[ACCREDITED ACCEPTANCE
CORP.]
Depositor,
[ACCREDITED HOME LENDERS,
INC.]
Servicer and
Sponsor,
and
[
]
Trustee
POOLING AND SERVICING
AGREEMENT
Dated as of [
], 20[ ]
Mortgage Pass-Through
Certificates
Series [
]
TABLE OF CONTENTS
Page
This Pooling and Servicing
Agreement, dated and effective as of [
], is entered into among Accredited Acceptance Corp., as depositor
(the “Depositor”), Accredited Home Lenders, Inc., as
servicer (the “Servicer”), and [TRUSTEE], as trustee
(the “Trustee”).
PRELIMINARY
STATEMENT:
The Depositor intends to sell
pass-through certificates (collectively, the
“Certificates”), to be issued hereunder in multiple
classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Trust Fund created hereunder. The
Certificates will consist of [
] classes of certificates, designated as (i) [the Class 1-A1-A
Certificates, (ii) the Class 1-A1-B Certificates,
(iii) the Class 1-A1-C Certificates, (iv) the Class 1-AM
Certificates, (v) the Class 2-A Certificates, (vi) the
Class 1-M-1 Certificates, (vii) the Class 1-M-2 Certificates,
(viii) the Class 1-M-3 Certificates, (ix) the Class 1-M-4
Certificates, (x) the Class 1-M-5 Certificates, (xi) the
Class 1-M-6 Certificates, (xii) the Class 1-M-7 Certificates,
(xiii) the Class 1-M-8 Certificates, (xiv) the Class 1-B
Certificates, (xv) the Class 1-C Certificates, (xvi) the
Class 2-C Certificates, (xvii) the Class 1-P Certificates,
(xviii) the Class 2-P Certificates, and (xix) the Class R
Certificates.]
REMIC 1
As provided herein, the
Trustee will elect to treat the segregated pool of assets
consisting of Loan Group 1 and certain other related assets (other
than the Group 1 Net WAC Shortfall Reserve Fund, any related
Servicer Prepayment Charge Payment Amounts, the Class M Interest
Reserve Fund and, for the avoidance of doubt, the Group 1
Supplemental Interest Trust, the Group 1 Derivative Account, the
Group 1 Interest Rate Swap Agreement, the Group 1 Cap Contracts and
the Group 1 Collateral Account) subject to this Agreement as a
REMIC for federal income tax purposes, and such segregated pool of
assets will be designated as “REMIC 1.” The Class R-1
Interest will be the sole class of Residual Interests in REMIC 1
for purposes of the REMIC Provisions (as defined herein). The
following table irrevocably sets forth the designation, the
Uncertificated REMIC 1 Pass-Through Rate, the initial
Uncertificated Principal Balance and, for purposes of satisfying
Treasury Regulation Section 1.860G-1(a)(4)(iii), the
“latest possible maturity date” for each of the REMIC 1
Regular Interests (as defined herein). None of the REMIC 1 Regular
Interests will be certificated.
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Designation
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Uncertificated
REMIC 1
Pass-Through
Rate
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Initial
Uncertificated
Principal
Balance
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Latest
Possible
Maturity Date
(1)
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Designation
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Uncertificated
REMIC 1
Pass-Through
Rate
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Initial
Uncertificated
Principal
Balance
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Latest
Possible
Maturity Date
(1)
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2
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Designation
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Uncertificated
REMIC 1
Pass-Through
Rate
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Initial
Uncertificated
Principal
Balance
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Latest
Possible
Maturity Date
(1)
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3
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Designation
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Uncertificated
REMIC 1
Pass-Through
Rate
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Initial
Uncertificated
Principal
Balance
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Latest
Possible
Maturity Date
(1)
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4
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Designation
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Uncertificated
REMIC 1
Pass-Through
Rate
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Initial
Uncertificated
Principal
Balance
|
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Latest
Possible
Maturity Date
(1)
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| (1) |
For purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury regulations, the Distribution Date in the month following
the maturity date for the Mortgage Loan in Loan Group 1 with the
latest possible maturity date has been designated as the
“latest possible maturity date” for each REMIC 1
Regular Interest. |
| (2) |
Calculated in accordance with the definition of
“Uncertificated REMIC 1 Pass-Through Rate” in this
Agreement. |
REMIC 2
As provided herein, the
Trustee will elect to treat the segregated pool of assets
consisting of Loan Group 2 and certain other related assets (other
than the Group 2 Net WAC Shortfall Reserve Fund, any related
Servicer Prepayment Charge Payment Amounts and, for the avoidance
of doubt, the Group 2 Supplemental Interest Trust, the Group 2
Derivative Account, the Group 2 Interest Rate Swap Agreement, the
Group 2 Cap Contract and the Group 2 Collateral Account) subject to
this Agreement as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as “REMIC
2.” The Class R-2 Interest will be the sole class of Residual
Interests in REMIC 2 for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the
Uncertificated REMIC 2 Pass-Through Rate, the initial
Uncertificated Principal Balance and, for purposes of satisfying
Treasury Regulation Section 1.860G-1(a)(4)(iii), the
“latest possible maturity date” for each of the REMIC 2
Regular Interests (as defined herein). None of the REMIC 2 Regular
Interests will be certificated.
5
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Designation
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Uncertificated
REMIC 2
Pass-Through
Rate
|
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Initial
Uncertificated
Principal
Balance
|
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Latest
Possible
Maturity Date
(1)
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6
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Designation
|
|
Uncertificated
REMIC 2
Pass-Through
Rate
|
|
Initial
Uncertificated
Principal
Balance
|
|
Latest
Possible
Maturity Date
(1)
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7
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Designation
|
|
Uncertificated
REMIC 2
Pass-Through
Rate
|
|
Initial
Uncertificated
Principal
Balance
|
|
Latest
Possible
Maturity Date
(1)
|
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8
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|
Designation
|
|
Uncertificated
REMIC 2
Pass-Through
Rate
|
|
Initial
Uncertificated
Principal
Balance
|
|
Latest
Possible
Maturity Date
(1 )
|
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[
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[ ]
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9
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Designation
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Uncertificated
REMIC 2
Pass-Through
Rate
|
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Initial
Uncertificated
Principal
Balance
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Latest
Possible
Maturity Date
(1)
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| (1) |
For purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury regulations, the Distribution Date in the month following
the maturity date for the Mortgage Loan in Loan Group 2 with the
latest possible maturity date has been designated as the
“latest possible maturity date” for each REMIC 2
Regular Interest. |
| (2) |
Calculated in accordance with the definition of
“Uncertificated REMIC 2 Pass-Through Rate” in this
Agreement. |
REMIC 3
As provided in this
Agreement, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular
Interests and the REMIC 2 Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be
designated as “REMIC 3”. The Class R-3 Interest will
represent the sole class of Residual Interests in REMIC 3 for
purposes of the REMIC Provisions. The following table irrevocably
sets forth the designation, the Uncertificated REMIC 3 Pass-Through
Rate, the initial Uncertificated Principal Balance and, for
purposes of satisfying Treasury Regulation
Section 1.860G-1(a)(4)(iii), the “latest possible
maturity date” for each of the REMIC 3 Regular Interests (as
defined herein). None of the REMIC 3 Regular Interests will be
certificated.
