving due consideration to
customary and usual standards of practice of prudent mortgage
lending institutions which service mortgage loans of the same type
as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located.
“Adjustable Rate Mortgage
Loan”: Each of the Mortgage Loans identified in the Mortgage
Loan Schedule as having a Mortgage Rate that is subject to
adjustment.
“Adjustable Rate PPC”: A CPR
of 4.00% per annum of the then unpaid principal balance of such
Mortgage Loans in the first month of the life of such Mortgage
Loans and an additional approximately 1.3478% (precisely 31/23%)
per annum in each month thereafter until the 12th month.
Beginning in the 12th month and in each month thereafter
during the life of such Mortgage Loans, a CPR of 35%.
“Adjustment Date”: With
respect to each Adjustable Rate Mortgage Loan, the day of the month
on which the Mortgage Rate of such Mortgage Loan changes pursuant
to the related Mortgage Note. The first Adjustment Date
following the Cut-off Date as to each Adjustable Rate Mortgage Loan
is set forth in the Mortgage Loan Schedule.
“Administrative Fee”: As to
any Distribution Date, the sum of the Servicing Fee, the Securities
Administrator Fee, the Custodian Fee and the Trust Oversight
Manager Fee, each for such Distribution Date.
“Advance Facility”: As
defined in Section 3.28(a) herein.
“Advance Facility Notice”: As
defined in Section 3.28(b) herein.
“Advance Facility Trustee”:
As defined in Section 3.28(b) herein.
“Advance Reimbursement
Amounts”: As defined in Section 3.28(a) herein.
“Advancing Person”: As
defined in Section 3.28(a) herein.
“Affiliate”: With respect to
any specified Person, any other Person controlling or controlled by
or under common control with such specified Person. For the
purposes of this definition, “control” when used with
respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the
foregoing.
“Aggregate Collateral
Balance”: As of any date of determination will be equal to
the aggregate Stated Principal Balance of the Mortgage Loans and
any REO Properties owned by the Trust.
“Agreement”: This Pooling and
Servicing Agreement and all amendments hereof and supplements
hereto.
“Applicable Regulations”: As
to any Mortgage Loan, all federal, state and local laws, statutes,
rules and regulations applicable thereto.
“Allocated Realized Loss
Amount”: With respect to any Distribution Date and any Class
of Mezzanine Certificates, the amount by which (A) any Realized
Losses allocated to such Class of Certificates on any Distribution
Date pursuant to Section 4.04 exceeds the sum of (B) (i) any
additions to the Class Principal Amount pursuant to Section 4.04(d)
on such Distribution Date or any previous Distribution Date and
(ii) the aggregate of the amounts paid in respect of
reimbursement of Allocated Realized Loss Amounts pursuant to
Section 4.01(a)(3) on previous Distribution Dates.
“Assignment”: An assignment
of Mortgage, notice of transfer or equivalent instrument, in
recordable form (excepting therefrom, if applicable, the mortgage
recordation information which has not been required pursuant to
Section 2.01 hereof or returned by the applicable recorder’s
office and/or the assignee’s name), which is sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property
is located to reflect of record the sale of the Mortgage, which
assignment, notice of transfer or equivalent instrument may be in
the form of one or more blanket assignments covering Mortgages
secured by Mortgaged Properties located in the same county, if
permitted by law.
“Assignment and Assumption
Agreement”: That certain assignment and assumption agreement
dated as of the Cut-off Date, by and between the Seller, as
assignor, and the Depositor, as assignee, relating to the Mortgage
Loans.
“Available Funds”: With
respect to any Distribution Date, an amount equal to (1) the sum of
(a) the aggregate of the amounts on deposit in the Collection
Account and Distribution Account as of the close of business on the
related Determination Date, (b) the aggregate of any amounts
received in respect of an REO Property withdrawn from any REO
Account and deposited in the Distribution Account for such
Distribution Date pursuant to Section 3.23, (c) the aggregate of
any amounts deposited in the Distribution Account by the Servicer
in respect of Compensating Interest for such Distribution Date
pursuant to Section 3.24 and (d) the aggregate of any P&I
Advances made by the Servicer for such Distribution Date pursuant
to Section 4.03 reduced (to not less than zero) by (2) the portion
of the amount described in clause (1)(a) above that represents (i)
Monthly Payments on the Mortgage Loans received from a Mortgagor on
or prior to the Determination Date but due during any Due Period
subsequent to the related Due Period, (ii) Principal Prepayments on
the Mortgage Loans received after the related Prepayment Period
(together with any interest payments received with such Principal
Prepayments to the extent they represent the payment of interest
accrued on the Mortgage Loans during a period subsequent to the
related Prepayment Period), (iii) Liquidation Proceeds, Insurance
Proceeds and proceeds from repurchases of and substitutions for
Mortgage Loans, if any, received in respect of such Mortgage Loans
after the calendar month preceding the month of such Distribution
Date, (iv) amounts reimbursable or payable to the Depositor, the
Originator, the Servicer, the Securities Administrator, the
Trustee, the Trust Oversight Manager, the Custodian or any
Sub-Servicer pursuant to Section 3.11 or Section 3.12 or otherwise
payable in respect of Extraordinary Trust Fund Expenses, (v)
amounts deposited in the Collection Account or the Distribution
Account in error, (vi) the amount of any Prepayment Premiums
collected by the Servicer in connection with the voluntary
Principal Prepayment in full of any of the Mortgage Loans or the
Servicer Prepayment Premium Payment Amount and (vii) any Net Swap
Payment or Swap Termination Payment owed to the Swap Provider
(other than any Swap Termination Payment owed to the Swap Provider
resulting from a Swap Provider Trigger Event).
“Balloon Loan” Any
Mortgage Loan which, by its terms, does not fully amortize the
principal balance thereof by its stated maturity and thus requires
a payment at the stated maturity larger than the monthly payments
due thereunder.
“Bankruptcy Code”: The
Bankruptcy Reform Act of 1978 (Title 11 of the United States Code),
as amended.
“Bankruptcy Loss”: With
respect to any Mortgage Loan, a Realized Loss resulting from a
Deficient Valuation (i.e. “principal cramdown”) or Debt
Service Reduction (i.e. “interest
cramdown”).
“Book-Entry Certificate”: As
specified in the Preliminary Statement.
“Book-Entry Custodian”: The
custodian appointed pursuant to Section 5.01 herein.
“Business Day”: Any day other
than a Saturday, a Sunday or a day on which banking or savings and
loan institutions in the State of California, the State of Florida,
the Commonwealth of Pennsylvania, the State of New York, the State
of Minnesota or the cities 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 one of the
certificates issued under this Agreement in substantially the forms
attached hereto as Exhibit A-1 through Exhibit A-5.
“Certificate Factor”: With
respect to any Class of LIBOR Certificates as of any Distribution
Date, a fraction, expressed as a decimal carried to six places, the
numerator of which is the aggregate Class Principal Amount of such
Class of Certificates on such Distribution Date (after giving
effect to any distributions of principal and allocations of
Realized Losses in reduction of the Class Principal Amount of such
Class of Certificates to be made on such Distribution Date), and
the denominator of which is the initial aggregate Class Principal
Amount of such Class of Certificates as of the Closing
Date.
“Certificate Margin”: As to
any Class of LIBOR Certificates, the respective amount set forth
below:
|
|
Certificate Margin
|
|
Class
|
(1)
|
(2)
|
|
A-1A
|
0.225%
|
0.450%
|
|
A-1B
|
0.290%
|
0.580%
|
|
A-2
|
0.080%
|
0.160%
|
|
A-3
|
0.240%
|
0.480%
|
|
A-4
|
0.320%
|
0.640%
|
|
M-1
|
0.430%
|
0.645%
|
|
M-2
|
0.450%
|
0.675%
|
|
M-3
|
0.480%
|
0.720%
|
|
M-4
|
0.620%
|
0.930%
|
|
M-5
|
0.650%
|
0.975%
|
|
M-6
|
0.710%
|
1.065%
|
|
M-7
|
1.650%
|
2.475%
|
|
M-8
|
2.150%
|
3.225%
|
|
M-9
|
2.250%
|
3.375%
|
|
M-10
|
2.250%
|
3.375%
|
|
M-11
|
2.250%
|
3.375%
|
(1)
To and including the Optional Termination
Date.
(2)
After the Optional Termination
Date.
“Certificate Owner”: With
respect to a Book-Entry Certificate, the Person who is the
beneficial owner of such Certificate as reflected on the books of
the Depository or on the books of a Depository Participant or on
the books of an indirect participating brokerage firm for which a
Depository Participant acts as agent.
“Certificate Register” and
“Certificate Registrar”: The register maintained and
the registrar appointed pursuant to Section 5.02 herein.
“Certificateholder” or
“Holder”: The Person in whose name a Certificate or
Uncertificated Interest is registered in the Certificate Register,
except that a Disqualified Organization or a Non-United States
Person shall not be a Holder of a Residual Certificate for any
purposes hereof and, solely for the purposes of giving any consent
pursuant to this Agreement, any Certificate registered in the name
of the Depositor or the Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is
entitled shall not be taken into account in determining whether the
requisite percentage of Voting Rights necessary to effect any such
consent has been obtained, except as otherwise provided in Section
11.01. The Securities Administrator may conclusively rely
upon a certificate of the Depositor or the Servicer in determining
whether a Certificate is held by an Affiliate thereof. All
references herein to “Holders” or
“Certificateholders” shall reflect the rights of
Certificate Owners as they may indirectly exercise such rights
through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Securities
Administrator shall be required to recognize as a
“Holder” or “Certificateholder” only the
Person in whose name a Certificate is registered in the Certificate
Register.
“Charged-off Mortgage Loan”:
As defined in Section 3.01 herein.
“Class”: All of the
Certificates bearing the same class designation as set forth in the
Preliminary Statement.
“Class A Principal Distribution
Amount”: For any Distribution Date, is an amount equal to the
excess of (x) the aggregate Class Principal Amount of the Senior
Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (1) 52.80% and (2) the Pool
Principal Balance as of the last day of the related Due Period and
(B) the Pool Principal Balance as of the last day of the related
Due Period minus the Overcollateralization Floor.
“Class C Distribution
Amount”: With respect to any Distribution Date the sum of
(i) the Overcollateralization Release Amount for that
Distribution Date, if any, and (ii) the product of (x) a
notional amount, equal to the aggregate Stated Principal Balance of
the Mortgage Loans as of the first day of the month of such
Distribution Date (after giving effect to Monthly Payments of
principal due on such date), and (y) the Pass-Through Rate for
the Class C Interest for such Distribution Date as set forth in
footnote (2) to the Master REMIC under Section 1.03 herein, less
(iii) distributions made pursuant to Section
4.01(a)(3)(i)-(xli) on such Distribution Date.
“Class Exemption”: A class
exemption granted by the U.S. Department of Labor, which provides
relief from certain of the prohibited transaction provisions of
ERISA and the related excise tax provisions of the Code.
“Class M-1 Principal Distribution
Amount”: With respect to any Distribution Date, the excess of
(x) the sum of (i) the aggregate Class Principal Amount
of the Senior Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution
Date) and (ii) the Class Principal Amount of the Class M-1
Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 59.90% and
(ii) the Pool Principal Balance as of the last day of the
related Due Period and (B) the Pool Principal Balance as of
the last day of the related Due Period minus the
Overcollateralization Floor.
“Class M-2 Principal Distribution
Amount”: With respect to any Distribution Date, the excess of
(x) the sum of (i) the aggregate Class Principal Amount
of the Senior Certificates (after taking into account the payment
of the related Class A Principal Distribution Amount on such
Distribution Date), (ii) the Class Principal Amount 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 Class Principal Amount of the Class M-2
Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 66.40% and
(ii) the Pool Principal Balance as of the last day of the
related Due Period and (B) the Pool Principal Balance as of
the last day of the related Due Period minus the
Overcollateralization Floor.
“Class M-3 Principal Distribution
Amount”: With respect to any Distribution Date, the excess of
(x) the sum of (i) the aggregate Class Principal Amount
of the Senior Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Class Principal Amount 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 Class Principal Amount 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
Class Principal Amount of the Class M-3 Certificates immediately
prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 70.50% and (ii) the Pool
Principal Balance as of the last day of the related Due Period and
(B) the Pool Principal Balance as of the last day of the
related Due Period minus the Overcollateralization
Floor.
“Class M-4 Principal Distribution
Amount”: With respect to any Distribution Date, the excess of
(x) the sum of (i) the aggregate Class Principal Amount
of the Senior Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Class Principal Amount 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 Class Principal Amount 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 Class
Principal Amount 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 (iv) the Class Principal Amount
of the Class M-4 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product
of (i) 73.90% and (ii) the Pool Principal Balance as of
the last day of the related Due Period and (B) the Pool
Principal Balance as of the last day of the related Due Period
minus the Overcollateralization Floor.
“Class M-5 Principal Distribution
Amount”: With respect to any Distribution Date, the excess of
(x) the sum of (i) the aggregate Class Principal Amount
of the Senior Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Class Principal Amount 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 Class Principal Amount 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 Class
Principal Amount 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 Class Principal Amount of
the Class M-4 Certificates (after taking into account the payment
of the Class M-4 Principal Distribution Amount on such Distribution
Date) and (vi) the Class Principal Amount of the Class M-5
Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 77.10% and
(ii) the Pool Principal Balance as of the last day of the
related Due Period and (B) the Pool Principal Balance as of
the last day of the related Due Period minus the
Overcollateralization Floor.
“Class M-6 Principal Distribution
Amount”: With respect to any Distribution Date, the excess of
(x) the sum of (i) the aggregate Class Principal Amount
of the Senior Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Class Principal Amount 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 Class Principal Amount 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 Class
Principal Amount 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 Class Principal Amount of
the Class M-4 Certificates (after taking into account the payment
of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Class Principal Amount of the Class M-5
Certificates (after taking into account the payment of the Class
M-5 Principal Distribution Amount on such Distribution Date) and
(vii) the Class Principal Amount of the Class M-6 Certificates
immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 80.00% and (ii) the
Pool Principal Balance as of the last day of the related Due Period
and (B) the Pool Principal Balance as of the last day of the
related Due Period minus the Overcollateralization
Floor.
“Class M-7 Principal Distribution
Amount”: With respect to any Distribution Date, the excess of
(x) the sum of (i) the aggregate Class Principal Amount
of the Senior Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Class Principal Amount 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 Class Principal Amount 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 Class
Principal Amount 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 Class Principal Amount of
the Class M-4 Certificates (after taking into account the payment
of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Class Principal Amount of the Class M-5
Certificates (after taking into account the payment of the Class
M-5 Principal Distribution Amount on such Distribution Date),
(vii) the Class Principal Amount of the Class M-6 Certificates
(after taking into account the payment of the Class M-6 Principal
Distribution Amount on such Distribution Date) and (viii) the
Class Principal Amount of the Class M-7 Certificates immediately
prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 82.80% and (ii) the Pool
Principal Balance as of the last day of the related Due Period and
(B) the Pool Principal Balance as of the last day of the
related Due Period minus the Overcollateralization
Floor.
“Class M-8 Principal Distribution
Amount”: With respect to any Distribution Date, the excess of
(x) the sum of (i) the aggregate Class Principal Amount
of the Senior Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Class Principal Amount 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 Class Principal Amount 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 Class
Principal Amount 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 Class Principal Amount of
the Class M-4 Certificates (after taking into account the payment
of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Class Principal Amount of the Class M-5
Certificates (after taking into account the payment of the Class
M-5 Principal Distribution Amount on such Distribution Date),
(vii) the Class Principal Amount of the Class M-6 Certificates
(after taking into account the payment of the Class M-6 Principal
Distribution Amount on such Distribution Date), (viii) the
Class Principal Amount of the Class M-7 Certificates (after taking
into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date) and (ix) the Class Principal
Amount of the Class M-8 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product
of (i) 85.20% and (ii) the Pool Principal Balance as of
the last day of the related Due Period and (B) the Pool
Principal Balance as of the last day of the related Due Period
minus the Overcollateralization Floor.
“Class M-9 Principal Distribution
Amount”: With respect to any Distribution Date, the excess of
(x) the sum of (i) the aggregate Class Principal Amount
of the Senior Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Class Principal Amount 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 Class Principal Amount 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 Class
Principal Amount 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 Class Principal Amount of
the Class M-4 Certificates (after taking into account the payment
of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Class Principal Amount of the Class M-5
Certificates (after taking into account the payment of the Class
M-5 Principal Distribution Amount on such Distribution Date),
(vii) the Class Principal Amount of the Class M-6 Certificates
(after taking into account the payment of the Class M-6 Principal
Distribution Amount on such Distribution Date), (viii) the
Class Principal Amount of the Class M-7 Certificates (after taking
into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Class Principal Amount
of the Class M-8 Certificates (after taking into account the
payment of the Class M-8 Principal Distribution Amount on such
Distribution Date) and (x) the Class Principal Amount of the
Class M-9 Certificates immediately prior to such Distribution Date
over (y) the lesser of (A) the product of (i) 87.40%
and (ii) the Pool Principal Balance as of the last day of the
related Due Period and (B) the Pool Principal Balance as of
the last day of the related Due Period minus the
Overcollateralization Floor.
“Class M-10 Principal Distribution
Amount”: With respect to any Distribution Date, the excess of
(x) the sum of (i) the aggregate Class Principal Amount
of the Senior Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Class Principal Amount 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 Class Principal Amount 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 Class
Principal Amount 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 Class Principal Amount of
the Class M-4 Certificates (after taking into account the payment
of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Class Principal Amount of the Class M-5
Certificates (after taking into account the payment of the Class
M-5 Principal Distribution Amount on such Distribution Date),
(vii) the Class Principal Amount of the Class M-6 Certificates
(after taking into account the payment of the Class M-6 Principal
Distribution Amount on such Distribution Date), (viii) the
Class Principal Amount of the Class M-7 Certificates (after taking
into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Class Principal Amount
of the Class M-8 Certificates (after taking into account the
payment of the Class M-8 Principal Distribution Amount on such
Distribution Date), (x) the Class Principal Amount of the Class M-9
Certificates (after taking into account the payment of the Class
M-9 Principal Distribution Amount on such Distribution Date) and
(xi) the Class Principal Amount of the Class M-10 Certificates
immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 89.60% and (ii) the
Pool Principal Balance as of the last day of the related Due Period
and (B) the Pool Principal Balance as of the last day of the
related Due Period minus the Overcollateralization
Floor.
“Class M-11 Principal Distribution
Amount”: With respect to any Distribution Date, the excess of
(x) the sum of (i) the aggregate Class Principal Amount
of the Senior Certificates (after taking into account the payment
of the Class A Principal Distribution Amount on such Distribution
Date), (ii) the Class Principal Amount 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 Class Principal Amount 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 Class
Principal Amount 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 Class Principal Amount of
the Class M-4 Certificates (after taking into account the payment
of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Class Principal Amount of the Class M-5
Certificates (after taking into account the payment of the Class
M-5 Principal Distribution Amount on such Distribution Date),
(vii) the Class Principal Amount of the Class M-6 Certificates
(after taking into account the payment of the Class M-6 Principal
Distribution Amount on such Distribution Date), (viii) the
Class Principal Amount of the Class M-7 Certificates (after taking
into account the payment of the Class M-7 Principal Distribution
Amount on such Distribution Date), (ix) the Class Principal Amount
of the Class M-8 Certificates (after taking into account the
payment of the Class M-8 Principal Distribution Amount on such
Distribution Date), (x) the Class Principal Amount of the Class M-9
Certificates (after taking into account the payment of the Class
M-9 Principal Distribution Amount on such Distribution Date), (xi)
the Class Principal Amount of the Class M-10 Certificates (after
taking into account the payment of the Class M-10 Principal
Distribution Amount on such Distribution Date) and (xii) the
Class Principal Amount of the Class M-11 Certificates immediately
prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 91.60% and (ii) the Pool
Principal Balance as of the last day of the related Due Period and
(B) the Pool Principal Balance as of the last day of the
related Due Period minus the Overcollateralization
Floor.