|
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Designation
|
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Uncertificated
REMIC 3
Pass-Through
Rate
|
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Initial
Uncertificated
Principal
Balance
|
|
Latest
Possible
Maturity Date
(1)
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10
| (1) |
For purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury regulations, the Distribution Date immediately following
the maturity date for the Mortgage Loan in Loan Group 1 with the
latest maturity date has been designated as the “latest
possible maturity date” for each REMIC 3 Group 1 Regular
Interest (as defined herein), and the Distribution Date immediately
following the maturity date for the Mortgage Loan in Loan Group 2
with the latest maturity date has been designated as the
“latest possible maturity date” for each REMIC 3 Group
2 Regular Interest (as defined herein). |
| (2) |
Calculated in accordance with the definition of
“Uncertificated REMIC 3 Pass-Through Rate” in this
Agreement. |
| (3) |
REMIC 3 Regular Interest 1-IO and REMIC 3 Regular Interest 2-IO
will not have Uncertificated Principal Balances but will accrue
interest on their respective uncertificated notional amounts
calculated in accordance with the related definition of
“Uncertificated Notional Amount” herein. |
REMIC 4
As provided in this
Agreement, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC 4 Regular
Interests as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as “REMIC
4”. The Class R-4 Interest will represent the sole class of
Residual Interests in REMIC 4 for purposes of the REMIC
Provisions.
The following table
irrevocably sets forth the designation, the Pass-Through Rate, the
Initial Certificate Principal Balance and, for purposes of
satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii),
the “latest possible maturity date” for each class of
Certificates and interests that represents ownership of one or more
of the Regular Interests in REMIC 4 created hereunder.
Each Certificate, other than
the Class R Certificates, represents ownership of a Regular
Interest in REMIC 4 and also represents (i) the right to
receive, or the obligation to make, as described herein, payments
with respect to the related Net WAC Shortfall Amount (as defined
herein) and (ii) the obligation to pay, or the right to
receive, as described herein, related Class IO Distribution Amounts
(as defined herein). The entitlement to principal of the Regular
Interest which corresponds to each Certificate shall be equal in
amount and timing to the entitlement to principal of such
Certificate.
11
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Class
Designation
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Initial
Certificate
Principal
Balance
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Pass-Through
Rate
|
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Assumed
Final
Maturity Date
(1)
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| (1) |
For purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury regulations, the Distribution Date in the month following
the maturity date for the Mortgage Loan in Loan Group 1 with the
latest maturity date has been designated as the “latest
possible maturity date” for each Regular Interest in REMIC 4
the ownership of which is represented by the Class 1-A, Class 1-M,
Class 1-B, Class 1-C and Class 1-P Certificates and the Class 1-IO
Interest, and the Distribution Date in the month following the
maturity date for the Mortgage Loan in Loan Group 2 with the latest
maturity date has been designated as the “latest possible
maturity date” for each Regular Interest in REMIC 4 the
ownership of which is represented by the Class 2-A, Class 2-C and
Class 2-P Certificates and the Class 2-IO Interest. |
| (2) |
This Class of Certificates represents ownership of a Regular
Interest in REMIC 4. Any amount distributed on this Class of
Certificates on any Distribution Date in excess of the amount
distributable on the related Regular Interest in REMIC 4 on such
Distribution Date shall be treated for federal income tax purposes
as having been paid from the related Net WAC Shortfall Reserve Fund
or the related Supplemental Interest Trust, as applicable, and any
amount distributable on the related Regular Interest in REMIC 4 on
such Distribution Date in excess of the amount distributable on
such Class of Certificates on such Distribution Date shall be
treated for such purposes as having been distributed to the Holders
of such Certificates and then paid by such Holders to the related
Supplemental Interest Trust, all pursuant to and as further
provided in Section 4.10 and Section 4.11
hereof. |
| (3) |
Calculated in accordance with the definition of
“Pass-Through Rate” in this Agreement. Each Regular
Interest in REMIC 4 which corresponds to a Class 1-A, Class 2-A,
Class 1-B or Class 1-M Certificate will have the same Pass-Through
Rate as such Certificate, except with respect to the related Net
WAC Rate. The Net WAC Rate for each such Regular Interest in REMIC
4 and Certificate is specified in the related definition of
“Net WAC Rate .” |
| (4) |
The Class 1-C Certificates and Class 2-C Certificates will
accrue interest at their variable Pass-Through Rates on their
Notional Balances outstanding from time to time, which shall equal
the aggregate Uncertificated Principal Balances of the REMIC 3
Group 1 Regular Interests (other than REMIC 3 Regular Interest 1-P)
or the REMIC 3 Group 2 Regular Interests (other than REMIC 3
Regular Interest 2-P), respectively. The Class C Certificates will
not accrue interest on their Certificate Principal
Balances. |
12
| (5) |
The Class 1-P Certificates and Class 2-P Certificates do not
accrue interest. |
| (6) |
For federal income tax purposes, the Class 1-IO Interest and
Class 2-IO Interest will not have Uncertificated Principal
Balances, but will have notional amounts equal to the
Uncertificated Notional Amounts of REMIC 3 Regular Interest 1-IO
and REMIC 3 Regular Interest 2-IO, respectively. |
| (7) |
For federal income tax purposes, the Class 1-IO Interest and
Class 2-IO Interest will not have Pass-Through Rates, but will be
entitled to 100% of the amounts distributed on REMIC 3 Regular
Interest 1-IO and REMIC 3 Regular Interest 2-IO,
respectively. |
13
ARTICLE I
DEFINITIONS
Section 1.01. Defined
Terms.
Whenever used in this
Agreement, the following words and phrases, unless the context
otherwise requires, shall have the meanings specified in this
Article. Unless otherwise specified, all calculations in respect of
interest on the Class A, Class M and Class B Certificates
shall accrue on the basis of a 360-day year and the actual number
of days in the related Accrual Period. All calculations of interest
on the Class C Certificates will be made on the basis of a 360-day
year consisting of twelve 30-day months. The Class 1-P, Class 2-P
and Class R Certificates do not accrue interest.
“Accepted Servicing
Practices”: The Servicer’s normal servicing practices,
which in general will conform to the mortgage servicing practices
of prudent mortgage lending institutions which service, for their
own account, mortgage loans of the same type as the Mortgage Loans
in the jurisdictions in which the related Mortgaged Properties are
located.
“Accrual Period”:
With respect to each Class of Certificates (other than the Class C,
Class P and Class R Certificates) and the Distribution Date in [
] the period commencing on the Closing Date and ending on the day
preceding the Distribution Date in [
] and (ii) with respect to any Distribution Date after the
Distribution Date in [
] the period commencing on the Distribution Date in the month
immediately preceding the month in which such Distribution Date
occurs and ending on the day preceding such Distribution Date. With
respect to the Class C Certificates and any Distribution Date, the
calendar month immediately preceding such Distribution
Date.