“Class Principal Amount”:
With respect to any Class of Certificates, other than the Residual
and Class C Certificates, as of any Distribution Date, the Class
Principal Amount thereof on the Closing Date (the “Original
Class Principal Amount”) reduced by the sum of (a) all
amounts actually distributed in respect of principal of such Class
and (b) with respect to the Mezzanine Certificates, any reductions
in their respective Class Principal Amounts deemed to have occurred
in connection with allocations of Realized Losses on all prior
Distribution Dates pursuant to Section 4.04(b) plus any increase to
a Class Principal Amount pursuant to Section 4.04(d).
“Closing Date”: December 21,
2005.
“Code”: The Internal Revenue
Code of 1986, including any successor or amendatory
provisions.
“Collection Account”: The
account or accounts created and maintained by the Servicer pursuant
to Section 3.10(a), which shall be entitled “Option One
Mortgage Corporation, as Servicer for U.S. Bank National
Association, as Trustee, in trust for the registered holders of
J.P. Morgan Mortgage Acquisition Corp. 2005-OPT2. The
Collection Account must be an Eligible Account.
“Commission”: The Securities
and Exchange Commission.
“Compensating Interest”: As
defined in Section 3.24 herein.
“Controlling Person”: The
Holders of the majority Percentage Interest of the Class C
Certificates.
“Corporate Trust Office”: The
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 offices at the date of the execution
of this instrument is located 209 S. LaSalle Street, Suite 300,
Chicago, IL 60604, Attention: JPMAC – OPT2, or at such
other address as the Trustee may designate from time to time by
notice to the Certificateholders, the Securities Administrator, the
Depositor and the Servicer. With respect to the Securities
Administrator, 4 New York Plaza, 6th Floor, New York, New York
10004, Attention: Worldwide Securities Services/Structured
Finance Services – JPMAC 2005-OPT2 or at such other address
as the Securities Administrator may designate from time to time by
notice to the Certificateholders, the Trustee, the Depositor and
the Servicer. For purposes of presenting Certificates for
final payment at 2001 Bryan Street, 9th Floor, Dallas, Texas 75201,
Attention: Worldwide Securities Services/Structured Finance
Payment Area – JPMAC 2005-OPT2.
“Corresponding Classes of
Certificates”: With respect to each REMIC Regular Interest,
any Class of Certificates appearing opposite such REMIC Regular
Interest in Section 1.03 hereof.
“CPR”: A prepayment
assumption that represents an annualized constant assumed rate of
prepayment each month of a pool of mortgage loans relative to its
outstanding principal balance for the life of such pool.
“Credit Repositories”: Each
of Equifax, Transunion, and Experian, or their respective
successors in interest.
“Custodial Agreement”: Any
custodial agreement between the Seller and the Custodian providing
for the safekeeping of any documents or instruments referred to in
Section 2.01 on behalf of the Certificateholders.
“Custodial File”: A Mortgage
File held by a Custodian on behalf of the Trustee.
“Custodian”: A custodian that
is appointed pursuant to a Custodial Agreement. Any Custodian
so appointed shall act as agent on behalf of the Trustee, and shall
be compensated by the Depositor. The initial Custodian shall
be Wells Fargo Bank, N.A.
“Custodian Fee”: As to
any Distribution Date, an amount calculated by the Custodian
pursuant to the Custodial Agreement and invoiced monthly to the
Securities Administrator, to be paid by the Securities
Administrator pursuant to Section 4.01 of this
Agreement.
“Custodian Fee Rate”:
The Custodian Fee divided by the aggregate Stated Principal
Balance of the Mortgage Loans.
“Cut-off Date”: With respect
to each Mortgage Loan (other than a Qualified Substitute Mortgage
Loan), the close of business on December 1, 2005. With
respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the
“Cut-off Date,” when used with respect to more than one
Mortgage Loan, shall be to the respective Cut-off Dates for such
Mortgage Loans.
“Debt Service Reduction”:
With respect to any Mortgage Loan, a reduction in the scheduled
Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such
a reduction resulting from a Deficient Valuation.
“Deficient Valuation”:
With respect to any Mortgage Loan, a valuation of the related
Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the
Mortgage Loan, which valuation results from a proceeding initiated
under the Bankruptcy Code.
“Definitive Certificates”: As
defined in Section 5.01(b) herein.
“Deleted Mortgage Loan”: A
Mortgage Loan replaced or to be replaced by a Qualified Substitute
Mortgage Loan.
“Delinquency Percentage”:
With respect to the last day of a Due Period, the percentage
equivalent of a fraction, the numerator of which is the aggregate
Stated Principal Balance of all Mortgage Loans that, as of the last
day of the previous calendar month, are 60 or more days Delinquent,
are in foreclosure, have been converted to REO Properties or have
been discharged by reason of bankruptcy, and the denominator of
which is the aggregate Stated Principal Balance of the Mortgage
Loans and REO Properties as of the last day of the previous
calendar month.
“Delinquent”: A Mortgage Loan
is “Delinquent” if any Monthly Payment due on a Due
Date is not made by the close of business on the next scheduled Due
Date for that Mortgage Loan (including all foreclosures,
bankruptcies and REO Properties). A Mortgage Loan is
“30 days Delinquent” if the Monthly Payment has not
been received by the close of business on the corresponding day of
the month immediately succeeding the month in which that Monthly
Payment was due or, if there was no corresponding date (e.g., as
when a 30-day month follows a 31-day month in which the payment was
due on the 31st day of that month), then on the last day of that
immediately succeeding month; and similarly for “60 days
Delinquent” and “90 days Delinquent,” etc.
“Depositor”: J.P. Morgan
Acceptance Corporation I, a Delaware corporation having its
principal place of business in New York, or its successors in
interest.
“Depositor Certification”: As
defined in Section 4.06(b) herein, a form of which is attached
hereto as Exhibit H.
“Depository”: The Depository
Trust Company, or any successor Depository hereafter named.
The nominee of the initial Depository, for purposes of
registering those Certificates that are to be Book-Entry
Certificates, is CEDE & Co. The Depository shall at all
times be a “clearing corporation” as defined in Section
8-102(a)(5) of the Uniform Commercial Code of the State of New York
and a “clearing agency” registered pursuant to the
provisions of Section 17A of the Exchange Act.
“Depository Institution”: Any
depository institution or trust company, including the Trustee,
that (a) is incorporated under the laws of the United States of
America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has
outstanding unsecured commercial paper or other short-term
unsecured debt obligations that are rated F-1 by Fitch, A-1 by
S&P and P-1 by Moody’s (or comparable ratings if Fitch,
S&P and Moody’s are not the Rating Agencies).
“Depository Participant”: A
broker, dealer, bank or other financial institution or other Person
for whom from time to time a Depository effects book-entry
transfers and pledges of securities deposited with the
Depository.
“Determination Date”: With
respect to each Distribution Date, the 15th day of the calendar
month in which such Distribution Date occurs or, if such 15th day
is not a Business Day, the Business Day immediately preceding such
15th day.
“Directly Operate”: With
respect to any REO Property, the furnishing or rendering of
services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon
or any use of such REO Property in a trade or business conducted by
the Trust Fund other than through an Independent Contractor;
provided, however, that the Trustee (or the Servicer on behalf of
the Trustee) shall not be considered to Directly Operate an REO
Property solely because the Trustee (or the Servicer on behalf of
the Trustee) establishes rental terms, chooses tenants, enters into
or renews leases, deals with taxes and insurance, or makes
decisions as to repairs or capital expenditures with respect to
such REO Property.
“Disqualified Organization”:
Any of the following: (i) the United States, any State or political
subdivision thereof, any possession of the United States, or any
agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are
subject to tax and, except for Freddie Mac, a majority of its board
of directors is not selected by such governmental unit), (ii) any
foreign government, any international organization, or any agency
or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers’ cooperatives described in
Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric
and telephone cooperatives described in Section 1381(a)(2)(C) of
the Code, (v) an “electing large partnership” within
the meaning of Section 775 of the Code and (vi) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the
holding of an Ownership Interest in a Residual Certificate by such
Person may cause any REMIC created hereunder, or any Person having
an Ownership Interest in any Class of Certificates (other than such
Person) to incur a liability for any federal tax imposed under the
Code that would not otherwise be imposed but for the Transfer of an
Ownership Interest in a Residual Certificate to such Person.
The terms “United States,” “State”
and “international organization” shall have the
meanings set forth in Section 7701 of the Code or successor
provisions.
“Distribution Account”: The
trust account or accounts created and maintained by the Securities
Administrator pursuant to Section 3.10(b) which shall be entitled
“Distribution Account, U.S. Bank National Association, as
Trustee, in trust for the registered holders of J.P. Morgan
Mortgage Acquisition Corp. 2005-OPT2. The Distribution
Account must be an Eligible Account.
“Distribution Date”: The 25th
day of any month, or if such 25th day is not a Business Day, the
Business Day immediately following such 25th day, commencing in
January 2006.
“Downgrade Provisions”:
The provisions of the Swap Agreement which are triggered if
the short-term or long-term credit ratings of the Swap Provider
fall below certain levels specified in the Swap
Agreement.
“Due Date”: With respect to
each Distribution Date and each Mortgage Loan (a) that has a
Monthly Payment due on the first day of the month, the first day of
the month and (b) that has a Monthly Payment due on a day other
than the first day of the month, such Mortgage Loan will be treated
as if the Monthly Payment is due on the first day of the
immediately succeeding month, in each case, exclusive of any days
of grace in the related Due Period.
“Due Period”: With respect to
any Distribution Date, the period commencing on the second day of
the month immediately preceding the month in which such
Distribution Date occurs and ending on the first day of the month
in which such Distribution Date occurs.
“EDGAR”: The
Commission’s Electronic Data Gathering and Retrieval
System.
“Eligible
Account”: Either (1) an account or accounts maintained with a
federal or state-chartered Depository Institution or trust company
acceptable to the Rating Agencies and shall be: (a) commercial
paper, short-term debt obligation, or other short-term deposits
rated at least “A-1+” by S&P and F-1+ by Fitch if
the deposits are to be held in the account for less than 30 days;
or (b) long term unsecured debt obligations rated at least
“AA-” by S&P and “A+” by Fitch if the
deposits are to be held in the account more than 30 days; following
a downgrade, withdrawal, or suspension of such institution’s
rating, each account should promptly (and in any case within not
more than 10 calendar days) be moved to a qualifying institution or
to one or more segregated trust accounts in the trust department of
such institution, if permitted; or (2) a segregated trust account
or accounts maintained with the corporate trust department of a
federal depository institution or state-chartered depository
institution subject to regulations regarding fiduciary funds on
deposit similar to Title 12 of the Code of Federal Regulation
Section 9.10(b), which, in either case, has corporate trust powers,
acting in its fiduciary capacity. Eligible Accounts may bear
interest.
“ERISA”: The Employee
Retirement Income Security Act of 1974, as amended.
“ERISA-Qualifying
Underwriting”: A best efforts or firm commitment underwriting
or private placement that meets the requirements (without regard to
the ratings requirements) of an Underwriter’s
Exemption.
“ERISA-Restricted
Certificate”: The Class M-10, Class M-11, Class C,
Class P, Residual and any Certificate that does not satisfy the
applicable rating requirement under the Underwriter’s
Exemption and the Uncertificated Interest.
“ERISA-Restricted Swap
Certificate”: The Offered Certificates.
“Estate in Real Property”: A
fee simple estate in a parcel of land.
“Events of Default”: Under
the Swap Agreement (each a Swap Default), among others, the
following standard events of default under the ISDA Master
Agreement:
·
Failure to Pay or Deliver,
·
“Bankruptcy” (as amended in
the Swap Agreement) and
·
“Merger without Assumption”
(but only with respect to the Swap Provider), as described in
Sections 5(a)(i), 5(a)(vii) and 5(a)(viii) of the ISDA Master
Agreement.
“Excess Overcollateralized
Amount”: With respect to 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.
“Exchange Act”: The
Securities Exchange Act of 1934, as amended.
“Extraordinary Trust Fund
Expense”: Any amounts payable or reimbursable to the
Securities Administrator, the Trustee, the Custodian or any
director, officer, employee or agent of the Securities
Administrator, the Custodian or the Trustee, from the Trust Fund
pursuant to Section 2.02, 2.03, 7.01(c), 8.05 or 8.15 and any
amounts payable from the Distribution Account in respect of taxes
pursuant to Section 10.01(g)(iii), any amounts payable from the
Distribution Account in respect of any REMIC administration
pursuant to Section 10.01(c).
“Fair Market Value”: An
amount equal to the fair market value of all of the property of the
Trust Fund, as agreed upon between the Servicer and a majority of
the holders of the Uncertificated Interests; provided, however,
that if the Servicer and a majority of the holders of the
Uncertificated Interests do not agree upon the fair market value of
all of such property of the Trust Fund, the Servicer, or an agent
appointed by the Servicer, shall solicit bids for all of such
property of the Trust Fund, until it has received three bids, and
the Fair Market Value shall be equal to the highest of such three
bids.
“Fannie Mae”: Fannie Mae,
formerly known as Federal National Mortgage Association, or any
successor thereto.
“FDIC”: Federal Deposit
Insurance Corporation or any successor thereto.
“Federal Funds Rate”: The
interest rate at which depository institutions lend balances at the
Federal Reserve to other depository institutions
overnight.
“Final Distribution Date”:
The Distribution Date in December 2035.
“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 Seller, the Depositor or the Servicer, as the case
may be, pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01, as applicable), a determination made by
the Servicer that all Insurance Proceeds, Liquidation Proceeds and
other payments or recoveries which the Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Servicer shall maintain
records, prepared by a Servicing Officer, of each Final Recovery
Determination made thereby.
“First Lien”: With respect to
any second lien Mortgage Loan, the mortgage loan relating to the
corresponding Mortgaged Property having a first priority
lien.
“Fitch”: Fitch Ratings, or
its successor in interest thereto.
“Fixed Rate Mortgage Loan”:
Each of the Mortgage Loans identified in the Mortgage Loan Schedule
as having a Mortgage Rate that is fixed.
“Fixed Rate PPC”: A CPR of
4.00% per annum of the then unpaid principal balance of such
Mortgage Loans in the first month of the life of such Mortgage
Loans and an additional approximately 1.4545% (precisely 16/11) per
annum in each month thereafter until the 12th month.
Beginning in the 12th month and in each month thereafter
during the life of such Mortgage Loans, a CPR of 20%.
“Fixed Swap Payment”: With
respect to any Distribution Date, a fixed amount equal to the fixed
swap payment for such Distribution Date as set forth on Schedule 3
attached hereto.
“Floating Swap Payment”: With
respect to any Distribution Date, a floating amount equal to the
product of (i) LIBOR (as determined pursuant to the Swap Agreement
for such Distribution Date), (ii) the related swap balance (as set
forth on Schedule 3 attached hereto) and (iii) a fraction, the
numerator of which is the actual number of days elapsed from and
including the previous Distribution Date to but excluding the
current Distribution Date (or, for the first Distribution Date, the
actual number of days elapsed from and including the Closing Date
to but excluding the first Distribution Date), and the denominator
of which is 360.
“Formula Rate”: As to any
Class of LIBOR Certificates and any Distribution Date, the sum of
One-Month LIBOR and the applicable Certificate Margin.
“Freddie Mac”: Freddie Mac,
formerly known as Federal Home Loan Mortgage Corporation, or any
successor thereto.
“Group”: Either Group 1 or
Group 2, as applicable.
“Group 1”: Those certain
Mortgage Loans identified as belonging to Group 1 on the Mortgage
Loan Schedule.
“Group 1 Basic Principal
Distribution Amount”: With respect to any Distribution Date,
the excess of (i) the Group 1 Principal Remittance Amount for such
Distribution Date over (ii) the product of (a) the
Overcollateralization Release Amount, if any, for such Distribution
Date and (b) the Group 1 Percentage.
“Group 1 Certificates”: The
Class A-1A and Class A-1B Certificates.
“Group 1 Interest Remittance
Amount”: With respect to any Distribution Date is that
portion of the Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the
Group 1 Mortgage Loans and Compensating Interest paid by the
Servicer with respect to the Group 1 Mortgage Loans.
“Group 1 Mortgage Loans”: The
Mortgage Loans relating to Group 1.
“Group 1 Percentage”: An
amount equal to, with respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the
Group 1 Principal Remittance Amount for such Distribution Date and
the denominator of which is the Principal Remittance Amount for
such Distribution Date.
“Group 1 Principal Distribution
Amount”: With respect to any Distribution Date is the sum of
(i) the Group 1 Basic Principal Distribution Amount for such
Distribution Date and (ii) the product of (a) the
Overcollateralization Increase Amount for such Distribution Date
and (b) the Group 1 Percentage.
“Group 1 Principal Remittance
Amount”: Means, with respect to any Distribution Date, the
portion of the Principal Remittance Amount for such Distribution
Date derived from the Group 1 Mortgage Loans.
“Group 1 Senior Principal
Distribution Amount”: with respect to any Distribution Date,
is an amount equal to the Class A Principal Distribution Amount
multiplied by the Group 1 Percentage.
“Group 2”: Those certain
Mortgage Loans identified as belonging to Group 2 on the Mortgage
Loan Schedule.
“Group 2 Basic Principal
Distribution Amount”: With respect to any Distribution Date
is the excess of (i) the Group 2 Principal Remittance Amount for
such Distribution Date over (ii) the product of (a) the
Overcollateralization Release Amount, if any, for such Distribution
Date and (b) the Group 2 Percentage.
“Group 2 Certificates”: The
Class A-2, Class A-3 and Class A-4 Certificates.
“Group 2 Interest Remittance
Amount”: With respect to any Distribution Date is that
portion of the Available Funds for such Distribution Date
attributable to interest received or advanced with respect to the
Group 2 Mortgage Loans and Compensating Interest paid by the
Servicer with respect to the Group 2 Mortgage Loans.
“Group 2 Mortgage Loans”: The
Mortgage Loans relating to Group 2.
“Group 2 Percentage”: Is an
amount equal to, with respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the
Group 2 Principal Remittance Amount for such Distribution Date and
the denominator of which is the Principal Remittance Amount for
such Distribution Date.
“Group 2 Principal Distribution
Amount”: With respect to any Distribution Date is the sum of
(i) the Group 2 Basic Principal Distribution Amount for such
Distribution Date and (ii) the product of (a) the
Overcollateralization Increase Amount for such Distribution Date
and (b) the Group 2 Percentage.
“Group 2 Principal Remittance
Amount”: Means, with respect to any Distribution Date,
the portion of the Principal Remittance Amount for such
Distribution Date derived from the Group 2 Mortgage
Loans.
“Group 2 Senior Principal
Distribution Amount”: with respect to any Distribution
Date, is an amount equal to the Class A Principal Distribution
Amount multiplied by the Group 2 Percentage.
“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.
“Independent”: When used with
respect to any specified Person, any such Person who (a) is in fact
independent of the Depositor, the Servicer and their respective
Affiliates, (b) does not have any direct financial interest in or
any material indirect financial interest in the Depositor, the
Servicer or any Affiliate thereof, and (c) is not connected with
the Depositor, the 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, the
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 Servicer or any Affiliate thereof, as the case
may be.
“Independent Contractor”:
Either (i) any Person (other than the Servicer) that would be an
“independent contractor” with respect to the Trust Fund
within the meaning of Section 856(d)(3) of the Code if the Trust
Fund were a real estate investment trust (except that the ownership
tests set forth in that section shall be considered to be met by
any Person that owns, directly or indirectly, 35% or less of any
Class of Certificates), so long as the Trust Fund does not receive
or derive any income from such Person and provided that the
relationship between such Person and the Trust Fund is at
arm’s length, all within the meaning of Treasury Regulation
Section 1.856-4(b)(5), or (ii) any other Person (including the
Servicer) if the Securities Administrator has received an Opinion
of Counsel to the effect that the taking of any action in respect
of any REO Property by such Person, subject to any conditions
therein specified, that is otherwise herein contemplated to be
taken by an Independent Contractor will not cause such REO Property
to cease to qualify as “foreclosure property” within
the meaning of Section 860G(a)(8) of the Code (determined without
regard to the exception applicable for purposes of Section 860D(a)
of the Code), or cause any income realized in respect of such REO
Property to fail to qualify as Rents from Real Property.
“Index”: With respect to each
Adjustable Rate Mortgage Loan and each related Adjustment Date, the
index as specified in the related Mortgage Note.
“Insurance Proceeds”:
Proceeds of any title policy, hazard policy or other insurance
policy covering a Mortgage Loan or related Mortgaged Property, to
the extent such proceeds are not to be applied to the restoration
of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Servicer would follow in
servicing Mortgage Loans held for its own account, subject to the
terms and conditions of the related Mortgage Note and
Mortgage.
“Interest Accrual Period”:
For any Distribution Date and the LIBOR Certificates, will be the
actual number of days (based on a 360-day year) included in the
period commencing on the immediately preceding Distribution Date
(or, in the case of the first such Interest Accrual Period,
commencing on the Closing Date) and ending on the day immediately
preceding such Distribution Date.
“Interest Determination
Date”: With respect to the LIBOR Certificates and any
Interest Accrual Period therefor, the second London Business Day
preceding the commencement of such Interest Accrual
Period.
“Interest Remittance Amount”:
With respect to any Distribution Date, the sum of the Group 1
Interest Remittance Amount and the Group 2 Interest Remittance
Amount.
“ISDA”: International
Swaps and Derivatives Association, Inc.
“ISDA Master Agreement”:
An ISDA Master Agreement (Multicurrency-Cross Border) in the
form published by ISDA in 1992 including the schedule
thereto.
“Late Collections”: With
respect to any Mortgage Loan and any Due Period, all amounts
received subsequent to the Determination Date immediately following
such Due Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest
due (without regard to any acceleration of payments under the
related Mortgage and Mortgage Note) but Delinquent for such Due
Period and not previously recovered.
“Latest Possible Maturity
Date”: The Distribution Date occurring five years after the
Final Distribution Date.
“LIBOR Certificates”: As
specified in the Preliminary Statement.
“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; (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, Section
3.16(c), Section 3.23 or Section 9.01; or (iv) such Mortgage Loan
becomes a Charged-off Mortgage Loan. 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
purchased pursuant to Section 9.01.
“Liquidation Proceeds”: The
amount (other than Insurance Proceeds, Recoveries or amounts
received in respect of the rental of any REO Property prior to REO
Disposition) received by the Servicer in connection with (i) the
taking of all or a part of a Mortgaged Property by exercise of the
power of eminent domain or condemnation (but only to the extent not
required to be released to a Mortgagor pursuant to the related
Mortgage Loan Documents or to the holder of a first lien pursuant
to the mortgage loan documents relating to the first lien), (ii)
the liquidation of a defaulted Mortgage Loan through a
trustee’s sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO
Property pursuant to or as contemplated by Section 2.03, Section
3.16(c), Section 3.23 or Section 9.01.
“Loan-to-Value Ratio” or
“LTV”: With respect to any first lien Mortgage Loan and
as of any date of determination, the fraction, expressed as a
percentage, the numerator of which is the principal balance of the
related Mortgage Loan at such date and the denominator of which is
the Value of the related Mortgaged Property. With respect to
any second lien Mortgage Loan and as of any date of determination,
the fraction, expressed as a percentage, the numerator of which is
the sum of (a) the principal balance of the related Mortgage Loan
at the date of origination plus (b) the principal balance of the
related First Lien at the date of origination of such mortgage loan
and the denominator of which is the Value of the related Mortgaged
Property.
“London Business Day”: Any
day on which banks in the City of London and The City of New York
are open and conducting transactions in United States
dollars.
“Master REMIC”: As defined in
Section 1.03 of this Agreement.
“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.
“Minimum Mortgage Rate”: With
respect to each Adjustable Rate Mortgage Loan, the greater of (a)
the Gross Margin set forth in the related Mortgage Note and (b) the
percentage set forth in the related Mortgage Note as the minimum
Mortgage Rate thereunder.
“Monthly Interest Distributable
Amount”: With respect to any Distribution Date and each Class
of Certificates, other than the Class P, Class R and Class C
Certificates, an amount equal to the amount of interest accrued
during the related Interest Accrual Period at the related
Pass-Through Rate on the Class Principal Amount of such Class of
Certificates immediately prior to such Distribution Date, in each
case, reduced by any Net Prepayment Interest Shortfalls allocated
to such Class of Certificates and any Relief Act Interest
Shortfalls allocated to such Class of Certificates, in each such
case, as such shortfalls are allocated pursuant to Section 1.02
herein.
“Monthly Payment”: With
respect to any Mortgage Loan, the scheduled monthly payment of
principal and interest on such Mortgage Loan which is payable by
the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient
Valuation and/or Debt Service Reduction with respect to such
Mortgage Loan and (ii) any reduction in the amount of interest
collectible from the related Mortgagor pursuant to the Relief Act;
(b) without giving effect to any extension granted or agreed to by
the Servicer pursuant to Section 3.07(a); and (c) on the assumption
that all other amounts, if any, due under such Mortgage Loan are
paid when due.
“Moody’s”:
Moody’s Investors Service, Inc. or its successor in
interest.
“Mortgage”: The mortgage,
deed of trust or other instrument creating a first 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 or Section 2.03(c) of this Agreement, as held from
time to time as a part of the Trust Fund, the Mortgage Loans so
held being identified in the Mortgage Loan Schedule, including each
REO Property unless the context otherwise requires.
“Mortgage Loan Purchase
Agreement”: The agreement among Option One Mortgage
Corporation, certain of its affiliates and J.P. Morgan Mortgage
Acquisition Corp., regarding the sale of the Mortgage Loans to the
Seller.
“Mortgage Loan Schedule”: As
of any date, the list of Mortgage Loans included in the Trust Fund
on such date, attached hereto as Schedule 1. The Mortgage
Loan Schedule shall set forth the following information with
respect to each Mortgage Loan:
(i)
the Mortgagor’s name and the
Originator’s Mortgage Loan identifying number;
(ii)
the street address of the Mortgaged
Property including the state and zip code;
(iii)
a code indicating whether the Mortgaged
Property is owner-occupied;
(iv)
the type of Residential Dwelling
constituting the Mortgaged Property;
(v)
the original months to
maturity;
(vi)
the Loan-to-Value Ratio, at
origination;
(vii)
the Mortgage Rate in effect immediately
following the Cut-off Date;
(viii)
the date on which the first Monthly
Payment was due on the Mortgage Loan;
(ix)
the stated maturity date of such Mortgage
Loan and of the related First Lien, if applicable;
(x)
the amount of the Monthly Payment (a) at
origination and (b) due on the first Due Date after the Cut-off
Date;
(xi)
the last Due Date on which a Monthly
Payment was actually applied to the unpaid Stated Principal
Balance;
(xii)
the original principal amount of the
Mortgage Loan and the original principal balance of the related
First Lien, if applicable, as of the date of
origination;
(xiii)
the Stated Principal Balance of the
Mortgage Loan and the Stated Principal Balance of the related First
Lien, if applicable, as of the close of business on the Cut-off
Date;
(xiv)
with respect to each Adjustable Rate
Mortgage Loan, the Applicable Index and Gross Margin;
(xv)
a code indicating the purpose of the
Mortgage Loan (i.e., purchase financing, rate/term refinancing,
cash-out refinancing);
(xvi)
with respect to each Adjustable Rate
Mortgage Loan, the Maximum Mortgage Rate;
(xvii)
with respect to each Adjustable Rate
Mortgage Loan, the Minimum Mortgage Rate;
(xviii)
the Mortgage Rate at
origination;
(xix)
with respect to each Adjustable Rate
Mortgage Loan, the Periodic Rate Cap and the maximum first
Adjustment Date Mortgage Rate adjustment;
(xx)
a code indicating the documentation
program;
(xxi)
with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the
Cut-off Date and the Adjustment Date frequency;
(xxii)
the Value of the Mortgaged
Property;
(xxiii)
the sale price of the Mortgaged Property,
if applicable;
(xxiv)
the Originator’s risk grade and the
FICO or other credit score of the Mortgagor;
(xxv)
the actual interest “paid to
date” of the Mortgage Loan as of the Cut-off Date;
(xxvi)
the number of years any Prepayment
Premium is in effect;
(xxvii)
the loan type (i.e., fixed, adjustable;
2/28, 3/27, 15/15, etc.);
(xxviii)
the actual unpaid principal balance
of the Mortgage Loan as of the Cut-off Date;
(xxix)
a code indicating whether such Mortgage
Loan is a Group 1 Mortgage Loan or a Group 2 Mortgage
Loan;
(xxx)
a code indicating whether the Mortgage
Loan is a second lien Mortgage Loan; and
(xxxi)
a code indicating whether the Mortgage
Loan is subject to a Prepayment Premium, if any.
The Mortgage Loan Schedule shall set
forth the following information with respect to the Mortgage Loans
in the aggregate as of the Cut-off Date: (1) the number of Mortgage
Loans; (2) the current 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 set forth the aggregate Stated
Principal Balance of the Mortgage Loans. The Mortgage Loan
Schedule shall be amended from time to time by the Depositor in
accordance with the provisions of this Agreement. With
respect to any Qualified Substitute Mortgage Loan, the Cut-off Date
shall refer to the related Cut-off Date for such Mortgage Loan,
determined in accordance with the definition of Cut-off Date
herein.
“Mortgage Note”: The original
executed note or other evidence of the indebtedness of a Mortgagor
under a Mortgage Loan.
“Mortgage Pool”: The pool of
Mortgage Loans, identified on Schedule 1 from time to time, and any
REO Properties acquired in respect thereof.
“Mortgage Rate”: With respect
to each Mortgage Loan, the annual rate at which interest accrues on
such Mortgage Loan from time to time in accordance with the
provisions of the related Mortgage Note. 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 or a leasehold
interest improved by a Residential Dwelling.
“Mortgagor”: The obligor on a
Mortgage Note.
“Net Liquidation Proceeds”:
With respect to any liquidation of a Mortgage Loan or any other
disposition of related Mortgaged Property (including REO Property),
the related Liquidation Proceeds, net of P&I Advances,
Servicing Advances, Servicing Fees and any other fees, received and
retained in connection with the liquidation of such Mortgage Loan
or Mortgaged Property in accordance with the terms of this
Agreement.
“Net Monthly Excess
Cashflow”: With respect to any Distribution Date, an amount
equal to the sum of (i) any Overcollateralization Release Amount
for such Distribution Date and (ii) the positive excess of (x) the
Available Funds for such Distribution Date over (y) the sum for
such Distribution Date of (A) the Monthly Interest Distributable
Amounts for the Senior Certificates and Mezzanine Certificates,
each pursuant to Section 4.01(a)(1), (B) the Unpaid Interest
Shortfall Amounts for the Class A Certificates and (C) the
Principal Remittance Amount.
“Net Mortgage Rate”: With
respect to any Mortgage Loan (or the related REO Property) as of
any date of determination, a per annum rate of interest equal to
the then applicable Mortgage Rate for such Mortgage Loan minus the
sum of Servicing Fee Rate, the Custodian Fee Rate, the Trust
Oversight Manager Fee Rate and the Securities Administrator 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 Swap Payment”: In the
case of payments made by the Supplemental Interest Trust, the
excess, if any, of (x) the Fixed Swap Payment over (y) the Floating
Swap Payment. In the case of payments made by the Swap
Provider, the excess, if any, of (x) the Floating Swap Payment over
(y) the Fixed Swap Payment. In each case, the Net Swap
Payment shall not be less than zero.
“Net WAC Rate”: As to any
Distribution Date, a per annum rate (subject to adjustment based on
the actual number of days elapsed in the Interest Accrual Period)
equal to 12 times the quotient of (x) the total scheduled interest
on the Mortgage Loans for the related Accrual Period, net of the
sum of (1) the Administrative Fee, (2) any Net Swap Payment owed to
the Swap Provider and (3) any Swap Termination Payment (other than
any Swap Termination Payment resulting from a Swap Provider Trigger
Event), payable by the Supplemental Interest Trust and (y) the
aggregate Stated Principal Balance of the Mortgage Loans as of the
first day of the applicable Due Period.
“Net WAC Rate Carryover
Amount”: For any Distribution Date on which the Pass-Through
Rate for any Class of LIBOR Certificates is equal to the related
Net WAC Rate, an amount equal to the sum of (i) the excess of (x)
the amount of interest such Class accrued for such Distribution
Date at the related Formula Rate, over (y) the amount of interest
such Class accrued for such Distribution Date at the related Net
WAC Rate and (ii) the unpaid portion of any Net WAC Rate Carryover
Amount from the prior Distribution Date together with interest
accrued on such unpaid portion for the most recently ended Interest
Accrual Period at the Formula Rate applicable for such Class for
such Interest Accrual Period.
“Net WAC Reserve Fund”: The
Eligible Account established pursuant to Section 3.26.
“New Lease”: Any lease of REO
Property entered into on behalf of the Trust Fund, including any
lease renewed or extended on behalf of the Trust Fund, if the Trust
Fund has the right to renegotiate the terms of such
lease.
“NIMS Insurer”: Any
insurer that is guaranteeing certain payments under notes secured
by collateral which includes all or a portion of the Class C
Certificates, the Class P Certificates and/or the Residual
Certificates.
“Nonrecoverable P&I
Advance”: Any P&I Advance previously made or proposed to
be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer using Accepted
Servicing Practices, will not or, in the case of a proposed P&I
Advance, would not be ultimately recoverable from related Late
Collections, Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or REO Property as provided herein.
“Nonrecoverable Servicing
Advance”: Any Servicing Advance previously made or proposed
to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Servicer using Accepted
Servicing Practices, will not or, in the case of a proposed
Servicing Advance, would not be ultimately recoverable from related
Late Collections, Insurance Proceeds or Liquidation Proceeds on
such Mortgage Loan or REO Property as provided herein.
“Non-United States Person”:
Any Person other than a United States Person.
“Offered Certificates”: As
defined in the Preliminary Statement.
“Offered Subordinate
Certificates”: As specified in the Preliminary
Statement.
“Officers’
Certificate”: With respect to the Depositor and the Seller, a
certificate signed by the Chairman of the Board, the Vice Chairman
of the Board, the President, a vice president (however denominated)
or an authorized agent, and by the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the
Depositor or Seller, as applicable. With respect to the
Servicer, any officer who is authorized to act for the Servicer in
matters relating to this Agreement, and whose action is binding
upon the Servicer, initially including those individuals whose
names appear on the list of authorized officers delivered at the
closing.
“One-Month LIBOR”: With
respect to the LIBOR Certificates and any Interest Accrual Period
therefor, the rate determined by the Securities Administrator on
the related Interest Determination Date (or with respect to the
initial Interest Accrual Period, on the Closing Date based on
information available on the related Interest Determination Date)
on the basis of the offered rate for one-month U.S. dollar
deposits, as such rate appears on Telerate Page 3750 as of 11:00
a.m. (London time) on such Interest Determination Date; provided
that if such rate does not appear on Telerate Page 3750, the rate
for such date will be determined on the basis of the offered rates
of the Reference Banks for one-month U.S. dollar deposits, as of
11:00 a.m. (London time) on such Interest Determination Date.
In such event, the Securities Administrator will request the
principal London office of each of the Reference Banks to provide a
quotation of its rate. If on such Interest Determination
Date, two or more Reference Banks provide such offered quotations,
One-Month LIBOR for the related Interest Accrual Period shall be
the arithmetic mean of such offered quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If on such
Interest Determination Date, fewer than two Reference Banks provide
such offered quotations, One-Month LIBOR for the related Interest
Accrual Period shall be the higher of (i) LIBOR as determined on
the previous Interest Determination Date and (ii) the Reserve
Interest Rate. Notwithstanding the foregoing, if, under the
priorities described above, LIBOR for an Interest Determination
Date would be based on LIBOR for the previous Interest
Determination Date for the third consecutive Interest Determination
Date, the Depositor shall select an alternative comparable index
(over which the Depositor has no control), used for determining
one-month Eurodollar lending rates that is calculated and published
(or otherwise made available) by an independent party.
“Operative Documents”: This
Agreement, the Mortgage Loan Purchase Agreement, the Reconstitution
Agreement, the Custodial Agreement, the Assignment and Assumption
Agreement and any other documents related hereto or
thereto.
“Opinion of Counsel”: A
written opinion of counsel, who may, without limitation, be
salaried counsel for the Depositor or the Servicer and which shall
be acceptable to the Securities Administrator and the Trustee
(which acceptance shall not be unreasonably withheld), except that
any opinion of counsel relating to (a) the qualification of any
REMIC created hereunder or (b) compliance with the REMIC Provisions
must be an opinion of Independent counsel.
“Option One”: Option One
Mortgage Corporation, a California Corporation or its successor in
interest.
“Optional Termination Date”:
The first Distribution Date that the Servicer shall be permitted to
purchase the Mortgage Loans and REO Properties pursuant to Section
9.01(b).
“Originator”: Option One or
its successor in interest.
“Overcollateralization Deficiency
Amount”: With respect to any Distribution Date, the excess,
if any, of (a) the Overcollateralization Target Amount applicable
to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date (assuming that 100% of the
Principal Remittance Amount is applied as a payment of principal on
such Distribution Date).
“Overcollateralization
Floor”: With respect to any Distribution Date, 0.50% of
the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date.
“Overcollateralization Increase
Amount”: With respect to any Distribution Date, the lesser of
(a) the Overcollateralization Deficiency Amount as of such
Distribution Date and (b) Net Monthly Excess Cash Flow available
for distribution on that Distribution Date pursuant to Section
4.01(a)(3)(i).