“Adjustment
Date”: As to each adjustable-rate Mortgage Loan, each date
set forth in the related Mortgage Note on which an adjustment to
the interest rate on such Mortgage Loan becomes
effective.
“Advance”: As to
any Mortgage Loan, any advance made by the Servicer on any
Distribution Date pursuant to Section 3.18.
“Affected Party”:
As defined in the related Interest Rate Swap Agreement.
“Affiliate”: With
respect to any Person, any other Person controlling, controlled by
or under common control with such Person. For purposes of this
definition, “control” means the power to direct the
management and policies of a Person, directly or indirectly,
whether through ownership of voting securities, by contract or
otherwise and “controlling” and
“controlled” shall have meanings correlative to the
foregoing.
“Aggregate Stated
Principal Balance”: As of any date of determination, the
aggregate Stated Principal Balance of the Mortgage
Loans.
14
“Agreement”: This
Pooling and Servicing Agreement and all amendments
hereof.
“Allocated Realized
Loss Amount”: With respect to any Class of Offered
Certificates and the Class 1-B Certificates and any Distribution
Date, an amount equal to the sum of any Realized Loss allocated to
that Class of Certificates on that Distribution Date (other than,
with respect to the [
] Certificates, a Realized Loss which was covered by the
Certificate Guaranty Insurance Policy) and any Allocated Realized
Loss Amount for that Class remaining unpaid from any previous
Distribution Date, minus any Subsequent Recoveries applied to such
Allocated Realized Loss Amount.
“Assessment of
Compliance” As defined in Section 3.10.
“Assignment”: An
assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form, 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.
“Attestation
Report”: As defined in Section 3.10.
“Available Distribution
Amount”: With respect to any Distribution Date and any Loan
Group, an amount equal to the amount received by the Trustee and
available in the Certificate Account on that Distribution Date. The
Available Distribution Amount will generally be equal to
(i) the sum of (1) the aggregate amount of scheduled
payments on the related Mortgage Loans received or advanced that
were due during the related Due Period and (2) any unscheduled
payments and receipts, including mortgagor prepayments on such
Mortgage Loans, Insurance Proceeds, Liquidation Proceeds and
Subsequent Recoveries, received during the related Prepayment
Period, minus (ii) (A) amounts reimbursable therefrom to
the Trustee and the Servicer, Servicing Fees, the Policy Premium
payable to the Certificate Insurer, any amounts needed to reimburse
the Servicer for amounts due under and this Agreement to the extent
such amounts have not been retained by, or paid previously to the
Servicer, and (B) amounts payable to the related Supplemental
Interest Trust in respect of related Net Swap Payments and related
Swap Termination Payments other than Swap Termination Payments
payable to the related Swap Provider resulting from a Swap Provider
Trigger Event.
“AVM Mortgage
Loan”: A Mortgage Loan which was originated using an
automated valuation model to provide an estimate of value for a
specific property in lieu of a standard appraisal in accordance
with the Sponsor’s Underwriting Guidelines in effect at the
time of origination.
“Bankruptcy
Code”: The Bankruptcy Code of 1978, as amended.
“Basic Principal
Distribution Amount”: With respect to any Distribution Date
and any Loan Group, the excess of (i) the related Principal
Remittance Amount for such Distribution Date over (ii) the
related Overcollateralization Release Amount, if any, for such
Distribution Date.
“Book-Entry
Certificate”: Each class of the Offered Certificates for so
long as they are issued, maintained and transferred at the
Depository.
15
“Business Day”:
Any day other than a Saturday, a Sunday or a day on which banking
institutions in California or New York (and such other state or
states in which the Collection Account or the Certificate Account
are at the time located) or in the city in which the Corporate
Trust Office of the Trustee is located are authorized or obligated
by law or executive order to close.
“Cap Contracts”:
The Group 1 Cap Contracts or Group 2 Cap Contract, as
applicable.
“Cap
Counterparties”: The Group 1 Cap Counterparty or Group 2 Cap
Counterparty, as applicable.
“Cash
Liquidation”: As to any defaulted Mortgage Loan other than a
Mortgage Loan as to which an REO Acquisition occurred, a
determination by the Servicer that it has received all Insurance
Proceeds, Liquidation Proceeds and other payments or cash
recoveries which the Servicer reasonably and in good faith expects
to be finally recoverable with respect to such Mortgage
Loan.
“Certificate”:
Any Regular Certificate or Class R Certificate.
“Certificate
Account”: The trust account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled
[TRUSTEE], in trust for registered holders of [
], Mortgage Pass-Through Certificates, Series [
], and which account or accounts must each be an Eligible
Account.
“Certificate Account
Deposit Date”: With respect to any Distribution Date, the
Business Day immediately preceding such Distribution
Date.
“Certificateholder” or “Holder”: The
Person in whose name a Certificate is registered in the Certificate
Register, except that only a Permitted Transferee shall 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, the Sponsor,
the Trustee, or the Servicer or any affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which such
Certificate is entitled shall not be taken into account in
determining whether the requisite percentage of Voting Rights
necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee shall be
entitled to rely upon a certification of the Depositor or the
Servicer in determining if any Certificates are registered in the
name of the respective affiliate. All references in this Agreement
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 in this Agreement;
provided , however , that the Trustee shall be
required to recognize as a “Holder” or
“Certificateholder” only the Person in whose name a
Certificate is registered in the Certificate Register.
“Certificate Guaranty
Insurance Policy”: The certificate guaranty insurance policy
issued by the Certificate Insurer for the benefit of the [
] Certificateholders.
“Certificate
Insurer”: [
], a [
] domiciled stock insurance corporation, or any successor thereto
as provided in the Agreement.
16
“Certificate
Margin” The Certificate Margin for the Offered Certificates
and Class 1-B Certificates, and for purposes of the definition of
“Group 1 Marker Rate”, “Group 2 Marker
Rate”, “Group 1 Maximum Uncertificated Accrued Interest
Deferral Amount”, or “Group 2 Maximum Uncertificated
Accrued Interest Deferral Amount”, each REMIC 3 Regular
Interest for which such Certificates are Corresponding
Certificates, shall be:
Certificate
Margin
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Class
|
|
(1) |
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(2) |
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[ ]
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[ |
]% |
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[ |
]% |
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[ ]
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[ |
]% |
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[ |
]% |
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[ ]
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[ |
]% |
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[ |
]% |
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[ ]
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[ |
]% |
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[ |
]% |
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[ ]
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[ |
]% |
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[ |
]% |
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[ ]
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[ |
]% |
|
[ |
]% |
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[ ]
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[ |
]% |
|
[ |
]% |
|
[ ]
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[ |
]% |
|
[ |
]% |
|
[ ]
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[ |
]% |
|
[ |
]% |
|
[ ]
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[ |
]% |
|
[ |
]% |
|
[ ]
|
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[ |
]% |
|
[ |
]% |
|
[ ]
|
|
[ |
]% |
|
[ |
]% |
|
[ ]
|
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[ |
]% |
|
[ |
]% |
|
[ ]
|
|
[ |
]% |
|
[ |
]% |
| (1) |
Prior to the related Step-Up Date. |
| (2) |
On and after the related Step-Up 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 an indirect participating brokerage firm for which a
Depository Participant acts as agent, if any, and otherwise on the
books of a Depository Participant, if any, and otherwise on the
books of the Depository.