“Overcollateralization Release
Amount”: With respect to any Distribution Date, an amount
equal to the lesser of (a) the Excess Overcollateralized Amount and
(b) the Principal Remittance Amount for such Distribution
Date.
“Overcollateralization Target
Amount”: With respect to any Distribution Date (1) prior
to the Stepdown Date, 3.20% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, (2) on
or after the Stepdown Date provided a Trigger Event is not in
effect, the greater of (x) 6.40% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period and (y) the Overcollateralization Floor,
and (3) on or after the Stepdown Date if a Trigger Event is in
effect, the Overcollateralization Target Amount for the immediately
preceding Distribution Date.
“Overcollateralized Amount”:
As of any Distribution Date, the excess, if any, of (a) the
aggregate Stated Principal Balances of the Mortgage Loans and REO
Properties as of the last day of the related Due Period for such
Distribution Date over (b) the sum of the aggregate Class Principal
Amounts of the Class A, Mezzanine and Class P Certificates as of
such Distribution Date (assuming 100% of the Principal Remittance
Amount is applied as a principal payment on such Distribution
Date). On the Closing Date, the Overcollateralized Amount
will be 3.20% of the Pool Principal Balance as of the Cut-off Date,
which is $48,323,312.
“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.
“P&I Advance”: As to any
Mortgage Loan or REO Property, any advance made by the Servicer in
respect of any Distribution Date representing the aggregate of all
payments of principal and interest, net of the Servicing Fee, that
were due during the related Due Period on the related Mortgage
Loans and that were Delinquent on the related Determination Date,
plus certain amounts representing assumed payments not covered by
any current net income on the Mortgaged Properties acquired by
foreclosure or deed in lieu of foreclosure as determined pursuant
to Section 4.03. The Servicer will not be required to make
any Nonrecoverable P&I Advances as described in Section
4.03.
“Pass-Through Rate”: For any
Distribution Date and any Class of LIBOR Certificates, the least of
(i) the related Formula Rate, (ii) the Net WAC Rate and (iii) the
Maximum Rate Cap for such Distribution Date. For any
Distribution Date and the Class C Certificates, the rate set forth
for the Class C Interest in footnote (2) to “Master
REMIC” under Section 1.03 herein.
“Percentage Interest”: As to
any Certificate, either the percentage set forth on the face
thereof or the percentage obtained by dividing the initial Class
Principal Amount represented by such Certificate by the aggregate
initial Class Principal Amount of all of the Certificates of such
Class.
“Periodic Rate Cap”: With
respect to each Adjustable Rate Mortgage Loan and any Adjustment
Date therefor, the fixed percentage set forth in the related
Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Mortgage Loan may increase or decrease (without
regard to the Maximum Mortgage Rate or the Minimum Mortgage Rate)
on such Adjustment Date from the Mortgage Rate in effect
immediately prior to such Adjustment Date.
“Permitted Investments”: Any
one or more of the following obligations or securities acquired at
a purchase price of not greater than par, regardless of whether
issued by the Depositor, the Servicer, the Securities
Administrator, the Trustee or any of their respective
Affiliates:
(a)
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;
(b)
demand and time deposits in, certificates
of deposit of, or bankers’ acceptances (which shall each have
an original maturity of not more than 90 days and, in the case of
bankers’ acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more than
30 days) denominated in United States dollars that are rated at
least “F1+” by Fitch and “A-1” by S&P
(if rated by S&P), and issued by any Depository
Institution;
(c)
repurchase obligations with respect to
any security described in clause (a) above entered into with a
Depository Institution (acting as principal);
(d)
securities bearing interest or sold at a
discount that are issued by any corporation incorporated under the
laws of the United States of America or any state thereof and that
are rated by each Rating Agency that rates such securities in its
highest long-term unsecured rating at the time of such investment
or contractual commitment providing for such investment;
(e)
commercial paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than
30 days after the date of acquisition thereof) that is rated by
each Rating Agency that rates such securities in its highest
short-term unsecured debt rating available at the time of such
investment;
(f)
units of money market funds, including
money market funds sponsored, managed or advised by the Trustee,
the Securities Administrator or an Affiliate of either of them and
from which the Trustee, the Securities Administrator or the
Affiliate of either of them may receive compensation, that have
been rated “AAA” by Fitch, “Aaa” by
Moody’s (if rated by Moody’s) and “AAA” by
S&P (if rated by S&P); and
(g)
if previously confirmed in writing to the
Trustee and the Securities Administrator, any other demand, money
market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies as a
permitted investment of funds backing securities having ratings
equivalent to its highest initial rating of the Class A
Certificates; provided, however, that any Permitted Investment
pursuant to this clause (g) which solely contains a short-term
rating shall be a Permitted Investment rated in the highest
category for such short-term rating;
provided, however, that no instrument
described hereunder shall evidence either the right to receive (a)
only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from
obligations underlying such instrument and the interest and
principal payments with respect to such instrument provide a yield
to maturity at par greater than 120% of the yield to maturity at
par of the underlying obligations.
“Permitted Transferee”: Any
Transferee of a Residual Certificate other than a Disqualified
Organization or Non-United States Person.
“Person”: Any individual,
corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
“Plan”: Any employee benefit
plan (as defined in Section 3(3) of ERISA) or other plan as defined
in Section 4975(e)(1) of the Code that is subject to Title I of
ERISA or Section 4975 of the Code, or any entity deemed to hold the
plan assets of the foregoing.
“Pool Principal Balance”: As
of any Distribution Date, the aggregate Stated Principal Balance of
the Mortgage Loans.
“PPC”: Either of the Fixed
Rate PPC or the Adjustable Rate PPC.
“Prepayment Assumption”: With
respect to the Adjustable Rate Mortgage Loans, the Fixed Rate PPC.
With respect to the Fixed Rate Mortgage Loans, the Adjustable
Rate PPC. The Prepayment Assumption is used solely for
determining the accrual of original issue discount on the
Certificates for federal income tax purposes.
“Prepayment Interest
Shortfall”: With respect to any Distribution Date, for each
Mortgage Loan that was during the related Prepayment Period (other
than prepayments received in the month of such Distribution Date)
subject to a Principal Prepayment in full or in part, 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 of such Distribution
Date. The obligations of the Servicer in respect of any
Prepayment Interest Shortfall are set forth in Section
3.24.
“Prepayment Period”: With
respect to any Distribution Date is the period that
(a) commences on and includes the day immediately following
the Determination Date falling in the month immediately preceding
the month in which such Distribution Date occurs and (b) ends
on and includes the Determination Date falling in the month in
which such Distribution Date occurs.
“Prepayment Premium”: With
respect to any Mortgage Loan and Prepayment Period, any prepayment
premium, penalty or charge collected by the Servicer from a
Mortgagor in connection with any voluntary Principal Prepayment and
held from time to time as a part of the Trust Fund. The
Servicer shall calculate, in good faith using Accepted Servicing
Practices, the amount of any Prepayment Premium solely pursuant to
the terms of the related Mortgage Note.
“Prepayment Premium
Schedule”: As of the Cut-off Date, a list attached hereto as
Schedule 2 (including the Prepayment Premium Summary attached
thereto) in an electronic format, setting forth the following
information with respect to each Prepayment Premium:
(i)
the Mortgage Loan identifying
number;
(ii)
a code indicating the type of Prepayment
Premium;
(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
Premium;
(vi)
the principal balance of the related
Mortgage Loan as of the Cut-off Date; and
(vii)
such other information as is reasonably
requested by the Securities Administrator.
Upon notice to the Securities
Administrator, the Servicer shall amend the Prepayment Premium
Schedule (i) if the Servicer has waived a Prepayment Premium or
(ii) upon the substitution of any Mortgage Loan. The Servicer
shall furnish a copy of the amended Prepayment Premium Schedule to
the Securities Administrator. With respect to a waived
Prepayment Premium, the Servicer may deliver to the Securities
Administrator an Officer’s Certificate as described in
Section 3.07(b) in lieu of an amended Prepayment Premium
Schedule.
“Prime Rate”: The rate of
interest equal to the prime rate as reported in The Wall Street
Journal .
“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 (without regard to any
Prepayment Premium that may have been collected by the Servicer in
connection with such payment of principal) 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, that portion
of the Available Funds equal to the sum of (i) all scheduled
payments of principal collected or advanced on the Mortgage Loans
by the Servicer that were due during the related Due Period, (ii)
the principal portion of all Principal Prepayments of the Mortgage
Loans, if any, applied by the Servicer during the related
Prepayment Period, (iii) the principal portion of all related Net
Liquidation Proceeds, Insurance Proceeds and Recoveries received
during the calendar month preceding the month of such Distribution
Date, (iv) that portion of the Purchase Price representing
principal of any purchased or repurchased Mortgage Loan, deposited
to the Collection Account during the calendar month preceding the
month of such Distribution Date, (v) the principal portion of the
amount of any shortfall deposited in the Collection Account in
connection with the substitution of a Deleted Mortgage Loan
pursuant to Section 2.03 during the calendar month preceding the
month of such Distribution Date and (vi) on the Distribution Date
on which the Trust is to be terminated in accordance with this
Agreement, that portion of the Termination Price in respect of
principal.
“PTCE”: A Prohibited
Transaction Class Exemption.
“Purchase Price”: With
respect to any Mortgage Loan or REO Property to be purchased
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
Section 9.01, and as calculated and confirmed in an Officers’
Certificate from the Servicer to the Securities Administrator, an
amount equal to the sum of (i) 100% of the Stated Principal Balance
thereof as of the date of purchase (or such other price as provided
in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable
Mortgage Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or an
advance by the Servicer through the end of the calendar month in
which the purchase is to be effected and (y) an REO Property, the
sum of (1) accrued interest on such Stated Principal Balance at the
applicable Mortgage Rate in effect from time to time from the Due
Date as to which interest was last covered by a payment by the
Mortgagor or an advance by the 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 P&I Advances that as of the date of
purchase had been distributed as or to cover REO Imputed Interest
pursuant to Section 4.01, (iii) except in the case of a purchase by
the Servicer, any unreimbursed Servicing Advances and P&I
Advances and any unpaid Servicing Fees allocable to such Mortgage
Loan or REO Property and any P&I Advances previously reimbursed
to the Servicer pursuant to Section 3.11(a)(vi), (iv) except in the
case of a purchase by the Servicer, any amounts previously
withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Section 3.11(a)(ix) and Section
3.16(b), (v) in the case of a Mortgage Loan required to be
purchased pursuant to Section 2.03, expenses reasonably incurred or
to be incurred by the Servicer, the Trustee, the Custodian, the
Trust Oversight Manager or the Securities Administrator in respect
of the breach or defect giving rise to the purchase obligation and
(vi) in the case of a Mortgage Loan required to be purchased
pursuant to Section 2.03, any costs and damages actually incurred
and paid by or on behalf of the Trust in connection with any
violation by such Mortgage Loan of (i) the representation and
warranties set forth in Section 2.05(b)(i), (ii) or (iii) of this
Agreement, (ii) Section 2(vi) of Schedule B to the Reconstitution
Agreement or (iii) the representations and warranties made in
connection with “high-cost” home loans or any predatory
or abusive lending laws in Schedule B to the Reconstitution
Agreement, as applicable.
“Qualified Substitute Mortgage
Loan”: A Mortgage Loan substituted for a Deleted Mortgage
Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding 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 Stated Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a
Mortgage Rate not less than (and not more than one percentage point
in excess of) the Mortgage Rate of the Deleted Mortgage Loan, (iii)
with respect to each Adjustable Rate Mortgage Loan have a Maximum
Mortgage Rate not less than the Maximum Mortgage Rate on the
Deleted Mortgage Loan, (iv) with respect to each Adjustable Rate
Mortgage Loan have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) with
respect to each Adjustable Rate Mortgage Loan have a Gross Margin
equal to or greater than the Gross Margin of the Deleted Mortgage
Loan, (vi) with respect to each Adjustable Rate Mortgage Loan,
adjust in accordance with the Index and have a next Adjustment Date
not more than two months later than the next Adjustment Date on the
Deleted Mortgage Loan, and have the same intervals between
Adjustment Dates 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) have the
same Due Date as the Due Date on the Deleted Mortgage Loan, (ix)
have a Loan-to-Value Ratio as of the date of substitution equal to
or lower than the Loan-to-Value Ratio of the Deleted Mortgage Loan
as of such date, (x) have a risk grading certified by the Seller 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 Mortgage Loans being replaced, (xii) be of the
same or better credit quality as the Mortgage Loan being replaced,
(xiii) have a lien priority equal to or superior to that of the
Deleted Mortgage Loan, (xiv) be secured by the same property type
as the Deleted Mortgage Loan and (xv) conform to each
representation and warranty in the applicable Mortgage Loan
Purchase Agreement. In the event that one or more Mortgage
Loans are substituted for one or more Deleted Mortgage Loans, the
amounts described in clause (i) hereof shall be determined on the
basis of aggregate principal balances, the Mortgage Rates described
in clause (ii) hereof shall be determined on the basis of weighted
average Mortgage Rates, the Loan-to-Value Ratios described in
clause (ix) hereof shall be satisfied as to each such Mortgage
Loan, the risk gradings described in clause (x) hereof shall be
satisfied as to each such Mortgage Loan and, except to the extent
otherwise provided in this sentence, the representations and
warranties described in clause (xv) hereof must be satisfied as to
each Qualified Substitute Mortgage Loan or in the aggregate, as the
case may be.
“Rating Agency or Rating
Agencies”: S&P, Moody’s and Fitch or their
successors. If such agencies or their successors are no
longer in existence, “Rating Agencies” shall be such
nationally recognized statistical rating agencies, or other
comparable Persons, designated by the Depositor, notice of which
designation shall be given to the Trustee, the Securities
Administrator and the Servicer.
“Realized Loss”: With respect
to each Mortgage Loan as to which a Final Recovery Determination
has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery
Determination was made, plus (ii) accrued interest from the Due
Date as to which interest was last paid by the Mortgagor through
the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar
month during such period (A) at an annual rate equal to the annual
rate at which interest was then accruing on such Mortgage Loan and
(B) on a principal amount equal to the Stated Principal Balance of
such Mortgage Loan as of the close of business on the Distribution
Date during such calendar month, plus (iii) any amounts previously
withdrawn from the Collection Account in respect of such Mortgage
Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus
(iv) the proceeds, if any, received in respect of such Mortgage
Loan during the calendar month in which such Final Recovery
Determination was made, net of amounts that are payable therefrom
to the Servicer with respect to such Mortgage Loan pursuant to
Section 3.11(a)(iii).
With respect to any REO Property as to
which a Final Recovery Determination has been made, an amount (not
less than zero) equal to (i) the unpaid principal balance of the
related Mortgage Loan as of the date of acquisition of such REO
Property on behalf of the Trust Fund, plus (ii) accrued interest
from the Due Date as to which interest was last paid by the
Mortgagor in respect of the related Mortgage Loan through the end
of the calendar month immediately preceding the calendar month in
which such REO Property was acquired, calculated in the case of
each calendar month during such period (A) at an annual rate equal
to the annual rate at which interest was then accruing on the
related Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of the related Mortgage Loan as of the
close of business on the Distribution Date during such calendar
month, plus (iii) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which
such REO Property was acquired and ending with the calendar month
in which such Final Recovery Determination was made, plus (iv) any
amounts previously withdrawn from the Collection Account in respect
of the related Mortgage Loan pursuant to Section 3.11(a)(ix) and
Section 3.16(b), minus (v) the aggregate of all P&I Advances
made by the Servicer in respect of such REO Property or the related
Mortgage Loan for which the Servicer has been or, in connection
with such Final Recovery Determination, will be reimbursed pursuant
to Section 3.23 out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property,
minus (vi) the total of all net rental income, Insurance Proceeds
and Liquidation Proceeds received in respect of such REO Property
that has been, or in connection with such Final Recovery
Determination, will be transferred to the Distribution Account
pursuant to Section 3.23.
With respect to each Mortgage Loan that
has become the subject of a Deficient Valuation, the difference
between the principal balance of such Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal
balance of such Mortgage Loan as reduced by the Deficient
Valuation.
With respect to each Mortgage Loan that
has become the subject of a Debt Service Reduction, the portion, if
any, of the reduction in each affected Monthly Payment attributable
to a reduction in the Mortgage Rate imposed by a court of competent
jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly
Payment.
“Realized Loss Percentage”:
For purposes of the Servicer Termination Test, the percentage
produced by the following calculation: (i) the aggregate amount of
cumulative Realized Losses incurred on the Mortgage Loans since the
Cut-off Date through the last day of the related Due Period, minus
(ii) any amount received with respect to Realized Losses on the
Mortgage Loans subsequent to a Final Recovery Determination being
made with respect to the Mortgage Loans, divided by (iii) the
aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date; provided however , that for purposes of this
definition, the term “Realized Losses” shall not
include Debt Service Reductions or Deficient Valuations.
“Reconstitution Agreement”:
That certain reconstitution agreement dated as of the Closing Date
by and among the Seller, the Depositor and Option One and related
to the Mortgage Loan Purchase Agreement by and among the Seller,
Option One and certain of its affiliates that are
trusts.
“Record Date”: With respect
to any Distribution Date and any Definitive Certificates, other
than the Class C Certificates, and the first Distribution Date, the
close of business on the last Business Day of the month immediately
preceding the month in which such applicable Distribution Date
occurs. With respect to any Distribution Date and the Offered
Certificates (other than any Definitive Certificates), the Business
Day prior to such Distribution Date.
“Recovery”: With respect to
any Liquidated Mortgage Loan, an amount received in respect of
principal on such Mortgage Loan which has previously been allocated
as a Realized Loss to a Class or Classes of Certificates net of
reimbursable expenses.
“Reference Banks”: Deutsche
Bank, Barclays Bank PLC, The Tokyo Mitsubishi Bank and National
Westminster Bank PLC and their successors in interest; provided,
however, that if any of the foregoing banks are not able to serve
as a Reference Bank, then any leading banks selected by the
Depositor which are engaged in transactions in Eurodollar deposits
in the international Eurocurrency market (i) with an established
place of business in London, (ii) not controlling, under the
control of or under common control with the Depositor or any
Affiliate thereof, and (iii) which have been designated as such by
the Depositor.
“Refinanced Mortgage Loan”: A
Mortgage Loan the proceeds of which were not used to purchase the
related Mortgaged Property.
“Regular Certificate”: As
specified in the Preliminary Statement.
“Regular Interest”: A
“regular interest” in a REMIC within the meaning of
Section 860G(a)(1) of the Code.
“Relief Act”: The
Servicemembers Civil Relief Act, as amended, or any similar state
or local law.
“Relief Act Interest
Shortfall”: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest collectible
on such Mortgage Loan for the most recently ended calendar month as
a result of the application of the Relief Act.
“REMIC”: A “real estate
mortgage investment conduit” within the meaning of Section
860D of the Code.
“REMIC I”: The segregated
pool of assets subject hereto, constituting the primary trust
created hereby and to be administered hereunder, with respect to
which a REMIC election is to be made, consisting of (i) such
Mortgage Loans 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 each of the Mortgage Loan
Purchase Agreement and the Reconstitution Agreement (including any
security interest created thereby) and (v) the Collection Account
(other than any amounts representing any Servicer Prepayment
Premium Payment Amount), the Distribution Account (other than any
amounts representing any Servicer Prepayment Premium Payment
Amount) and any REO Account and such assets that are deposited
therein from time to time and any investments thereof, together
with any and all income, proceeds and payments with respect
thereto. Notwithstanding the foregoing, however, REMIC I
specifically excludes all payments and other collections of
principal and interest due on the Mortgage Loans on or before the
Cut-off Date and all Prepayment Premiums payable in connection with
Principal Prepayments made on or before the Cut-off Date, the Net
WAC Reserve Fund, the Supplemental Interest Trust, the Swap Account
and the Swap Agreement.
“REMIC I Regular
Interest”: Any of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a
“regular interest” in REMIC I.
“REMIC II”: The segregated
pool of assets consisting of all of the REMIC I Regular Interests
conveyed in trust to the Trustee for the benefit of the
Certificateholders pursuant to Section 2.07 and all amounts
deposited therein, with respect to which a separate REMIC election
is to be made.
“REMIC II Regular Interest”:
Any of the separate non-certificated beneficial ownership interests
in REMIC II issued hereunder and designated as a “regular
interest” in REMIC II.
“REMIC III”: The segregated
pool of assets consisting of all of the REMIC II Regular Interests
conveyed in trust to the Trustee for the benefit of the
Certificateholders pursuant to Section 2.07 and all amounts
deposited therein, with respect to which a separate REMIC election
is to be made.
“REMIC Provisions”:
Provisions of the federal income tax law relating to real estate
mortgage investment conduits, which appear at Section 860A through
860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
“REMIC Swap Rate”: For
each Distribution Date (and the related Interest Accrual Period), a
per annum rate equal to the product of: (i) 4.86% (ii) 2, and (iii)
the quotient of (a) the actual number of days in the related
Interest Accrual Period divided by (b) 30.
“Remittance Report”: A report
in form mutually agreed to between the Securities Administrator and
the Servicer on a magnetic disk or tape or in electronic format
prepared by the Servicer pursuant to Section 4.03 with such
additions, deletions and modifications as agreed to by the
Securities Administrator and the Servicer.
“Rents from Real Property”:
With respect to any REO Property, gross income of the character
described in Section 856(d) of the Code as being included in the
term “rents from real property.”
“REO Account”: Each of the
accounts maintained, or caused to be maintained, by the Servicer in
respect of an REO Property pursuant to Section 3.23.
“REO Disposition”: The sale
or other disposition of an REO Property on behalf of 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 Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such
calendar month, of the related Mortgage Loan, if appropriate) as of
the close of business on the Distribution Date in such calendar
month.
“REO Principal Amortization”:
With respect to any REO Property, for any calendar month, the
excess, if any, of (a) the aggregate of all amounts received in
respect of such REO Property during such calendar month, whether in
the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in
connection with a purchase of all of the Mortgage Loans and REO
Properties pursuant to Section 9.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i)
payable pursuant to Section 3.23(c) in respect of the proper
operation, management and maintenance of such REO Property or (ii)
payable or reimbursable to the Servicer pursuant to Section 3.23(d)
for unpaid Servicing Fees in respect of the related Mortgage Loan
and unreimbursed Servicing Advances and P&I Advances in respect
of such REO Property or the related Mortgage Loan, over (b) the REO
Imputed Interest in respect of such REO Property for such calendar
month.
“REO Property”: A Mortgaged
Property acquired by the Servicer on behalf of 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, or in a mutually agreeable
electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer, in the form of Exhibit E-1
attached hereto.
“Required Net WAC Reserve Fund
Deposit”: With respect to any Distribution Date, the excess,
if any, of (i) $1,000 over (ii) the amount of funds on deposit in
the Net WAC Reserve Fund prior to deposits thereto on such
Distribution Date. The Depositor shall cause the deposit of
$1,000 to the Net WAC Reserve Fund on the Closing Date.
“Reserve Interest Rate”: With
respect to any Interest Determination Date, the rate per annum that
the Securities Administrator determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/16%) of the one-month U.S. dollar lending rates which
New York City banks selected by the Depositor are quoting on the
relevant Interest Determination Date to the principal London
offices of leading banks in the London interbank market or (ii) in
the event that the Securities Administrator can determine no such
arithmetic mean, the lowest one-month U.S. dollar lending rate
which New York City banks selected by the Depositor are quoting on
such Interest Determination Date to leading European
banks.
“Residential Dwelling”: Any
one of the following: (i) an attached or detached one-family
dwelling, (ii) an attached or detached two- to four-family
dwelling, (iii) an attached or detached one-family dwelling unit in
a condominium project or (iv) an attached or detached one-family
dwelling in a planned unit development, none of which is a
cooperative or mobile home.
“Residual Certificates”: As
specified in the Preliminary Statement.
“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 Securities Administrator, any vice
president, any assistant vice president, the Secretary, any
assistant secretary, the Treasurer, any assistant treasurer, any
trust officer or assistant trust officer, the Controller and any
assistant controller or any other officer of the Securities
Administrator 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. When used with respect to the Trustee,
any vice president, any assistant vice president, any trust officer
or any assistant trust officer charged with direct responsibility
for the administration of this Agreement.
“S&P”: Standard and
Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or its successor in interest.
“Securities Administrator
Fee”: As to any Distribution Date and each Mortgage
Loan, an amount equal to the product of the Securities
Administrator Fee Rate and the outstanding Stated Principal Balance
of such Mortgage Loan as of the first day of the related Due
Period, provided, however, such amount shall not be less than
$500.00 per month.
“Securities Administrator Fee
Rate”: 0.003% per annum, and as adjusted to reflect the
minimum monthly payment of $500.
“Seller”: J.P. Morgan
Mortgage Acquisition Corp. or its successor in interest, in its
capacity as seller.
“Senior Enhancement
Percentage”: For any Distribution Date, the percentage
obtained by dividing (x) the sum of (i) the aggregate Class
Principal Amount of the Mezzanine Certificates (after giving effect to the distribution of the
Group 1 Principal Distribution Amount and the Group 2 Principal
Distribution Amount on such Distribution Date) and (ii) the
Overcollateralized Amount (after giving effect to the distribution
of the Principal Distribution Amount on such Distribution Date) by
(y) the Pool Principal Balance as of the last day of the related
Due Period.
“Sequential Trigger Event”:
For any Distribution Date, is in effect if (a) there are no
Mezzanine Certificates outstanding, (b) with respect to any
Distribution Date on or prior to the Distribution Date in January
2009, the aggregate amount of realized losses incurred since the
Cut-Off Date through the last day of the related Due Period
(reduced by the aggregate amount of subsequent recoveries recovered
since the Cut-Off Date through the last day of the related Due
Period) divided by the aggregate principal balance of the Mortgage
Loans on the Cut-Off Date exceeds 1.75% or (c) with respect to any
Distribution Date on or after the Distribution Date in January
2009, a Trigger Event is in effect
“Servicer”: Option One, or
any successor servicer appointed as herein provided, in its
capacity as servicer hereunder.
“Servicer Certification”: As
defined in Section 4.06(d) herein, a form of which is attached
hereto as Exhibit J.
“Servicer Event of Default”:
One or more of the events described in Section 7.01(a).
“Servicer Prepayment Premium
Payment Amount”: The amounts payable by the Servicer in
respect of any waived Prepayment Premiums pursuant to Section
2.03(b)(ii).
“Servicer Remittance Date”:
With respect to any Distribution Date, 10:00 a.m. New York time on
the Business Day preceding such Distribution Date.
“Servicer Termination Test”:
With respect to any Distribution Date, the Servicer will fail the
Servicer Termination Test if the Realized Loss Percentage for the
Mortgage Loans exceeds the applicable percentages set forth below
with respect to such Distribution Date:
|
Distribution Date Occurring In
|
Percentage
|
|
January 2006 through December 2007
|
2.75%
|
|
January 2008 through December 2008
|
3.25%
|
|
January 2009 through December 2009
|
3.75%
|
|
January 2010 and thereafter
|
4.50%
|
“Servicing Account”: The
account or accounts created and maintained pursuant to Section
3.09.
“Servicing Advances”: The
reasonable “out-of-pocket” costs and expenses incurred
by the Servicer in the performance of its servicing obligations
(including the reasonable fees of counsel) in connection with a
default, delinquency or other unanticipated event, including, but
not limited to, the cost of (i) the inspection, preservation,
restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, in
respect of a particular Mortgage Loan, (iii) the reasonable fees in
connection with the management and liquidation of any REO Property
(including default management and similar services, appraisal
services and real estate broker services), (iv) the performance of
its obligations under Section 3.01, Section 3.09, Section 3.13,
Section 3.14, Section 3.16 and Section 3.23, and (v) locating
documents missing from the Mortgage File or Servicing File.
Servicing Advances also include any reasonable
“out-of-pocket” cost and expenses (including legal
fees) incurred by the Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or
Assignments of Mortgage to the extent not recovered from the
Mortgagor or otherwise payable under this Agreement. The
Servicer shall not be required to make any Nonrecoverable Servicing
Advances.
“Servicing Fee”: With respect
to each Mortgage Loan and for any calendar month, an amount equal
to one month’s interest at the Servicing Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues
for such calendar month, subject to reduction as provided in
Section 3.24. A portion of such Servicing Fee may be retained
by any Sub-Servicer as its servicing compensation.
“Servicing Fee Rate”: 0.30%
per annum for the first 10 Due Periods, 0.40% per annum for the
11th through 30th Due Periods and 0.65% per annum for all Due
Periods thereafter, in each case, on the Stated Principal Balance
of each Mortgage Loan.
“Servicing File”: With
respect to each Mortgage Loan, the Servicing File for such Mortgage
Loan shall consist of copies of each item required to be in the
Mortgage File (for the avoidance of doubt, the original of each
such document shall be maintained in the Mortgage File for such
Mortgage Loan unless otherwise permitted to be released in
accordance with this Agreement) and the following documents listed
below.
(i)
Residential loan application.
(ii)
Mortgage Loan closing
statement.
(iii)
Verification of employment and income, if
applicable.
(iv)
Verification of acceptable evidence of
source and amount of downpayment.
(v)
Credit report on Mortgagor.
(vi)
Residential appraisal report.
(vii)
Photograph of the Mortgaged
Property.
(viii)
Survey of the Mortgaged
Property.
(ix)
Copy of each instrument necessary to
complete identification of any exception set forth in the exception
schedule in the title policy, i.e., map or plat, restrictions,
easements, sewer agreements, home association declarations,
etc.
(x)
All required disclosure
statements.
(xi)
If required in an appraisal, termite
report, structural engineer’s report, water potability and
septic certification.
(xii)
Sales Contract, if applicable.
“Servicing Officer”: Any
employee of the Servicer involved in, or responsible for, the
administration and servicing of the Mortgage Loans, whose name and
specimen signature appear on a list of Servicing Officers furnished
by the Servicer to the Trustee, the Securities Administrator and
the Depositor on the Closing Date, as such list may from time to
time be amended.
“Single Certificate”: With
respect to any Class of Certificates (other than the Class P
Certificates and the Residual Certificates), a hypothetical
Certificate of such Class evidencing a Percentage Interest for such
Class corresponding to an initial Class Principal Amount of $1,000.
With respect to the Class P Certificates and the Residual
Certificates, a hypothetical Certificate of such Class evidencing a
20% Percentage Interest in such Class.
“Special Servicer”: As
defined in Section 3.16(e) herein.
“Startup Day”: With respect
to each REMIC formed hereby, the day designated as such pursuant to
Section 10.01(b) hereof.
“Stated Principal Balance”:
With respect to any Mortgage Loan: (a) as to any date of
determination, the principal balance of such Mortgage Loan as of
the Cut-off Date, as shown in the Mortgage Loan Schedule, minus all
amounts previously distributed pursuant to Section 4.01
representing payments or recoveries of principal, or advances in
lieu thereof.
“Stepdown Date”: The earlier
to occur of (1) the Distribution Date on which the aggregate Class
Principal Amount of the Class A Certificates has been reduced to
zero and (2) the later to occur of (x) the Distribution Date
occurring in January 2009 and (y) the first Distribution Date on
which the Senior Enhancement Percentage is greater than or equal to
43.80% (for the purpose of this definition only, Senior Enhancement
Percentage shall be calculated prior to the distribution of
Principal Distribution Amounts on the Mezzanine
Certificates).
“Subordinate Certificates”:
As defined in the Preliminary Statement.
“Sub-Servicer”: Any Person
with which the Servicer has entered into a Sub-Servicing Agreement
and which meets the qualifications of a Sub-Servicer pursuant to
Section 3.02.
“Sub-Servicing Account”: An
Eligible Account established by a Sub-Servicer which meets the
requirements set forth in Section 3.08 and is otherwise acceptable
to the Servicer.
“Sub-Servicing Agreement”:
The written contract between the Servicer and a Sub-Servicer
relating to servicing and administration of certain Mortgage Loans
as provided in Section 3.02.
“Substitution Shortfall
Amount”: As defined in Section 2.03(c) herein.
“Supplemental Interest
Account”: As defined in Section 4.07 hereof.
“Supplemental Interest
Trust”: The trust created pursuant to Section 4.07
herein and designated as the “Supplemental Interest
Trust,” consisting of the Swap Agreement, the Supplemental
Interest Account and the right to receive amounts as provided in
Section 4.01.
“Swap Account”: A segregated
trust account established and maintained by the Securities
Administrator pursuant to Section 4.07 of this Agreement in which
payments owed to or received from, the Swap Provider will be
deposited.
“Swap Agreement”: The 1992
ISDA Master Agreement (Multicurrency-Cross Border) dated as of
December 21, 2005 (together with the schedule thereto, the Master
Agreement) between the Swap Provider and the Securities
Administrator on behalf of the Supplemental Interest Trust, an ISDA
Credit Support Annex (Bilateral Form-New York Law) as of the same
date, which supplements, forms part of, and is subject to the
Master Agreement, and a confirmation of the same date, which
supplements and forms part of the Master Agreement.
“Swap Default”: An Event of
Default under the Interest Rate Swap Agreement.
“Swap Early Termination”: The
occurrence of an Early Termination Date under the Swap
Agreement.
“Swap LIBOR”: A per annum
rate equal to the floating rate payable by the Swap Provider under
the Swap Agreement.
Swap Provider: JPMorgan Chase Bank,
National Association.
“Swap Provider Trigger
Event”: A Swap Termination Payment that is triggered upon:
(i) an Event of Default under the Swap Agreement with respect to
which the Swap Provider is a Defaulting Party (as defined in the
Swap Agreement), (ii) a Termination Event under the Swap Agreement
with respect to which the Swap Provider is the sole Affected Party
(as defined in the Swap Agreement) or (iii) an Additional
Termination Event under the Swap Agreement with respect to which
the Swap Provider is the sole Affected Party.
“Swap Termination Payment”:
The amount, if any, owed by the Supplemental Interest Trust or the
Swap Provider upon a Swap Early Termination.
“Tax Returns”: Each federal
income tax return on Internal Revenue Service Form 1066, U.S. Real
Estate Mortgage Investment Conduit Income Tax Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holders
of REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the Trust Fund due to its
classification as multiple REMICs under the REMIC Provisions,
together with any and all other information reports or returns that
may be required to be furnished to the Certificateholders or filed
with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or
local tax laws.
“Telerate Page 3750”: The
display designated as page “3750” on the Moneyline
Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London
interbank offered rates of major banks).
“Termination Event”: Under
the Swap Agreement, the following standard events under the ISDA
Master Agreement:
·
“Illegality” (which generally
relates to changes in law causing it to become unlawful for either
party to perform its obligations under the Swap
Agreement),
·
“Tax Event” (which generally
relates to either party to the Swap Agreement receiving a payment
under the Swap Agreement from which an amount has been deducted or
withheld for or on account of taxes) and
·
“Tax Event Upon Merger”
(solely with respect to the Swap Provider as merging party) (which
generally relates to the Swap Provider’s receiving a payment
under the Swap Agreement from which an amount has been deducted or
withheld for or on account of taxes resulting from a
merger),
as described in Sections 5(b)(i),
5(b)(ii) and 5(b)(iii) of the ISDA Master Agreement. In
addition, there are “Additional Termination Events” (as
defined in the Swap Agreement) including if the Supplemental
Interest Trust or the Trust should terminate, if this Agreement or
other transaction documents are amended or modified without the
prior written consent of the Swap Provider where written consent is
required or if, pursuant to the terms of Section 10.01(a) of this
Agreement, the Servicer at the direction of the majority holder of
the Class C Certificates or the NIMS Insurer, if any, exercises its
option to purchase the Mortgage Loans. With respect to the
Swap Provider, an Additional Termination Event will occur if the
Swap Provider fails to comply with the Downgrade
Provisions.
“Termination Price”: As
defined in Section 9.01 herein.
“Transfer”: Any direct or
indirect transfer, sale, pledge, hypothecation, or other form of
assignment of any Ownership Interest in a Certificate.
“Transferee”: Any Person who
is acquiring by Transfer any Ownership Interest in a
Certificate.
“Transferor”: Any Person who
is disposing by Transfer of any Ownership Interest in a
Certificate.
“Trigger Event”: A Trigger
Event has occurred with respect to any Distribution Date on or
after the Stepdown Date if (i) the Delinquency Percentage exceeds
33.50% of the Senior Enhancement Percentage for such Distribution
Date or (ii) the cumulative Realized Losses (after reduction for
all Subsequent Recoveries received through the end of the related
Due Period) as a percentage of the original aggregate Stated
Principal Balance of the Mortgage Loans as of the Closing Date is
greater than the percentage set forth in the following
table:
|
Range of Distribution Date s
|
Percentage
|
|
January 2008 – December 2008
|
1.75%
|
|
January 2009 – December 2009
|
3.25%
|
|
January 2010 – December 2010
|
5.25%
|
|
January 2011 – December 2011
|
6.75%
|
|
January 2012 and thereafter
|
7.50%
|
The percentages set forth in the table
above are the percentages applicable for the first Distribution
Date in the corresponding range of Distribution Dates. The
percentage for each succeeding Distribution Date in a range
increases incrementally by 1/12 of the positive difference between
the percentage applicable to the first Distribution Date in that
range and the percentage applicable to the first Distribution Date
in the succeeding range.
“Trust”: J.P. Morgan Mortgage
Acquisition Corp. 2005-OPT2, the trust created under this
Agreement.
“Trust Fund”: The corpus of
the trust created hereunder consisting of (i) the Mortgage Loans
and all interest and principal received on or with respect thereto
after the related Cut-off Date, other than such amounts which were
due on the Mortgage Loans on or before the related Cut-off Date,
(ii) the Collection Account, the Distribution Account and the Net
WAC Reserve Fund and all amounts deposited therein pursuant to the
applicable provisions of this Agreement (including, without
limitation, amounts received from the Seller on the Closing Date
which shall be deposited by the Securities Administrator in the
Distribution Account pursuant to Section 2.01), (iii) the
Depositor’s rights under each Mortgage Loan Purchase
Agreement, the Assignment and Assumption Agreement and the
Reconstitution Agreement, (iv) the Trust’s rights under the
Swap Agreement, (v) property that secured a Mortgage Loan and has
been acquired by foreclosure, deed-in-lieu of foreclosure or
otherwise and (vi) all present and future claims, demands, causes
and choses in action in respect of the foregoing, (vii) all other
property of the Trust from time to time, and (viii) all additions
to, distributions on and proceeds of the foregoing of every kind
and nature whatsoever, including all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing.