“Certificate Principal
Balance”: With respect to any Certificate (other than the
Class 1-C, Class 2-C and Class R Certificates) as of any date of
determination, the Initial Certificate Principal Balance thereof,
increased by any Subsequent Recoveries allocated thereto, and
reduced by the aggregate of (a) all amounts allocable to
principal previously distributed with respect to such Certificate
and (b) any reductions in the Certificate Principal Balance
thereof deemed to have occurred in connection with allocations of
Realized Losses in the manner described herein. With respect to the
Class 1-C Certificates as of any date of determination, an amount
equal to the excess, if any, of (A) the then aggregate
Uncertificated Principal Balance of the REMIC 3 Group 1 Regular
Interests, over (B) the then aggregate Certificate Principal
Balance of the Class 1-A, Class 1-M, Class 1-B and Class 1-P
Certificates then outstanding. With respect to the Class 2-C
Certificates as of any date of determination, an amount equal to
the
17
excess, if any, of (A) the then
aggregate Uncertificated Principal Balance of the REMIC 3 Group 2
Regular Interests, over (B) the then aggregate Certificate
Principal Balance of the Class 2-A Certificates and Class 2-P
Certificates then outstanding.
“Certificate
Register”: The register maintained pursuant to
Section 5.02.
“Class”:
Collectively, all of the Certificates bearing the same
designation.
“Class 1-A
Certificates”:
[
].
“Class 1-A Principal
Distribution Amount”: For any Distribution Date will equal
the excess of (1) the aggregate Certificate Principal Balance
of the Class 1-A Certificates immediately prior to such
Distribution Date, over (2) the lesser of
(x) [ ]% of the aggregate Stated
Principal Balance of the Group 1 Loans for such Distribution Date
after giving effect to distributions to be made on that
Distribution Date and (y) the aggregate Stated Principal
Balance of the Group 1 Loans for such Distribution Date after
giving effect to distributions to be made on that Distribution Date
minus the Group 1 Overcollateralization Floor.
“Class 1-A1
Certificates”:
[
].
“Class 1-C Distribution
Amount”: With respect to any Distribution Date, the sum of
(i) the Monthly Interest Distributable Amount for the Class
1-C Certificates for such Distribution Date, (ii) any Group 1
Overcollateralization Release Amount for such Distribution Date and
(iii) without duplication, any Subsequent Recoveries related
to Loan Group 1 not distributed to the Class 1-A, Class 1-M and
Class 1-B Certificates on such Distribution Date; provided, however
that on any Distribution Date after the Distribution Date on which
the Certificate Principal Balances of the Class 1-A, Class 1-M,
Class 1-B and Class 1-P Certificates have been reduced to zero, the
Class 1-C Distribution Amount shall include the Group 1
Overcollateralization Amount.
“Class 1-IO
Interest”: An uncertificated interest in the Trust Fund held
by the Trustee on behalf of the Supplemental Interest Trust,
evidencing a Regular Interest in REMIC 4 for purposes of the REMIC
Provisions.
“Class 1-M
Certificates”:
[
].
“Class 2-A Principal
Distribution Amount”: For any Distribution Date will equal
the excess of (1) the Certificate Principal Balance of the
Class 2-A Certificates immediately prior to such Distribution Date,
over (2) the lesser of (x) [ ]% of
the aggregate Stated Principal Balance of the Group 2 Loans for
such Distribution Date after giving effect to distributions to be
made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Group 2 Loans for such Distribution Date
after giving effect to distributions to be made on that
Distribution Date minus the Group 2 Overcollateralization
Floor.
“Class 2-C Distribution
Amount”: With respect to any Distribution Date, the sum of
(i) the Monthly Interest Distributable Amount for the Class
2-C Certificates for such Distribution Date, (ii) any Group 2
Overcollateralization Release Amount for such Distribution Date and
(iii) without duplication, any Subsequent Recoveries related
to Loan Group 2 not distributed to the
18
Class 2-A Certificates on such
Distribution Date; provided, however that on any Distribution Date
after the Distribution Date on which the Certificate Principal
Balances of the Class 2-A Certificates and Class 2-P Certificates
have been reduced to zero, the Class 2-C Distribution Amount shall
include the Group 2 Overcollateralization Amount.
“Class 2-IO
Interest”: An uncertificated interest in the Trust Fund held
by the Trustee on behalf of the Supplemental Interest Trust,
evidencing a Regular Interest in REMIC 4 for purposes of the REMIC
Provisions.
“Class A
Certificates”: [
].
“Class C Certificates
”: [
].
“Class IO
Interests”: [
].
“Class IO Distribution
Amount”: Any of the Group 1 Class IO Distribution Amount or
the Group 2 Class IO Distribution Amount.
“Class 1-M-4 Interest
Reserve Fund Amount”: The amount deposited in the Class M
Interest Reserve Fund on the Closing Date by the Depositor to cover
Net WAC Shortfall Amounts on the Class 1-M-4 Certificates, reduced
by any distributions to the Class 1-M-4 Certificates pursuant to
Section 4.15 on previous Distribution Dates. Initially, $ [
].
“Class 1-M-5 Interest
Reserve Fund Amount”: The amount deposited in the Class M
Interest Reserve Fund on the Closing Date by the Depositor to cover
Net WAC Shortfall Amounts on the Class 1-M-5 Certificates, reduced
by any distributions to the Class 1-M-5 Certificates pursuant to
Section 4.15 on previous Distribution Dates. Initially, $ [
].
“Class 1-M-6 Interest
Reserve Fund Amount”: The amount deposited in the Class M
Interest Reserve Fund on the Closing Date by the Depositor to cover
Net WAC Shortfall Amounts on the Class 1-M-6 Certificates, reduced
by any distributions to the Class 1-M-6 Certificates pursuant to
Section 4.15 on previous Distribution Dates. Initially, $ [
].
“Class 1-M-7 Interest
Reserve Fund Amount”: The amount deposited in the Class M
Interest Reserve Fund on the Closing Date by the Depositor to cover
Net WAC Shortfall Amounts on the Class 1-M-7 Certificates, reduced
by any distributions to the Class 1-M-7 Certificates pursuant to
Section 4.15 on previous Distribution Dates. Initially, $ [
].
“Class M Interest
Reserve Fund”: A reserve fund to cover Net WAC Shortfall
Amounts on the Class 1-M-4, Class 1-M-5, Class 1-M-6 and Class
1-M-7 Certificates as described in Section 4.15.
“Class P Certificates
”: [
].