“Trustee”: U.S. Bank National
Association, a national banking association, not in its individual
capacity, but solely in its capacity as Trustee for the benefit of
the Certificateholders under this Agreement, or its successor in
interest, or any successor trustee appointed as herein
provided.
“Trustee Certification”: As
defined in Section 4.06(d) herein.
“Trust Oversight Management
Agreement”: The trust oversight management agreement
dated December 21, 2005 among the Servicer, the Depositor, the
Securities Administrator and the Trust Oversight
Manager.
“Trust Oversight Manager”:
Pentalpha Surveillance LLC, A Delaware limited liability
company, and its successors and assigns.
“Trust Oversight Manager
Certification”: As defined in Section 8.20.
“Trust Oversight Manager
Fee”: With respect to any Distribution Date and each
Mortgage Loan, an amount equal to the product of (a) one twelfth,
(b) the Trust Oversight Manager Fee Rate and (c) the Stated
Principal Balance of such Mortgage Loan as of the first day of the
related Due Period, subject to an annual minimum of
$15,000.
“Trust Oversight Manager Fee
Rate”: 0.015% per annum.
“Uncertificated Interest”:
The R-I Interest.
“Underwriter”: J.P. Morgan
Securities Inc.
“Underwriter’s
Exemption”: Prohibited Transaction Exemption 2002-19, or any
substantially similar administrative exemption granted by the U.S.
Department of Labor.
“Uninsured Cause”: Any cause
of damage to a Mortgaged Property such that the complete
restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to
Section 3.14.
“United States Person”: A
“United States person” within the meaning set forth in
Section 7701(a)(30) of the Code.
“Unpaid Interest Shortfall
Amount”: For (i) the first Distribution Date and with respect
to the Senior Certificates and the Mezzanine Certificates, zero,
and for such Class of Certificates and 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
of Certificates for the immediately preceding Distribution Date and
(2) the outstanding Unpaid Interest Shortfall Amount, if any, for
such Class of Certificates for such preceding Distribution Date
exceeds (b) the aggregate amount distributed on such Class of
Certificates in respect of interest on such preceding Distribution
Date, plus interest on the amount of interest due but not paid on
the Class of Certificates on such preceding Distribution Date, to
the extent permitted by law, at the Pass-Through Rate on such
Distribution Date for such Class of Certificates for the related
Accrual Period.
“Value”: With respect to any
Mortgaged Property related to a Mortgage Loan, the lesser of (i)
the lesser of (a) the value thereof as determined by an appraisal
made for the originator of the Mortgage Loan at the time of
origination of the Mortgage Loan by an appraiser who met the
minimum requirements of Fannie Mae and Freddie Mac and (b) the
value thereof as determined by a review appraisal conducted by the
Originator in the event any such review appraisal determines an
appraised value more than ten percent (10%) lower than the value
thereof as determined by the appraisal referred to in clause (i)(a)
above in the case of a Mortgage Loan with an LTV less than or equal
to eighty-five percent (85%), or more than five percent (5%) lower
than the value thereof as determined by the appraisal referred to
in clause (i)(a) above, in the case of a Mortgage Loan with an LTV
greater than eighty-five percent (85%) up to and including an LTV
equal to ninety-five percent (95%), or more than three percent (3%)
lower than the value thereof as determined by the appraisal
referred to in clause (i)(a) above, in the case of a Mortgage Loan
with an LTV greater than ninety-five percent (95%), as determined
by an appraisal referred to in clause (i)(a), and (ii) the purchase
price paid for the related Mortgaged Property by the Mortgagor with
the proceeds of the Mortgage Loan, provided, however, (A) in the
case of a Refinanced Mortgage Loan, such value of the Mortgaged
Property is based solely upon the value thereof as determined by
the appraisal referred to in clause (i) above, and (B) in the case
of a Mortgage Loan originated in connection with a
“lease-option purchase”, such value of the Mortgaged
Property is based on the lower of the value determined by an
appraisal made for the originator of such Mortgage Loan at the time
or origination or the sale price of such Mortgaged Property if the
“lease option purchase price” was set less than 12
months prior to origination, and is based on the value determined
by an appraisal made for the originator of such Mortgage Loan at
the time of origination if the “lease option purchase
price” was set 12 months or more prior to
origination.
“Voting Rights”: The portion
of the voting rights of all of the Certificates that is allocated
to any Certificate. With respect to any date of
determination, 97% of all voting rights will be allocated among all
Holders of the Offered Certificates in proportion to their then
outstanding Class Principal Amounts, 1% of all voting rights will
be allocated among the Holders of the Class C Certificates; 1% of
all voting rights will be allocated among the Holders of the Class
P Certificates, and 1% of all voting rights will be allocated among
Holders of the Residual Certificates other than the Uncertificated
Interest. Voting Rights allocated to a Class shall be
allocated among the Certificates of such Class in proportion to the
outstanding Percentage Interests evidenced by their respective
Certificates.
SECTION 1.02.
Allocation of Certain Interest
Shortfalls.
For purposes of calculating the amount of
the Monthly Interest Distributable Amount for the Senior and
Mezzanine Certificates for any Distribution Date, the aggregate
amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Servicer pursuant to Section 3.24) and
any Relief Act Interest Shortfall incurred in respect of the
Mortgage Loans for any Distribution Date shall be allocated to the
Class C Certificates in reduction of the Class C Distribution
Amount and thereafter, among the Class A Certificates and the other
Classes of Mezzanine Certificates on a pro rata basis based on such
Monthly Interest Distributable Amount prior to giving effect to any
such reduction.
SECTION 1.03.
Designation of Interests in REMIC.
The Securities Administrator shall elect
that each of REMIC I, REMIC II, and REMIC III be treated as a REMIC
under Section 860D of the Code. Any inconsistencies or
ambiguities in this Agreement or in the administration of this
Agreement shall be resolved in a manner that preserves the validity
of such REMIC elections. The assets of REMIC I shall include
the Mortgage Loans, the accounts (other than the Net WAC Reserve
Fund and the Swap Account), any REO Property, and any proceeds of
the foregoing. The Supplemental Interest Trust and any assets
thereof shall not be an asset of any REMIC formed hereby. The
REMIC I Regular Interests shall constitute the assets of REMIC II.
The REMIC II Regular Interests shall constitute the
assets of REMIC III (the “Master REMIC”). The
Class R Certificate represents ownership of the sole class of
residual interest in each of the REMIC II and the Master
REMIC.
REMIC I:
The following table sets forth the
designations, principal balances, and interest rates for each
interest in REMIC I, each of which (other than the R-I interest) is
hereby designated as a regular interest in REMIC I (the
“REMIC I Regular Interests”):
|
Class Designation
|
Initial Principal Balance
|
Interest Rate
|
|
T1-A
|
$ 62,447,506.18
|
(1)
|
|
T1-F1
|
$ 5,622,589.50
|
(2)
|
|
T1-V1
|
$ 5,622,589.50
|
(3)
|
|
T1-F2
|
$ 6,534,617.50
|
(2)
|
|
T1-V2
|
$ 6,534,617.50
|
(3)
|
|
T1-F3
|
$ 7,431,478.00
|
(2)
|
|
T1-V3
|
$ 7,431,478.00
|
(3)
|
|
T1-F4
|
$ 8,308,131.50
|
(2)
|
|
T1-V4
|
$ 8,308,131.50
|
(3)
|
|
T1-F5
|
$ 8,246,271.00
|
(2)
|
|
T1-V5
|
$ 8,246,271.00
|
(3)
|
|
T1-F6
|
$ 912,864.00
|
(2)
|
|
T1-V6
|
$ 912,864.00
|
(3)
|
|
T1-F7
|
$ 11,285,927.00
|
(2)
|
|
T1-V7
|
$ 11,285,927.00
|
(3)
|
|
T1-F8
|
$ 11,464,524.50
|
(2)
|
|
T1-V8
|
$ 11,464,524.50
|
(3)
|
|
T1-F9
|
$ 12,155,207.50
|
(2)
|
|
T1-V9
|
$ 12,155,207.50
|
(3)
|
|
T1-F10
|
$ 12,511,001.00
|
(2)
|
|
T1-V10
|
$ 12,511,001.00
|
(3)
|
|
T1-F11
|
$ 12,824,432.50
|
(2)
|
|
T1-V11
|
$ 12,824,432.50
|
(3)
|
|
T1-F12
|
$ 13,102,562.00
|
(2)
|
|
T1-V12
|
$ 13,102,562.00
|
(3)
|
|
T1-F13
|
$ 13,342,662.00
|
(2)
|
|
T1-V13
|
$ 13,342,662.00
|
(3)
|
|
T1-F14
|
$ 13,542,414.50
|
(2)
|
|
T1-V14
|
$ 13,542,414.50
|
(3)
|
|
T1-F15
|
$ 13,699,771.50
|
(2)
|
|
T1-V15
|
$ 13,699,771.50
|
(3)
|
|
T1-F16
|
$ 13,813,056.00
|
(2)
|
|
T1-V16
|
$ 13,813,056.00
|
(3)
|
|
T1-F17
|
$ 13,880,806.50
|
(2)
|
|
T1-V17
|
$ 13,880,806.50
|
(3)
|
|
T1-F18
|
$ 13,902,067.50
|
(2)
|
|
T1-V18
|
$ 13,902,067.50
|
(3)
|
|
T1-F19
|
$ 13,876,234.00
|
(2)
|
|
T1-V19
|
$ 13,876,234.00
|
(3)
|
|
T1-F20
|
$ 13,803,025.00
|
(2)
|
|
T1-V20
|
$ 13,803,025.00
|
(3)
|
|
T1-F21
|
$ 13,680,456.50
|
(2)
|
|
T1-V21
|
$ 13,680,456.50
|
(3)
|
|
T1-F22
|
$ 12,938,139.00
|
(2)
|
|
T1-V22
|
$ 12,938,139.00
|
(3)
|
|
T1-F23
|
$ 12,208,034.00
|
(2)
|
|
T1-V23
|
$ 12,208,034.00
|
(3)
|
|
T1-F24
|
$ 11,522,999.50
|
(2)
|
|
T1-V24
|
$ 11,522,999.50
|
(3)
|
|
T1-F25
|
$ 129,958,644.00
|
(2)
|
|
T1-V25
|
$ 129,958,644.00
|
(3)
|
|
T1-F26
|
$ 3,068,406.00
|
(2)
|
|
T1-V26
|
$ 3,068,406.00
|
(3)
|
|
T1-F27
|
$ 2,930,169.50
|
(2)
|
|
T1-V27
|
$ 2,930,169.50
|
(3)
|
|
T1-F28
|
$ 2,798,611.00
|
(2)
|
|
T1-V28
|
$ 2,798,611.00
|
(3)
|
|
T1-F29
|
$ 2,673,385.50
|
(2)
|
|
T1-V29
|
$ 2,673,385.50
|
(3)
|
|
T1-F30
|
$ 2,554,169.00
|
(2)
|
|
T1-V30
|
$ 2,554,169.00
|
(3)
|
|
T1-F31
|
$ 1,782,064.00
|
(2)
|
|
T1-V31
|
$ 1,782,064.00
|
(3)
|
|
T1-F32
|
$ 658,587.50
|
(2)
|
|
T1-V32
|
$ 658,587.50
|
(3)
|
|
T1-F33
|
$ 2,332,544.00
|
(2)
|
|
T1-V33
|
$ 2,332,544.00
|
(3)
|
|
T1-F34
|
$ 569,324.50
|
(2)
|
|
T1-V34
|
$ 569,324.50
|
(3)
|
|
T1-F35
|
$ 631,525.00
|
(2)
|
|
T1-V35
|
$ 631,525.00
|
(3)
|
|
T1-F36
|
$ 1,028,715.50
|
(2)
|
|
T1-V36
|
$ 1,028,715.50
|
(3)
|
|
T1-F37
|
$ 138,038.00
|
(2)
|
|
T1-V37
|
$ 138,038.00
|
(3)
|
|
T1-F38
|
$ 1,124,387.00
|
(2)
|
|
T1-V38
|
$ 1,124,387.00
|
(3)
|
|
T1-F39
|
$ 868,154.00
|
(2)
|
|
T1-V39
|
$ 868,154.00
|
(3)
|
|
T1-F40
|
$ 215,424.50
|
(2)
|
|
T1-V40
|
$ 215,424.50
|
(3)
|
|
T1-F41
|
$ 1,044,269.00
|
(2)
|
|
T1-V41
|
$ 1,044,269.00
|
(3)
|
|
T1-F42
|
$ 1,006,404.00
|
(2)
|
|
T1-V42
|
$ 1,006,404.00
|
(3)
|
|
T1-F43
|
$ 969,928.00
|
(2)
|
|
T1-V43
|
$ 969,928.00
|
(3)
|
|
T1-F44
|
$ 934,789.00
|
(2)
|
|
T1-V44
|
$ 934,789.00
|
(3)
|
|
T1-F45
|
$ 900,937.50
|
(2)
|
|
T1-V45
|
$ 900,937.50
|
(3)
|
|
T1-F46
|
$ 868,325.50
|
(2)
|
|
T1-V46
|
$ 868,325.50
|
(3)
|
|
T1-F47
|
$ 836,905.00
|
(2)
|
|
T1-V47
|
$ 836,905.00
|
(3)
|
|
T1-F48
|
$ 806,634.00
|
(2)
|
|
T1-V48
|
$ 806,634.00
|
(3)
|
|
T1-F49
|
$ 777,467.50
|
(2)
|
|
T1-V49
|
$ 777,467.50
|
(3)
|
|
T1-F50
|
$ 749,365.00
|
(2)
|
|
T1-V50
|
$ 749,365.00
|
(3)
|
|
T1-F51
|
$ 20,029,158.50
|
(2)
|
|
T1-V51
|
$ 20,029,158.50
|
(3)
|
|
R-I
|
(4)
|
(4)
|
___________________________
(1)
For any Distribution
Date (and the related Interest Accrual Period), the interest rate
for the Class T1-A Interest shall be the Net WAC Rate, determined
without regard to the Swap Agreement (the “REMIC Net WAC
Rate”).
(2)
For any Distribution
Date (and the related Interest Accrual Period), the interest rate
for each of these interests shall be the lesser of (i) the REMIC
Swap Rate for such Distribution Date, and (ii) the product of (a)
the REMIC Net WAC Rate and (b) 2.
(3)
For any Distribution
Date (and the related Interest Accrual Period), the interest rate
for each of these interests shall be the excess, if any, of (i) the
product of (a) the REMIC Net WAC Rate and (b) 2, over (ii) the
REMIC Swap Rate for such Distribution Date.
(4)
The Class R-I interest
shall not have a principal amount and shall not bear interest.
The Class R-I interest is hereby designated as the sole class
of residual interest in REMIC I.
On each Distribution Date, the Securities
Administrator shall first pay or charge as an expense of
REMIC I all expenses of the Trust Fund for such Distribution
Date, other than any Net Swap Payment or Swap Termination Payment
required to be made from the Trust Fund.
On each Distribution Date, the Securities
Administrator shall distribute the aggregate Interest Remittance
Amount for each Group (net of expenses described in the preceding
paragraph) with respect to each of the REMIC I Regular Interests
based on the above-described interest rates.
On each Distribution Date, the Securities
Administrator shall distribute the aggregate Principal Remittance
Amount with respect to each Group with respect to the REMIC I
Regular Interests, first to the Class T1-A Interest until its
principal balance is reduced to zero, and then sequentially, to the
other REMIC I Regular Interests in ascending order of their
numerical class designation, and, with respect to each pair of
classes having the same numerical designation, in equal amounts to
each such class, until the principal balance of each such class is
reduced to zero. All losses on the Mortgage Loans shall be
allocated among the REMIC I Regular Interests in the same manner
that principal distributions are allocated.
On each Distribution Date, the Securities
Administrator shall distribute an amount equal to the amount then
on deposit in the Distribution Account that represents Prepayment
Premiums to the Class T1-F51 Interest.
REMIC II:
The following table sets forth the
designations, principal balances, and interest rates for each
interest in REMIC II, each of which (other than the R-II interest)
is hereby designated as a regular interest in REMIC II (the
“REMIC II Regular Interests”):
|
REMIC II
Class Designation
|
REMIC II
Interest Rate
|
Initial Class
Principal Amount
|
Corresponding
Class of
Certificate(s)
|
|
T2-A1A
|
(1)
|
½
Corresponding Class balance
|
A-1A
|
|
T2-A1B
|
(1)
|
½
Corresponding Class balance
|
A-1B
|
|
T2-A2
|
(1)
|
½
Corresponding Class balance
|
A-2
|
|
T2-A3
|
(1)
|
½
Corresponding Class balance
|
A-3
|
|
T2-A4
|
(1)
|
½
Corresponding Class balance
|
A-4
|
|
T2-M1
|
(1)
|
½
Corresponding Class balance
|
M-1
|
|
T2-M2
|
(1)
|
½
Corresponding Class balance
|
M-2
|
|
T2-M3
|
(1)
|
½
Corresponding Class balance
|
M-3
|
|
T2-M4
|
(1)
|
½
Corresponding Class balance
|
M-4
|
|
T2-M5
|
(1)
|
½
Corresponding Class balance
|
M-5
|
|
T2-M6
|
(1)
|
½
Corresponding Class balance
|
M-6
|
|
T2-M7
|
(1)
|
½
Corresponding Class balance
|
M-7
|
|
T2-M8
|
(1)
|
½
Corresponding Class balance
|
M-8
|
|
T2-M9
|
(1)
|
½
Corresponding Class balance
|
M-9
|
|
T2-M10
|
(1)
|
½
Corresponding Class balance
|
M-10
|
|
T2-M11
|
(1)
|
½
Corresponding Class balance
|
M-11
|
|
T2-Accrual
|
(1)
|
(4)
|
N/A
|
|
T2-IO
|
(2)
|
(2)
|
N/A
|
|
R-II
|
(3)
|
(3)
|
R
|
|
|
|
|
|
___________________________
(1)
For any Distribution
Date (and the related Interest Accrual Period), the interest rate
for each of these interests is a per annum rate equal to the
weighted average of the interest rates on the REMIC I Regular
Interests for such Distribution Date, provided, however,
that for any Distribution Date on which the Class T2-IO Interest is
entitled to a portion of the interest accruals on a REMIC I Regular
Interest having an “F” in its class designation, as
described in footnote two below, such weighted average shall be
computed by first subjecting the rate on such REMIC I Regular
Interest to a cap equal to the product of (i) two, and (ii) Swap
LIBOR for such Distribution Date (the “REMIC II Net WAC
Rate”).
(2)
The Class T2-IO is an
interest only class that does not have a principal balance.
For the applicable Distribution Date listed in the first
column in the table below, the Class T2-IO shall be entitled to
interest accrued on each REMIC I Regular Interest with the letter
“F” in its class designation listed in the second
column in the table below at a per annum rate equal to the excess,
if any, of (i) the interest rate for each such REMIC I Regular
Interest for such Distribution Date over (ii) the product of (a)
two, and (b) Swap LIBOR for such Distribution Date.
|
Distribution Dates
|
REMIC I
Class Designation
|
|
|
1
|
Class T1-F1
through T1-F51
|
|
|
2
|
Class T1-F2
through T1-F51
|
|
|
3
|
Class T1-F3
through T1-F51
|
|
|
4
|
Class T1-F4
through T1-F51
|
|
|
5
|
Class T1-F5
through T1-F51
|
|
|
6
|
Class T1-F7
through T1-F51
|
|
|
7
|
Class T1-F6
through T1-F51
|
|
|
8
|
Class T1-F8
through T1-F51
|
|
|
9
|
Class T1-F9
through T1-F51
|
|
|
10
|
Class T1-F10
through T1-F51
|
|
|
11
|
Class T1-F11
through T1-F51
|
|
|
12
|
Class T1-F12
through T1-F51
|
|
|
13
|
Class T1-F13
through T1-F51
|
|
|
14
|
Class T1-F14
through T1-F51
|
|
|
15
|
Class T1-F15
through T1-F51
|
|
|
16
|
Class T1-F16
through T1-F51
|
|
|
17
|
Class T1-F17
through T1-F51
|
|
|
18
|
Class T1-F18
through T1-F51
|
|
|
19
|
Class T1-F19
through T1-F51
|
|
|
20
|
Class T1-F20
through T1-F51
|
|
|
21
|
Class T1-F21
through T1-F51
|
|
|
22
|
Class T1-F22
through T1-F51
|
|
|
23
|
Class T1-F23
through T1-F51
|
|
|
24
|
Class T1-F24
through T1-F51
|
|
|
25
|
Class T1-F25
through T1-F51
|
|
|
26
|
Class T1-F26
through T1-F51
|
|
|
27
|
Class T1-F27
through T1-F51
|
|
|
28
|
Class T1-F28
through T1-F51
|
|
|
29
|
Class T1-F29
through T1-F51
|
|
|
30
|
Class T1-F30
through T1-F51
|
|
|
31
|
Class T1-F31
through T1-F51
|
|
|
32
|
Class T1-F33
through T1-F51
|
|
|
33
|
Class T1-F34
through T1-F51
|
|
|
34
|
Class T1-F37
through T1-F51
|
|
|
35
|
Class T1-F40
through T1-F51
|
|
|
36
|
Class T1-F35
through T1-F51
|
|
|
37
|
Class T1-F32
through T1-F51
|
|
|
38
|
Class T1-F36
through T1-F51
|
|
|
39
|
Class T1-F38
through T1-F51
|
|
|
40
|
Class T1-F39
through T1-F51
|
|
|
41
|
Class T1-F41
through T1-F51
|
|
|
42
|
Class T1-F42
through T1-F51
|
|
|
43
|
Class T1-F43
through T1-F51
|
|
|
44
|
Class T1-F44
through T1-F51
|
|
|
45
|
Class T1-F45
through T1-F51
|
|
|
46
|
Class T1-F46
through T1-F51
|
|
|
47
|
Class T1-F47
through T1-F51
|
|
|
48
|
Class T1-F48
through T1-F51
|
|
|
49
|
Class T1-F49
through T1-F51
|
|
|
50
|
Class T1-F50
through T1-F51
|
|
|
51
|
Class T1-F51
through T1-F51
|
|
(3)
The Class R-II interest
is the sole class of residual interests in REMIC II It does
not have an interest rate or a principal balance.
(4)
This interest shall have
an initial principal balance equal to the aggregate principal
balance of all the Mortgage Loans as of the Cut-off Date minus the
aggregate initial principal balance of each other regular interest
in REMIC II.
On each Distribution Date, interest shall
be distributed on the REMIC II Regular Interests based on the
above-described interest rates , provided, however , that
interest that accrues on the Class T2-Accrual Interest shall be
deferred in an amount equal to one-half of the increase, if any, in
the Overcollateralized Amount for such Distribution Date. Any
interest so deferred shall itself bear interest at the interest
rate for the Class T2-Accrual Interest. An amount equal to
the interest so deferred shall be distributed as additional
principal on the other REMIC II Regular Interests having a
principal balance in the manner described under priority
First below.
On each Distribution Date principal shall
be distributed, and Realized Losses shall be allocated, among the
REMIC II Regular Interests in the following order of
priority:
First , to the Class T2-A1A, Class T2-A1B, Class T2-A2,
Class T2-A3, Class T2-A4, Class T2-M1, Class T2-M2, Class T2-M3,
Class T2-M4, Class T2-M5, Class T2-M6, Class T2-M7, Class T2-M8,
Class T2-M9, Class T2-M10, and Class T2-M11 Interests until the
principal balance of each such REMIC II Regular Interest equals
one-half of the Class Principal Amount of the Corresponding Class
of Certificates immediately after such Distribution Date;
and
Second , to the Class T2-Accrual Interest, any remaining
amounts.
On each Distribution Date, the Securities
Administrator shall be deemed to have distributed the Prepayment
Premiums passed through with respect to the Class T1-F51 REMIC I
Regular Interests on such Distribution Date to the Class T2-Accrual
Interest.
Master REMIC:
The following table sets forth
characteristics of the Certificates, each of which, except for the
Class R Certificates, is hereby designated as a “regular
interest” in the REMIC III:
|
Class
|
Original
Class
Principal Amount
|
Pass-Through
Rate
|
|
Class A-1A
|
$311,578,000
|
(1)
|
|
Class A-1B
|
$34,620,000
|
(1)
|
|
Class A-2
|
$167,695,000
|
(1)
|
|
Class A-3
|
$194,958,000
|
(1)
|
|
Class A-4
|
$30,838,000
|
(1)
|
|
Class M-1
|
$34,370,000
|
(1)
|
|
Class M-2
|
$31,466,000
|
(1)
|
|
Class M-3
|
$19,848,000
|
(1)
|
|
Class M-4
|
$16,459,000
|
(1)
|
|
Class M-5
|
$15,491,000
|
(1)
|
|
Class M-6
|
$14,039,000
|
(1)
|
|
Class M-7
|
$13,555,000
|
(1)
|
|
Class M-8
|
$11,618,000
|
(1)
|
|
Class M-9
|
$10,650,000
|
(1)
|
|
Class M-10
|
$10,650,000
|
(1)
|
|
Class M-11
|
$9,680,000
|
(1)
|
|
Class C
|
(2)
|
(2)
|
|
Class P
|
$100
|
(3)
|
|
Class R (4)
|
N/A
|
N/A
|
(1)
The lesser of the
related Formula Rate and the Net WAC Rate. Any entitlement to
Net WAC Rate Carryover Amounts shall not be an obligation of any
REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to “Net WAC Rate” in the
preceding sentence shall be deemed to be a reference to the REMIC
II Net WAC Rate; therefore, on any Distribution Date on which the
Pass-Through Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Rate Reserve Fund or the
Supplemental Interest Trust, as applicable; on any Distribution
Date on which the Pass-Through Rate on a Class of Certificates is
based on the Net WAC Rate, the amount of interest that would have
accrued on such Class of Certificates if the REMIC II Net WAC Rate
were substituted for the Net WAC Rate shall be treated as having
been paid by the holder of such Certificate to the Supplemental
Interest Trust, all pursuant to and as further provided in Section
10.01(k) hereof.
(2)
The Class C Certificates
shall represent ownership of a regular interest (the “Class C
Interest”), which shall comprise two notional components, the
first of which has a notional balance equal to the aggregate Stated
Principal Balance of the Mortgage Loans. The initial interest
rate of the Class C Interest shall be a rate sufficient to cause
all net interest from the Mortgage Loans to accrue on the Class C
Interest that is in excess of the amount of interest that accrues
on the Class A Certificates and the Class M Certificates. For
any Distribution Date, the Pass-Through Rate in respect of the
Class C Interest shall be the excess of: (i) the Net WAC Rate over
(ii) the product of: (A) two and (B) the weighted average
Pass-Through Rate of the REMIC II Regular Interests and the Class
T2-Accrual Interest, where the Class T2-Accrual Interest is subject
to a cap equal to zero and each remaining REMIC II Regular Interest
is subject to a cap equal to the Pass-Through Rate on its
Corresponding Class. The second notional component represents
the right to receive all distributions in respect of the Class
T2-IO Interest in REMIC II. The Class C Interest shall also be
entitled to principal equal to the excess of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date
(less $100.00) over the aggregate Class Principal Amount of the
Class A Certificates and Class M Certificates as of the Closing
Date. Such principal balance shall not bear interest.
Also, the Class C Certificates shall represent beneficial
ownership of (i) the Net WAC Reserve Fund, (ii) the Supplemental
Interest Trust, and (iii) an interest in the interest rate cap
contracts described in Section 10.01(k) hereof.
(3)
The Class P Certificates
shall not be entitled to payments of interest, but shall be
entitled to receive all Prepayment Premiums in respect of the
Mortgage Loans.
(4)
REMIC III shall also
issue the R-III interest, which shall not have a principal amount
and shall not bear interest. The R-III interest is hereby
designated as the sole class of residual interest in REMIC III.
The Class R Certificates shall represent the beneficial
ownership of the R-II and R-III interests.
The foregoing REMIC structure is intended
to cause all of the cash from the Mortgage Loans to flow through to
the Master REMIC as cash flow on a REMIC regular interest, without
creating any shortfall, actual or potential (other than for credit
losses), to any REMIC regular interest. To the extent that
the structure is believed to diverge from such intention, the party
identifying any ambiguity or drafting error shall notify the other
parties hereto, and the parties hereto shall attempt to resolve
such ambiguity or correct such drafting error in accordance with
Section 11.01 to accomplish such intention.
SECTION 1.04.
Rights of the NIMS Insurer.
Each of the rights of the NIMS Insurer
set forth in this Agreement shall exist so long as (i) the NIMS
Insurer has undertaken to guarantee certain payments of notes
issued pursuant to an indenture and (ii) any series of notes issued
pursuant to one or more indentures remain outstanding or the NIMS
Insurer is owed amounts in respect of its guarantee of payment on
such notes; provided, however, that 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.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01.
Conveyance of Mortgage Loans.
(a)
The Depositor, concurrently with the
execution and delivery hereof, does hereby establish the Trust and
transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security
interest therein for the benefit of the Depositor, in and to the
Mortgage Loans identified on the Mortgage Loan Schedule, the rights
of the Depositor under the Assignment and Assumption Agreement,
each Mortgage Loan Purchase Agreement and the Reconstitution
Agreement, and all other assets included or to be included in the
Trust Fund. Such assignment includes all interest and
principal received by the Seller, the Depositor or the Servicer on
or with respect to the Mortgage Loans (other than payments of
principal and interest due on such Mortgage Loans on or before the
Cut-off Date). The Depositor herewith delivers to the Trustee
and the Securities Administrator an executed copy of the
Reconstitution Agreement. In addition, on or prior to the
Closing Date, the Securities Administrator shall execute the Swap
Agreement and the Depositor hereby directs the Securities
Administrator to do so. With respect to any Mortgage Loan
that does not have a first payment date during the Due Period
related to the first Distribution Date, the Depositor shall deposit
into the Distribution Account on or before the Servicer Remittance
Date relating to the first Distribution Date, an amount equal to
one month’s interest at the related Net Mortgage Rate on the
Cut-off Date Stated Principal Balance of such Mortgage
Loan.
If the assignment and transfer of the
Mortgage Loans and the other property specified in this Section
2.01 from the Depositor to the Trustee pursuant to this Agreement
is held or deemed not to be a sale or is held or deemed to be a
pledge of security for a loan, the Depositor intends that the
rights and obligations of the parties shall be established pursuant
to the terms of this Agreement and that, in such event, (i) the
Depositor shall be deemed to have granted and does hereby grant to
the Trustee, for the benefit of the Certificateholders, as of the
Closing Date a perfected, first priority security interest in the
entire right, title and interest of the Depositor in and to the
Mortgage Loans and all other property conveyed to the Trust Fund
pursuant to this Section 2.01 and all proceeds thereof,
substitutions therefor and accessions thereto, and (ii) this
Agreement shall constitute a security agreement under applicable
law.
In connection with such transfer and
assignment, the Depositor does hereby deliver to, and deposit with
the Custodian a copy of the related Mortgage Loan Schedule in an
electronic, machine readable medium, and the following documents or
instruments with respect to each Mortgage Loan so transferred and
assigned (each, a “Mortgage File”):
(i)
the original Mortgage Note, endorsed in
blank or in the following form: “Pay to the order of U.S.
Bank National Association, as Trustee under the applicable
agreement, without recourse,” with all prior and intervening
endorsements showing a complete chain of endorsement from the
originator to the Person so endorsing to the Trustee or a copy of
such original Mortgage Note with an accompanying lost note
affidavit executed by the Seller;
(ii)
the original Mortgage with evidence of
recording thereon, and a copy, certified by the appropriate
recording office, of the recorded power of attorney, if the
Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(iii)
an original Assignment of the Mortgage in
blank;
(iv)
the original recorded Assignment or
Assignments of the Mortgage showing a complete chain of assignment
from the originator to the Person assigning the Mortgage to the
Trustee or in blank;
(v)
the original or copies of each
assumption, modification, written assurance or substitution
agreement, if any; and
(vi)
with respect to any first lien Mortgage
Loan, the original lender’s title insurance policy, if
available, together with all endorsements or riders which were
issued with or subsequent to the issuance of such policy, insuring
the priority of the Mortgage as a first lien on the Mortgaged
Property represented therein as a fee interest vested in the
Mortgagor, or in the event such original title policy is
unavailable, a written commitment or uniform binder or preliminary
report of title issued by the title insurance or escrow company, if
available.
Notwithstanding the foregoing, the
Trustee, if applicable, acknowledges receipt of items listed under
clause (v) above only to the extent that it has received a written
schedule of the items to be delivered to the Custodian pursuant to
such clause (v).
The Depositor hereby represents that, on
the Closing Date (i) no more than 1% of the Mortgage Loans by
Stated Principal Balance as of the Cut-off Date may have lost note
affidavits in lieu of the original Mortgage Notes and (ii) the
Depositor shall cause the Originator to deliver to the Custodian,
on behalf of the Trustee, a copy of the original Mortgage Note for
each Mortgage Loan with respect to which a lost note affidavit is
delivered.
The Depositor shall cause the Originator,
at its expense, to promptly (and in no event later than thirty (30)
Business Days, subject to extension upon a mutual agreement among
the Depositor, the Servicer and the Trustee, following the later of
the Closing Date and the date of receipt by the Servicer or the
Trustee, as the case may be, of the recording information for a
Mortgage) submit or cause to be submitted to the Custodian, as
applicable, for recording, at no expense to the Trust Fund, the
Servicer, the Trustee or the Custodian, as applicable, in the
appropriate public office for real property records, each
Assignment referred to in clauses (iii) and (iv) above in this
Section 2.01(a) and shall execute each original Assignment in the
following form: “U.S. Bank National Association, as Trustee
under the applicable agreement, without recourse.” In the
event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Depositor shall or shall cause the
Originator to promptly prepare or cause to be prepared a substitute
Assignment or cure or cause to be cured such defect, as the case
may be, and thereafter cause each such Assignment to be duly
recorded. Notwithstanding the foregoing, in lieu of recording
such Assignments, the Depositor may provide to the Trustee and the
Securities Administrator an Opinion of Counsel to the effect that
such recording is not required to evidence the Trust’s
interest in the related Mortgage Loan.
If any of the documents referred to in
clauses (ii), (iii), (iv) or (v) above in this Section 2.01(a) has
as of the Closing Date been submitted for recording but either (x)
has not been returned from the applicable public recording office
or (y) has been lost or such public recording office has retained
the original of such document, the obligations of the Depositor to
deliver such documents shall be deemed to be satisfied upon (1)
delivery to the Custodian 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 or delivery to 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 was not delivered
pursuant to clause (vi) above in this Section 2.01(a), the
Depositor shall deliver or cause to be delivered to the Custodian
promptly after receipt thereof, the original lender’s title
insurance policy, if available. The Depositor shall deliver
or cause to be delivered to the Custodian promptly upon receipt
thereof any other original documents constituting a part of a
Mortgage File received with respect to any Mortgage Loan,
including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.
All original documents relating to the
Mortgage Loans that are not delivered to the Custodian are and
shall be held by or on behalf of the Depositor or the Servicer, as
the case may be, in trust for the benefit of the Trustee on behalf
of the Certificateholders. In the event that any such
original document is required pursuant to the terms of this Section
to be a part of a Mortgage File, such document shall be delivered
promptly to the Custodian. Any such original document
delivered to or held by the Depositor that is not required pursuant
to the terms of this Section to be a part of a Mortgage File, shall
be delivered promptly to the Servicer.
The Depositor shall deliver or cause the
Originator or the Custodian to deliver to the Servicer copies of
all trailing documents required to be included in the Servicing
File at the same time the originals or certified copies thereof are
delivered to the Custodian which documents shall include, but are
not limited to, the mortgagee policy of title insurance and any
Mortgage Loan documents upon return from the recording office.
The Servicer shall not be responsible for any custodial fees
other than costs incurred in obtaining such documents, and the
Servicer shall be entitled to reimbursement from the Seller for any
reasonable costs incurred in obtaining such documents.
(b)
It is agreed and understood by the
Depositor, the Seller, the Servicer and the Trustee that it is not
intended that any Mortgage Loan be included in the Trust Fund that
is a high-cost home loan as defined by the HOEPA or any other
applicable predatory or abusive lending laws.
SECTION 2.02.
Acceptance of REMIC I by the
Trustee.
Subject to the provisions of Section 2.01
and subject to any exceptions noted on the exception report
described in the next paragraph below, and pursuant to the
Custodial Agreement, in an initial certification to the Trustee,
the Custodian has acknowledged receipt of the documents referred to
in Section 2.01 (other than such documents described in Section
2.01(a)(iv)) above, the Securities Administrator acknowledges
receipt of amounts, if any, on deposit in each of the Net WAC
Reserve Fund and the Distribution Account and the Trustee
acknowledges receipt of all other assets included under clauses
(i), (iii), (iv) and (v) (other than the Collection Account) of the
definition of “REMIC I” (to the extent of amounts
deposited into the Distribution Account) and declares that the
Trustee or the Custodian, as applicable, holds and will hold such
documents and the other documents delivered to it constituting the
Mortgage File on behalf of the Trust, and that it holds or will
hold all such assets and such other assets included in the
definition of “REMIC I” in trust for the exclusive use
and benefit of all present and future Certificateholders. The
Securities Administrator also acknowledges receipt of the amounts
on deposit in the Net WAC Reserve Fund in trust for the exclusive
use and benefit of all present and future Certificateholders.
The Trustee agrees on or before the
Closing Date, for the benefit of the Certificateholders, to cause
the Custodian to review, each Mortgage File and to cause the
Custodian to deliver a certification, to the Depositor, the Seller,
the Servicer, the Securities Administrator and the Trustee in
substantially the form attached hereto as Exhibit C-1. It is
herein acknowledged that, in conducting such review, neither the
Trustee nor the Custodian was under any duty or obligation (i) to
inspect, review or examine any such documents, instruments,
certificates or other papers to determine whether they are genuine,
enforceable, or appropriate for the represented purpose (including
with respect to Section 2.01(a)(vi), whether such title insurance
policy insures the priority of the Mortgage as a first lien) or
whether they have actually been recorded or that they are other
than what they purport to be on their face or (ii) to determine
whether any Mortgage File should include any of the documents
specified in Section 2.01(a)(v).