“Class R
Certificate”: Any one of the Class R Certificates as
designated on the face thereof substantially in the form annexed
hereto as Exhibit B-4, evidencing the ownership of the Class R-1
Interest, Class R-2 Interest, Class R-3 Interest and Class R-4
Interest.
19
“Class R-1
Interest”: The uncertificated Residual Interest in REMIC
1.
“Class R-2
Interest”: The uncertificated Residual Interest in REMIC
2.
“Class R-3
Interest”: The uncertificated Residual Interest in REMIC
3.
“Class R-4
Interest”: The uncertificated Residual Interest in REMIC
4.
“Closing Date”:
[ ].
“Code”: The
Internal Revenue Code of 1986.
“Collateral
Accounts”: Any of the Group 1 Collateral Account or the Group
2 Collateral Account.
“Collateral
Value”: The appraised value of a Mortgaged Property based
upon the lesser of (i) the appraisal (as reviewed and approved
by the Sponsor) made at the time of the origination of the related
Mortgage Loan, or (ii) the sales price of such Mortgaged
Property at such time of origination. With respect to a Mortgage
Loan the proceeds of which were used to refinance an existing
mortgage loan, the appraised value of the Mortgaged Property based
upon the appraisal (as reviewed and approved by the Sponsor)
obtained at the time of refinancing.
“Collection
Account”: The Eligible Account established and maintained by
the Servicer pursuant to Section 3.02.
“Commission”: The
Securities and Exchange Commission.
“Compensating
Interest”: With respect to any Distribution Date, any
payments made by the Servicer from its own funds to cover
Prepayment Interest Shortfalls, which shall be equal to the lesser
of (x) the sum of the related Servicing Fees for the related
Distribution Date, and (y) the related Prepayment Interest
Shortfall for such Distribution Date.
“Corporate Trust
Office”: The principal corporate trust office of the Trustee
at which at any particular time its corporate trust business
related to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at
[ ]
Series
[ ]
([ ]).
“Corresponding
Certificate”: With respect to each REMIC 3 Regular Interest
(other than REMIC 3 Regular Interests 1-AA, 2-AA, 1-ZZ, 2-ZZ, 1-IO
and 2-IO), the Certificate with the corresponding designation. With
respect to each REMIC 4 Regular Interest (other than the Class IO
Interests), the related Certificate representing an ownership
therein.
“Credit Enhancement
Percentage”: For any Distribution Date and any Loan Group
after the related Stepdown Date is the percentage equivalent of a
fraction, the numerator of which is equal to (a) the excess of
(i) the Aggregate Stated Principal Balance of the related
Mortgage Loans for such Distribution Date (after giving effect to
scheduled payments of principal due during the related Due Period,
to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) over
(ii) (1) before the aggregate
20
Certificate Principal Balance of the
related Class A Certificates have been reduced to zero, the
aggregate Certificate Principal Balance of the related Class A
Certificates, (after taking into account distribution of the
related Principal Distribution Amount for such Distribution Date)
or (2) after such time, the Certificate Principal Balance of
the most senior class of related Subordinate Certificates
outstanding (after taking into account distribution of the related
Principal Distribution Amount for such distribution date), and the
denominator of which is equal to (b) the Aggregate Stated
Principal Balance of the related Mortgage Loans for such
Distribution Date (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received
during the related Prepayment Period).
“Credit Support Annex
One”: The credit support annex, dated as of
[ ],
between the Group 1 Supplemental Interest Trust Trustee and
[CAP/SWAP COUNTERPARTY], which is annexed to and forms part of the
Group 1 Swap Agreement.
“Credit Support Annex
Two”: The credit support annex, dated as of
[ ],
between the Group 2 Supplemental Interest Trust Trustee and
[CAP/SWAP COUNTERPARTY], which is annex to and forms part of the
Group 2 Swap Agreement.
“Credit Support Annex
Three”: The credit support annex, dated as of
[ ],
between the Group 1 Supplemental Interest Trust Trustee and
[CAP/SWAP COUNTERPARTY], which is annexed to and forms part of the
Group 1 Cap I Contract.
“Credit Support Annex
Four”: The credit support annex, dated as of
[ ],
between the Group 1 Supplemental Interest Trust Trustee and
[CAP/SWAP COUNTERPARTY], which is annexed to and forms part of the
Group 1 Cap II Contract.
“Credit Support Annex
Five”: The credit support annex, dated as of
[ ],
between the Group 2 Supplemental Interest Trust Trustee and
[CAP/SWAP COUNTERPARTY], which is annexed to and forms part of the
Group 2 Cap Contract.
“Cross Collateralized
Loss Payments”: For any distribution date and each Loan
Group, the amount, if any, of Crossable Excess from such Loan Group
available to cover Crossable Losses in the other Loan Group as
provided in Sections 4.01(l)(vi) and (m)(v).
“Crossable
Excess”: With respect to Loan Group 1 and Loan Group 2 and
any Distribution Date, an amount equal to the related Net Monthly
Excess Cashflow remaining after distributions made pursuant to
Sections 4.01(l)(v) and (m)(iv), respectively.
“Crossable
Losses”: With respect to either Loan Group and any
Distribution Date, an amount equal to any Realized Losses suffered
by any Mortgage Loan in such Loan Group, to the extent that such
Realized Losses have not been covered by related Net Monthly Excess
Cashflow on such Distribution Date, and any previously unreimbursed
Realized Losses suffered by any Mortgage Loans in such Loan Group
to the extent such Realized Losses have not been covered by related
and non-related Net Monthly Excess Cashflow on prior Distribution
Dates.
“Current Report The
Current Report pursuant to Section 13 or 15(d) of the Exchange
Act.
21
“Curtailment”:
Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
“Custodian”:
[TRUSTEE].
“Cut-off Date”:
With respect to the Mortgage Loans,
[ ].
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.
“Cut-off Date
Balance”: Any of the Group 1 Cut-off Date Balance or Group 2
Cut-off Date Balance, as applicable.
“Defaulted Mortgage
Loan” means any Mortgage Loan as to which the Mortgagor has
failed to make unexcused three or more consecutive scheduled
Monthly Payments.
“Defaulting
Party”: As defined in the Interest Rate Swap
Agreement.
“Deficiency
Amount”: As applied to the
[ ]
Certificates, (A) with respect to each Distribution Date prior
to the related Final Scheduled Distribution Date, an amount equal
to the sum of (i) the excess, if any, of (a) the
aggregate amount of the Monthly Interest Distributable Amount on
the
[ ]
Certificates for that Distribution Date over (b) the funds
available to make payment thereof pursuant to Article IV of this
Agreement for that Distribution Date and (ii) the amount of
any Realized Losses allocated to the
[ ]
Certificates for such Distribution Date; and (B) with respect
to the related Final Scheduled Distribution Date and the
[ ]
Certificates, [as the case may be,] an amount equal to the sum of
(i) the excess, if any, of (a) the amount of the Monthly
Interest Distributable Amount on the
[ ]
Certificates for the related Final Scheduled Distribution Date over
(b) the funds available to make payment thereof pursuant to
Article IV of this Agreement for the related Final Scheduled
Distribution Date and (ii) the outstanding Certificate
Principal Balance of the
[ ]
Certificates due on the related Final Scheduled Distribution Date
to the extent not paid from the related Available Distribution
Amount on the related Final Scheduled Distribution Date. Any
Deficiency Amount shall not include any Prepayment Interest
Shortfalls, any Relief Act Shortfalls or any Net WAC Shortfall
Amounts.
“Deficient
Valuation”: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under the
Mortgage Loan, or any reduction in the amount of principal to be
paid in connection with any scheduled Monthly Payment that
constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy
Code.
“Definitive
Certificate”: Any definitive, fully registered
Certificate.
“Deleted Mortgage
Loan”: A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
“Delinquent”: A
Mortgage Loan is “delinquent” if any payment due
thereon is not made by the close of business on the day such
payment is scheduled to be due. A Mortgage Loan is
22
“30 days delinquent” if such
payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in
which such payment was due, or, if there is no such corresponding
day ( e.g ., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on
the last day of such immediately succeeding month. Similarly for
“60 days delinquent,” “90 days delinquent”
and so on.
“Depositor”
[ ],
or its successor in interest.
“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(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 Securities Exchange
Act of 1934, as amended.
“Depository
Participant”: A broker, dealer, bank or other financial
institutions or other Person for whom from time to time a
Depository effects book-entry transfers and pledges of securities
deposited with the Depository.
“Derivative
Account”: The Group 1 Derivative Account or Group 2
Derivative Account, as applicable.
“Determination
Date”: With respect to any Distribution Date, the 15th day of
the month in which such Distribution Date occurs or, if such day is
not a Business Day, on the immediately preceding Business
Day.
“Disqualified
Organization”: Any organization defined as a
“disqualified organization” under
Section 860E(e)(5) of the Code, which includes 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 the Freddie Mac, a majority of its
board of directors is not selected by such governmental unit),
(ii) a 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
and (v) any other Person so designated by the Trustee based
upon an Opinion of Counsel that the holding of an Ownership
Interest in a Class R Certificate by such Person may cause REMIC 1,
REMIC 2, REMIC 3 or REMIC 4 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 Class R 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.
23
“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
[ ].
“Distribution
Report” The Asset-Backed Issuer Distribution Report pursuant
to Section 13 or 15(d) of the Exchange Act.
“Due Date”: With
respect to each Mortgage Loan, the first day of the month of the
related Distribution Date.
“Due Period”:
With respect to any Distribution Date, the period commencing on the
second day of the month preceding the month of such Distribution
Date (or, with respect to the first Due Period, the day following
the Cut-off Date) and ending on the first day of the month in which
such Distribution Date occurs.
“Eligible
Account”: Any of (i) a segregated account maintained
with a federal or state chartered depository institution
(A) the short-term obligations of which are rated [A-1+] or
better by Standard & Poor’s and [P-1] by
Moody’s at the time of any deposit therein or if such account
is maintained with PNC Bank, National Association, rated no less
than [A-1] by Standard & Poor’s and no less than
[P-1] by Moody’s or (B) insured by the FDIC (to the
limits established by such Corporation), the uninsured deposits in
which account are otherwise secured such that, as evidenced by an
Opinion of Counsel (obtained by the Person requesting that the
account be held pursuant to this clause (ii)) delivered to the
Trustee prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in
such account and a perfected first priority security interest
against any collateral (which shall be limited to Permitted
Investments, each of which shall mature not later than the Business
Day immediately preceding the Distribution Date next following the
date of investment in such collateral or the Distribution Date if
such Permitted Investment is an obligation of the institution that
maintains the Certificate Account, Insurance Account or Collection
Account) securing such funds that is superior to claims of any
other depositors or general creditors of the depository institution
with which such account is maintained, (ii) a segregated trust
account or accounts maintained with a federal or state chartered
depository institution or trust company subject to regulations
regarding fiduciary funds on deposit similar to Title 12 of the
Code of Federal Regulations Section 9.10(b), which, in either
case, has corporate trust powers, acting in its fiduciary capacity
or (iii) a segregated account or accounts of a depository
institution acceptable to the Rating Agencies (as evidenced in
writing by the Rating Agencies that use of any such account as the
Collection Account or the Certificate Account will not have an
adverse effect on the then-current ratings assigned to the Classes
of the Certificates then rated by the Rating Agencies). Eligible
Accounts may bear interest.
“Estimated Swap
Termination Payment”: As defined in the Interest Rate Swap
Agreement.
“Event of
Default”: One or more of the events described in
Section 7.01.
“Excess
Proceeds”: As defined in Section 3.22.
“Exchange Act”:
The Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
24
“Extra Principal
Distribution Amount”: With respect to any Distribution Date
and Loan Group, the lesser of (x) the related
Overcollateralization Deficiency Amount for such Distribution Date
and (y) the sum of (1) the related Net Monthly Excess
Cashflow Amount for such Distribution Date and (2) amounts
available from the related Supplemental Interest Trust to pay
principal as provided in Section 4.01(n)(iii) and 4.01(o)(ii),
as applicable, hereof.
“Fannie Mae”
Fannie Mae (formerly, Federal National Mortgage Association) or any
successor thereto.
“FDIC”: Federal
Deposit Insurance Corporation or any successor.
“Final Scheduled
Distribution Date”: With respect to the Group 1 Certificates,
the Distribution Date occurring in [ ]. With
respect to the Class 2-A Certificates, the Distribution Date
occurring in [ ].
“Freddie Mac”:
Federal Home Loan Mortgage Corporation or any successor.
“Gross Margin”:
With respect to any Mortgage Loan, the percentage set forth as the
“Gross Margin” for such Mortgage Loan on the Mortgage
Loan Schedule, as adjusted from time to time in accordance with the
terms of this Agreement.
“Group 1 Cap
Contracts”: The interest rate cap agreements, dated as of [
], between the Group 1 Cap Counterparty and Group 1 Supplemental
Interest Trust Trustee, including any schedule, confirmations,
credit support annex or other credit support document relating
thereto.
“Group 1 Cap
Counterparty”: The cap provider under the Group 1 Cap
Contracts. Initially, the Group 1 Cap Counterparty shall be
[CAP/SWAP COUNTERPARTY]
“Group 1
Certificates”:
[
].
“Group 1 Class IO
Distribution Amount”: As defined in Section 4.10 hereof.
For purposes of clarity, the Group 1 Class IO Distribution Amount
for any Distribution Date shall equal the amount payable to the
Group I Supplemental Interest Trust with respect to the Group 1
Interest Rate Swap Agreement pursuant to the first and second
sentences of Section 4.01(a) (sixth paragraph) on such
Distribution Date in excess of the amount payable on the Class 1-IO
Interest on such Distribution Date, all as further provided in
Section 4.10 hereof.
“Group 1 Collateral
Account”: Shall mean the segregated trust account created and
maintained by the Group 1 Custodian pursuant to
Section 4.14(i) hereof.