Prior to the first anniversary date of
this Agreement, the Trustee shall cause the Custodian to deliver to
the Depositor, the Trustee, the Seller and the Servicer a final
certification in the form annexed hereto as Exhibit C-2 evidencing
the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
If in the process of reviewing the
Mortgage Files and making or preparing, as the case may be, the
certifications referred to above, the Custodian 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 Custodian shall so notify the Depositor, the Seller, the
Securities Administrator, the Trustee and the Servicer. In
addition, upon the discovery by the Depositor, the Servicer, the
Custodian or the Trustee of a breach of any of the representations
and warranties made by the Originator or the Seller in the Mortgage
Loan Purchase Agreement or this Agreement, respectively, in respect
of any Mortgage Loan which materially adversely affects such
Mortgage Loan or the interests of the related Certificateholders in
such Mortgage Loan, the party discovering such breach shall give
prompt written notice to the other parties.
Enforcement of each Mortgage Loan
Purchase Agreement or this Agreement against the Originator or the
Seller, respectively, shall be effected by the Securities
Administrator on behalf of the Trustee. The Securities
Administrator on behalf of the Trustee 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
Person against which such enforcement is directed; provided,
however, if the sources of reimbursement described in clauses (i)
and (ii) are insufficient, the Securities Administrator on behalf
of the Trustee may seek reimbursement for any remaining
unreimbursed costs of such enforcement from the Trust Fund as an
Extraordinary Trust Fund Expense.
SECTION 2.03.
Repurchase or Substitution of Mortgage
Loans by the Originator, the Seller or the Depositor; Payment of
Prepayment Premiums in the Event of Breach.
(a)
(i)Upon discovery by any of the parties
hereto or receipt of notice by a Responsible Officer in the
Corporate Trust Office of the Trustee and the Securities
Administrator of any materially defective document in, or that a
document is missing from, the Mortgage File or of the breach by the
Originator of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement or the Reconstitution Agreement in
respect of any Mortgage Loan that materially adversely affects the
value of such Mortgage Loan or the interest therein of the
Certificateholders, such party or the Trustee shall promptly notify
the Seller and the Servicer of such defect, missing document or
breach and cause the Originator to 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;
provided that such missing document was not previously delivered by
the Originator under the Mortgage Loan Purchase Agreement and the
Reconstitution Agreement. Notwithstanding the foregoing, if
applicable, any breach by the Originator of the Freddie Mac
Representations (as defined and set forth in the Reconstitution
Agreement) shall be deemed to materially and adversely affect the
interests of the Certificateholders in that Mortgage Loan. If
the Originator does not deliver such missing document or cure such
defect or breach in all material respects during such period, the
Securities Administrator on behalf of the Trustee shall enforce the
obligations of the Originator under the Mortgage Loan Purchase
Agreement and the Reconstitution Agreement to repurchase such
Mortgage Loan from the Trust Fund at the Purchase Price, to the
extent that the Originator is obligated to do so under the Mortgage
Loan Purchase Agreement and the Reconstitution Agreement. In
the event that the Originator shall fail to cure the applicable
breach or repurchase a Mortgage Loan in accordance with the
preceding sentence, the Depositor shall do so. The Purchase
Price for the repurchased Mortgage Loan shall be deposited in the
Distribution Account, and the Securities Administrator on behalf of
the Trustee, upon receipt of such deposit, shall release or cause
the Custodian to release to the Originator or the Depositor, as the
case may be, the related Mortgage File and the Trustee shall
execute and deliver such instruments of transfer or assignment, in
each case without recourse, (provided, however, that in the
instruments of transfer or assignment, the Trustee shall represent
and warrant to the Originator or the Depositor, as applicable, that
the repurchased Mortgage Loan is free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security interest created by
the Trustee and its successors, assigns and transferees), as the
Originator or the Depositor, as applicable, shall furnish to it and
as shall be necessary to vest in the Originator or the Depositor,
as the case may be, any Mortgage Loan released pursuant hereto, and
the Securities Administrator and the Trustee shall have no further
responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so
provided in the Mortgage Loan Purchase Agreement, the
Reconstitution Agreement or this Agreement, the Originator or the
Depositor, as applicable, 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(c). It is understood
and agreed that the obligation of the Originator or the Depositor,
as applicable, to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which a document is missing, a material defect
in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy
respecting such omission, defect or breach available to the
Securities Administrator and the Trustee on behalf of the
Certificateholders.
(ii)
Upon discovery by any of the parties
hereto or receipt of notice by a Responsible Officer in the
Corporate Trust Office of the Trustee of any breach by the Seller
of any representation, warranty or covenant made by the Seller in
Section 2.05(b)(i), (ii) and (iii) in respect of any Mortgage Loan
that materially adversely affects the value of such Mortgage Loan
or the interest therein of the Certificateholders (in the case of
any such representation or warranty made to the knowledge or the
best of knowledge of the Seller as to which the Seller has no
knowledge, without regard to the Seller’s lack of knowledge
with respect to the substance of such representation or warranty
being inaccurate at the time it was made), such party or the
Trustee shall promptly notify the Seller and the Servicer of such
breach and cause the Seller to cure such breach within 90 days from
the date the Seller was notified of such breach. If the
Seller fails to cure such breach in all material respects during
such period, the Seller shall repurchase such Mortgage Loan from
the Trust Fund at the Purchase Price. In the event that the
Seller shall fail to cure the applicable breach or repurchase a
Mortgage Loan in accordance with the preceding sentence, the
Depositor shall do so. The Purchase Price for the repurchased
Mortgage Loan shall be deposited in the Distribution Account, and
the Securities Administrator, upon receipt of such deposit, shall
release or cause the Custodian to release to the Seller or the
Depositor, as the case may be, the related Mortgage File and the
Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, (provided, however, that
in the instruments of transfer or assignment, the Trustee shall
represent and warrant to the Originator or the Depositor, as
applicable, that the repurchased Mortgage Loan is free and clear of
any encumbrance, equity, lien, pledge, charge, claim or security
interest created by the Trustee and its successors, assigns and
transferees), as the Seller or the Depositor, as applicable, shall
furnish to it and as shall be necessary to vest in the Seller or
the Depositor, as the case may be, any Mortgage Loan released
pursuant hereto, and the Trustee shall have no further
responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so
provided in the Mortgage Loan Purchase Agreement, the
Reconstitution Agreement or this Agreement, the Seller or the
Depositor, as applicable, 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(c). It is understood
and agreed that the obligation of the Seller or the Depositor, as
applicable, to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such breach
available to the Trustee on behalf of the
Certificateholders.
(b)
(i)
As promptly as practicable (and no later
than 90 days) after the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any
representation, warranty or covenant of the Servicer set forth in
Section 2.05(a) which materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan, the
Servicer shall cure such breach in all material
respects.
(ii)
If the covenant made by the Servicer in
Section 2.05(a)(vii) is breached and remains uncured, the Servicer
shall pay into the Collection Account the amount of the waived
Prepayment Premium. If the Servicer shall fail to make any
payment required pursuant to this Section 2.03(b)(ii), either the
Trustee or the Seller may enforce such obligation.
(c)
Any substitution of Qualified Substitute
Mortgage Loans for Deleted Mortgage Loans made pursuant to Section
2.03(a) must be effected prior to the date that is two years after
the Closing Date for the Trust Fund.
As to any Deleted Mortgage Loan for which
the Originator, the Seller or the Depositor substitutes a Qualified
Substitute Mortgage Loan or Loans, such substitution shall be
effected by the Originator, the Seller or the Depositor, as the
case may be, delivering to the Custodian on behalf of the Trustee,
for such Qualified Substitute Mortgage Loan or Loans, the Mortgage
Note, the Mortgage, the Assignment to the Trustee, and such other
documents and agreements, with all necessary endorsements thereon,
as are required by Section 2.01, together with an Officers’
Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the
Substitution Shortfall Amount (as described below), if any, in
connection with such substitution. The Custodian shall
acknowledge receipt for such Qualified Substitute Mortgage Loan or
Loans and, within ten Business Days thereafter, review such
documents as specified in Section 2.02 and deliver to the Trustee,
the Depositor, the Seller, the Securities Administrator and the
Servicer, with respect to such Qualified Substitute Mortgage Loan
or Loans, a certification substantially in the form attached hereto
as Exhibit C-1, with any applicable exceptions noted thereon.
Within one year of the date of substitution, the Custodian
shall deliver to the Trustee, the Securities Administrator, the
Depositor, the Seller and the Servicer a certification
substantially in the form of Exhibit C-2 hereto with respect to
such Qualified Substitute Mortgage Loan or Loans, with any
applicable exceptions noted thereon. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of
substitution are not part of the Trust Fund and will be retained by
the Originator, the Seller or the Depositor, as the case may be.
For the month of substitution, distributions to
Certificateholders will reflect the Monthly Payment due on such
Deleted Mortgage Loan on or before the Due Date in the month of
substitution, and the Originator, the Seller or the Depositor, as
the case may be, shall thereafter be entitled to retain all amounts
subsequently received in respect of such Deleted Mortgage Loan.
The Servicer shall amend the Mortgage Loan Schedule to
reflect the removal of such Deleted Mortgage Loan from the terms of
this Agreement and the substitution of the Qualified Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended
Mortgage Loan Schedule to the Securities Administrator and the
Trustee in an electronic format. Upon such substitution, such
Qualified Substitute Mortgage Loan or Loans shall constitute part
of the Mortgage Pool and part of the related Group and shall be
subject in all respects to the terms of this Agreement, including,
in the case of a substitution effected by the Originator or the
Seller, all applicable representations and warranties thereof
included in the Mortgage Loan Purchase Agreement or this Agreement,
respectively, and in the case of a substitution effected by the
Depositor, all applicable representations and warranties thereof
set forth in Section 2.04.
For any month in which the Originator,
the Seller or the Depositor substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans,
the Servicer will determine the amount (the “Substitution
Shortfall Amount”), if any, by which the aggregate Purchase
Price of all such Deleted Mortgage Loans exceeds the aggregate of,
as to each such Qualified Substitute Mortgage Loan, the Stated
Principal Balance thereof as of the date of substitution, together
with one month’s interest on such Stated Principal Balance at
the applicable Net Mortgage Rate, plus all outstanding P&I
Advances and Servicing Advances and any costs and damages actually
incurred and paid by or on behalf of the Trust in connection with
any violation by such Mortgage Loan of (i) the representations and
warranties set forth in Section 2.05(b)(i), (ii) or (iii) of this
Agreement, (ii) Section 2(a)(viii) of Schedule B to the
Reconstitution Agreement or (iii) the representations and
warranties made in connection with “high-cost” home
loans or any predatory or abusive lending laws in Schedule B to the
Reconstitution Agreement, as applicable. On the date of such
substitution, which shall be on or prior to the next succeeding
Determination Date, the Originator, the Seller or the Depositor, as
the case may be, will deliver or cause to be delivered to the
Servicer for deposit in the Collection Account an amount equal to
the Substitution Shortfall Amount, if any, and the Custodian, upon
receipt of the related Qualified Substitute Mortgage Loan or Loans
and certification by the Servicer of such deposit, shall release to
the Originator or the Depositor, as the case may be, the related
Mortgage File or Files and the Trustee shall execute and deliver
such instruments of transfer or assignment, in each case without
recourse, as the Originator, the Seller or the Depositor, as the
case may be, shall deliver to it and as shall be reasonably
necessary to vest therein any Deleted Mortgage Loan released
pursuant hereto.
In addition, the Originator, the Seller
or the Depositor, as the case may be, shall obtain at its own
expense and deliver to the Trustee an Opinion of Counsel to the
effect that such substitution will not cause (a) any federal tax to
be imposed on any of the REMICs, created hereunder, including
without limitation, any federal tax imposed on “prohibited
transactions” under Section 860F(a)(1) of the Code or on
“contributions after the startup date” under Section
860G(d)(1) of the Code, or (b) any REMIC hereunder to fail to
qualify as a REMIC at any time that any Certificate is
outstanding.
(d)
Upon discovery by the Depositor, the
Servicer, the Securities Administrator 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, the Seller or the Depositor,
as the case may be, shall repurchase or, subject to the limitations
set forth in Section 2.03(c), 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. The Depositor shall
cause such repurchase or substitution to be made by (i) 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 applicable Mortgage Loan Purchase Agreement, (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 2.04, or if its
status as a non-qualified mortgage is a breach of any
representation or warranty (other than a representation and
warranty of the Originator or the Seller) or (iii) the Seller, if
the affected Mortgage Loan’s status as a non-qualified
mortgage is a breach of any representation or warranty of the
Seller set forth in Section 2.05(b)(i), (ii) and (iii), or if its
status as a non-qualified mortgage is a breach of any
representation or warranty (other than a representation and
warranty of the Originator or the Depositor). 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
Originator, the Seller or the Depositor, as the case may be, the
Mortgage Loan to be released pursuant hereto in the same manner,
and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.
SECTION 2.04.
Representations and Warranties of the
Depositor.
The Depositor hereby represents, warrants
and covenants to the Trustee, the Swap Provider and the
Securities Administrator that as of the Closing Date:
(i)
the Depositor is a corporation duly
organized, validly existing and in good standing under the laws
governing its creation and existence and has full corporate power
and authority to own its property, to carry on its business as
presently conducted, to enter into and perform its obligations
under this Agreement, and to create the trust pursuant
hereto;
(ii)
the execution and delivery by the
Depositor of this Agreement have been duly authorized by all
necessary corporate action on the part of the Depositor; neither
the execution and delivery of this Agreement, nor the consummation
of the transactions herein contemplated, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on
the Depositor or its properties or the certificate of incorporation
or bylaws of the Depositor;
(iii)
the execution, delivery and performance
by the Depositor of this Agreement and the consummation of the
transactions contemplated hereby do not require the consent or
approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of, any state, federal or
other governmental authority or agency, except such as has been
obtained, given, effected or taken prior to the date
hereof;
(iv)
this Agreement has been duly executed and
delivered by the Depositor and, assuming due authorization,
execution and delivery by the Trustee, the Servicer, the Seller and
the Securities Administrator, constitutes a valid and binding
obligation of the Depositor enforceable against it in accordance
with its terms except as such enforceability may be subject to (A)
applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally and
(B) general principles of equity regardless of whether such
enforcement is considered in a proceeding in equity or at
law;
(v)
there are no actions, suits or
proceedings pending or, to the knowledge of the Depositor,
threatened or likely to be asserted against or affecting the
Depositor, before or by any court, administrative agency,
arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) with respect to
any other matter which in the judgment of the Depositor will be
determined adversely to the Depositor and will if determined
adversely to the Depositor materially and adversely affect it or
its business, assets, operations or condition, financial or
otherwise, or adversely affect its ability to perform its
obligations under this Agreement;
(vi)
immediately prior to the transfer and
assignment of the Mortgage Loans to the Trustee, the Depositor was
the sole owner of record and holder of each Mortgage Loan, and the
Depositor had good and marketable title thereto, and had full right
to transfer and sell each Mortgage Loan to the Trustee free and
clear, subject only to (1) liens of current real property taxes and
assessments not yet due and payable and, if the related Mortgaged
Property is a condominium unit, any lien for common charges
permitted by statute, (2) covenants, conditions and restrictions,
rights of way, easements and other matters of public record as of
the date of recording of such Mortgage acceptable to mortgage
lending institutions in the area in which the related Mortgaged
Property is located and specifically referred to in the
lender’s title insurance policy or attorney’s opinion
of title and abstract of title delivered to the originator of such
Mortgage Loan, and (3) such other matters to which like properties
are commonly subject which do not, individually or in the
aggregate, materially interfere with the benefits of the security
intended to be provided by the Mortgage, of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or
security interest, and had full right and authority, subject to no
interest or participation of, or agreement with, any other party,
to sell and assign each Mortgage Loan pursuant to this
Agreement;
(vii)
This Agreement creates a valid and
continuing security interest (as defined in the applicable Uniform
Commercial Code (the “UCC”)), in the Mortgage Loans in
favor of the Trustee, which security interest is prior to all other
liens, and is enforceable as such against creditors of and
purchasers from the Depositor;
(viii)
The Mortgage Loans constitute
“instruments” within the meaning of the applicable
UCC;
(ix)
Other than the security interest granted
to the Trustee pursuant to this Agreement, the Depositor has not
pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Mortgage Loans. The Depositor
has not authorized the filing of and is not aware of any financing
statement against the Depositor that includes a description of the
collateral covering the Mortgage Loans other than a financing
statement relating to the security interest granted to the Trustee
hereunder or that has been terminated. The Depositor is not
aware of any judgment or tax lien filings against the
Depositor;
(x)
None of the Mortgage Loans have any marks
or notations indicating that such Mortgage Loans have been pledged,
assigned or otherwise conveyed to any Person other than the
Trustee;
(xi)
The Depositor has received all consents
and approvals required by the terms of the Mortgage Loans to convey
the Mortgage Loans hereunder to the Trustee; and
(xii)
the Trust is a common law trust duly
organized and validly existing under the laws of the state of New
York.
SECTION 2.05.
Representations, Warranties and Covenants
of the Servicer and the Seller.
(a)
The Servicer hereby represents, warrants
and covenants to the Trustee, the Seller, the Securities
Administrator and to the Depositor that as of the Closing Date or
as of such date specifically provided herein:
(i)
The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of
the State of California and is duly authorized and qualified to
transact any and all business contemplated by this Agreement to be
conducted by the Servicer in any state in which a Mortgaged
Property related to a Mortgage Loan is located or is otherwise not
required under applicable law to effect such qualification and, in
any event, is in compliance with the doing business laws of any
such State, to the extent necessary to ensure its ability to
enforce each Mortgage Loan serviced and to service the Mortgage
Loans in accordance with the terms of this Agreement;
(ii)
The Servicer has the full power and
authority to service each Mortgage Loan which the Servicer is
required to service hereunder, and to execute, deliver and perform,
and to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized by all necessary action on
the part of the Servicer the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization,
execution and delivery thereof by the Depositor, the Seller, the
Securities Administrator and the Trustee, constitutes a legal,
valid and binding obligation of the Servicer, enforceable against
the Servicer in accordance with its terms, except to the extent
that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to creditors’ rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought;
(iii)
The execution and delivery of this
Agreement by the Servicer, the servicing of the Mortgage Loans by
the Servicer hereunder, the consummation by the Servicer of any
other of the transactions herein contemplated, and the fulfillment
of or compliance with the terms hereof are in the ordinary course
of business of the Servicer and will not (A) result in a breach of
any term or provision of the organizational documents of the
Servicer or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any
other material agreement or instrument to which the Servicer is a
party or by which it may be bound, or any statute, order or
regulation applicable to the Servicer of any court, regulatory
body, administrative agency or governmental body having
jurisdiction over the Servicer; and the Servicer is not a party to,
bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it, which materially and adversely affects or, to the
Servicer’s knowledge, would in the future materially and
adversely affect, (x) the ability of the Servicer to perform its
obligations under this Agreement or (y) the business, operations,
financial condition, properties or assets of the Servicer taken as
a whole;
(iv)
The Servicer is an approved
seller/servicer for Fannie Mae and an approved ser