“Group 1 Credit Support
Annexes”: Each of Credit Support Annex One, Credit Support
Annex Three, and Credit Support Annex Four.
“Group 1
Custodian”: As defined in Section 4.14(i).
“Group 1 Cut-off Date
Balance”: With respect to any Mortgage Loan in Loan Group 1,
the Stated Principal Balance thereof as of the Cut-off
Date.
25
“Group 1 Derivative
Account”: As defined in Section 4.10(i).
“Group 1 Derivative
Contract”: Any of the Group 1 Cap Contracts or the Group 1
Interest Rate Swap Agreement, as applicable.
“Group 1 Derivative
Termination Payment”: Any termination payment due under a
Group 1 Derivative Contract upon the early termination of such
Group 1 Derivative Contract.
“Group 1 Estimated Swap
Termination Payment”: As defined in the Group 1 Interest Rate
Swap Agreement.
“Group 1 Interest Rate
Swap Agreement”: The interest rate swap agreement, dated as
of
[ ],
between the Group 1 Supplemental Interest Trust Trustee and the
Swap Provider for the benefit of the Class 1-A, Class 1-M and Class
1-B Certificates, which agreement provides for Net Swap Payments
and Swap Termination Payments to be paid, as provided therein,
including any schedule, confirmations, credit support annex or
other credit support document relating thereto.
“Group 1 Loans”:
The Mortgage Loans in Loan Group 1.
“Group 1 Marker
Rate”: With respect to the Class 1-C Certificates and any
Distribution Date, a per annum rate equal to two (2) times the
weighted average of the Uncertificated REMIC 3 Pass-Through Rates
for each REMIC 3 Group 1 Regular Interest for which a Class 1-A,
Class 1-M or Class 1-B Certificate is the Corresponding Certificate
and REMIC 3 Regular Interest 1-ZZ, with the rate on each such REMIC
3 Group 1 Regular Interest (other than REMIC 3 Regular Interests
1-AM and 1-ZZ) subject to a cap equal to the least of
(i) LIBOR plus the Certificate Margin for the Corresponding
Certificate for such Distribution Date, (ii) [11.50]% per
annum and (iii) the Group 1 Net WAC Rate for the REMIC 4
Regular Interest the ownership of which is represented by the
Corresponding Certificate for such Distribution Date for the
purpose of this calculation, with the rate on REMIC 3 Regular
Interest 1-AM subject to a cap equal to the least of (i) LIBOR
plus the Certificate Margin for the Corresponding Certificate for
such Distribution Date, (ii) [11.50]% per annum and
(iii) the Group 1 Net WAC Rate for the REMIC 4 Regular
Interest, the ownership of which is represented by the
Corresponding Certificate for such Distribution Date, in each case,
plus the Policy Premium Rate for the
[ ]
Certificates, for the purpose of this calculation, and with the
rate on REMIC 3 Regular Interest 1-ZZ subject to a cap of zero for
the purpose of this calculation; provided, however, that solely for
this purpose, the related cap with respect to each such REMIC 3
Group 1 Regular Interest (other than REMIC 3 Regular Interest 1-ZZ)
shall be multiplied by a fraction, the numerator of which is 30 and
the denominator of which is the actual number of days in the
related Accrual Period.
“Group 1 Maximum
Uncertificated Accrued Interest Deferral Amount”: With
respect to any Distribution Date, the excess of (i) the sum of
(x) accrued interest at the Uncertificated REMIC 3
Pass-Through Rate applicable to REMIC 3 Regular Interest 1-ZZ for
such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 3 Regular Interest 1-ZZ minus the REMIC
3 Group 1 Overcollateralized Amount, in each case for such
Distribution Date and (y) [ ]% of the
accrued interest on REMIC 3 Regular Interest 1-P at the applicable
Uncertificated REMIC 3 Pass-Through Rate for such Distribution
Date, over (ii) the aggregate
26
amount of Uncertificated Accrued
Interest for such Distribution Date on the REMIC 3 Group 1 Regular
Interests for which the Class 1-A, Class 1-M and Class 1-B
Certificates are the Corresponding Certificates, with the rate on
each such REMIC 3 Group 1 Regular Interest (other than REMIC 3
Regular Interest 1-AM) subject to a cap equal to the least of
(i) LIBOR plus the Certificate Margin for the Corresponding
Certificate for such Distribution Date, (ii) [11.50]% per
annum and (iii) the Group 1 Net WAC Rate for the REMIC 4
Regular Interest the ownership of which is represented by the
Corresponding Certificate for such Distribution Date for the
purpose of this calculation, and with the rate on REMIC 3 Regular
Interest 1-AM subject to a cap equal to the least of (i) LIBOR
plus the Certificate Margin for the Corresponding Certificate for
such Distribution Date, (ii) [11.50]% per annum and
(iii) the Group 1 Net WAC Rate for the REMIC 4 Regular
Interest the ownership of which is represented by the Corresponding
Certificate for such Distribution Date, in each case, plus the
Policy Premium Rate for the
[ ]
Certificates, for the purpose of this calculation; provided,
however, that solely for this purpose, the related cap with respect
to each such REMIC 3 Group 1 Regular Interest shall be multiplied
by a fraction, the numerator of which is 30 and the denominator of
which is the actual number of days in the related Accrual
Period.
“Group 1 Net Mortgage
Rate”: The weighted average of the Net Mortgage Rates of the
Group 1 Loans weighted on the basis of the Stated Principal
Balances of the Group 1 Loans as of the related Due Date (prior to
giving effect to any reduction in the Stated Principal Balances of
such Mortgage Loans on such Due Date).
“Group 1 Net Swap
Payment”: With respect to each Distribution Date, the net
payment required to be made pursuant to the terms of the Group 1
Interest Rate Swap Agreement by either the Group 1 Swap Provider or
the Group 1 Supplemental Interest Trust, which net payment shall
not take into account any Group 1 Swap Termination
Payment.
“Group 1 Net WAC
Rate”: With respect to the Class 1-A, Class 1-M and Class 1-B
Certificates and any Distribution Date, a per annum rate equal to
the excess, if any, of (A) a per annum rate equal to the Group
1 Net Mortgage Rate over (B) (1) the sum of (a) a
per annum rate equal to the Net Swap Payment with respect to the
Group 1 Interest Rate Swap Agreement payable to the Group 1 Swap
Provider on such Distribution Date, divided by the outstanding
Stated Principal Balance of the Group 1 Loans as of the first day
of the calendar month preceding the month in which the Distribution
Date occurs, multiplied by 12, and (b) a per annum rate equal
to any Swap Termination Payment with respect to the Group 1
Interest Rate Swap Agreement not due to a Swap Provider Trigger
Event payable to the Group 1 Swap Provider on such Distribution
Date, divided by the outstanding Stated Principal Balance of the
Group 1 Loans as of the first day of the calendar month preceding
the month in which the Distribution Date occurs, multiplied by 12,
and (2) in the case of the
[ ]
Certificates, the Policy Premium Rate for the
[ ]
Certificates. The Group 1 Net WAC Rate will be adjusted to an
effective rate reflecting the accrual of interest on an actual/360
basis. With respect to any Distribution Date and the REMIC 4
Regular Interests the ownership of which is represented by the
Class 1-A, Class 1-M and Class 1-B Certificates, a per annum rate
equal to the weighted average (adjusted for the actual number of
days elapsed in the related Accrual Period) of the Uncertificated
REMIC 3 Pass-Through Rates on the REMIC 3 Group 1 Regular Interests
(other than REMIC 3 Regular Interest 1-IO), weighted on the basis
of the Uncertificated Principal Balances of each such REMIC 3 Group
1 Regular Interest immediately prior to such Distribution Date,
minus, in the case of the REMIC 4 Regular Interests the ownership
of which is represented by the
[ ]
Certificates, the Policy Premium Rate for the
[ ]
Certificates.
27
“Group 1 Net WAC
Shortfall Reserve Fund”: A reserve fund established by the
Trustee for the benefit of the Holders of the Group 1 Certificates
and the Class 1-C Certficates, and funded on the Closing Date by or
on behalf of the Depositor with an amount equal to the Group 1 Net
WAC Shortfall Reserve Fund Deposit. The Group 1 Net WAC Shortfall
Reserve Fund is an “outside reserve fund” within the
meaning of Treasury regulation Section 1.860G-2(h), which is
not an asset of any REMIC, the ownership of which is evidenced by
the Class 1-C Certificates, and which is established and maintained
pursuant to Section 4.07.
“Group 1 Net WAC
Shortfall Reserve Fund Deposit”: With respect to the Group 1
Net WAC Shortfall Reserve Fund, an amount equal to $[5,000] which
the Depositor shall fund initially pursuant to Section 4.07
hereof.
“Group 1 Optional
Termination”: As defined in Section 9.01(b) of this
Agreement.
“Group 1
Overcollateralization Deficiency Amount”: With respect to any
Distribution Date, the amount, if any, by which the Group 1
Overcollateralization Target Amount exceeds the Group 1
Overcollateralized Amount on such Distribution Date (after giving
effect to distributions in respect of the related Basic Principal
Distribution Amount on such Distribution Date).
“Group 1
Overcollateralization Floor”: With respect to any
Distribution Date, [0.50]% of the Group 1 Cut-off Date
Balance.
“Group 1
Overcollateralization Release Amount”: With respect to any
Distribution Date, the lesser of (x) the related Principal
Remittance Amount for such Distribution Date and (y) the
excess, if any, of (i) the Group 1 Overcollateralized Amount
for such Distribution Date (assuming that 100% of the related
Principal Remittance Amount is applied as a principal payment on
such Distribution Date) over (ii) the Group 1
Overcollateralization Target Amount for such Distribution
Date.
“Group 1
Overcollateralization Target Amount”: With respect to any
Distribution Date prior to the Group 1 Stepdown Date, [
]% of the Group 1 Cut-off Date
Balance. With respect to any Distribution Date on or after the
Group 1 Stepdown Date, the greater of (x) [
]% of the aggregate Stated
Principal Balance of the Group 1 Loans and (y) the Group 1
Overcollateralization Floor; provided, however, that if a Group 1
Trigger Event is in effect on any Distribution Date, the Group 1
Overcollateralization Target Amount will be equal to the Group 1
Overcollateralization Target Amount on the prior Distribution
Date.
“Group 1
Overcollateralized Amount”: For any Distribution Date, the
amount, if any, by which (i) the aggregate Stated Principal
Balance of the related mortgage loans (after giving effect to
scheduled payments of principal due during the related Due Period,
to the extent received or advanced, unscheduled collections of
principal received during the related Prepayment Period and any
Realized Losses on the mortgage loans during the related Prepayment
Period), exceeds (ii) the aggregate Certificate Principal
Balance of the Class 1-A, Class 1-M, Class 1-B and the Class 1-P
Certificates as of such Distribution Date (after giving effect to
distributions in respect of the related Principal Remittance Amount
to be made on such Distribution Date).
28
“Group 1
Schedule”: The ISDA schedule, dated as of
[ ],
between the Group 1 Supplemental Interest Trust Trustee and
[CAP/SWAP COUNTERPARTY]
“Group 1 Stepdown
Date”: The earlier of (i) the first Distribution Date
after the Distribution Date on which the aggregate Certificate
Principal Balance of the Class 1-A Certificates have been reduced
to zero and (ii) the later to occur of (x) the
Distribution Date occurring in
[ ] and (y) the
first Distribution Date on which the aggregate Certificate
Principal Balance of the Class 1-A Certificates (calculated, for
this purpose only, prior to any distribution of principal to the
holders of the related certificates) is less than or equal to
[86.10]% of the aggregate principal balance of the Group 1 Loans,
calculated after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or
advanced, and unscheduled collections of principal received during
the related Prepayment Period.
“Group 1 Step-Up
Date”: The first Distribution Date following the first month
in which the aggregate unpaid principal balance of the Group 1
Loans, and properties acquired in respect thereof, remaining in the
trust has been reduced to less than or equal to [10]% of the
aggregate Group 1 Cut-off Date Balance.
“Group 1 Subordinate
Class Principal Distribution Amount”: For any class of Class
1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class
1-M-6, Class 1-M-7, Class 1-M-8 and Class 1-B Certificates and any
Distribution Date, the excess of (1) the sum of (a) the
aggregate Certificate Principal Balance of the Class 1-A
Certificates (after taking into account distribution of the Class
1-A Principal Distribution Amount for such Distribution Date),
(b) the aggregate Certificate Principal Balance of any
class(es) of Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4,
Class 1-M-5, Class 1-M-6, Class 1-M-7 and Class 1-M-8 that are
senior to the subject class (in each case, after taking into
account distribution of the Group 1 Subordinate Class Principal
Distribution Amount(s) for such more senior class(es) of
Certificates for such Distribution Date) and (c) the
Certificate Principal Balance of the subject class of Class 1-M-1,
Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6,
Class 1-M-7, Class 1-M-8 and Class 1-B Certificates immediately
prior to such Distribution Date over (2) the lesser of
(a) the product of (x) [100]% minus the Stepdown Target
Subordination Percentage for the subject class of Certificates and
(y) the aggregate Stated Principal Balance of the Group 1
Loans for such Distribution Date and (b) the aggregate Stated
Principal Balance of the Group 1 Loans for such Distribution Date
minus the Group 1 Overcollateralization Floor; provided, however,
that if such class of Class 1-M-1, Class 1-M-2, Class 1-M-3, Class
1-M-4, Class 1-M-5, Class 1-M-6, Class 1-M-7, Class 1-M-8 or Class
1-B Certificates is the only class of Group 1 Subordinate
Certificates outstanding on such Distribution Date, that class will
be entitled to receive the entire remaining related Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero.
“Group 1 Supplemental
Interest Trust”: The corpus of a trust created pursuant to
Section 4.10 of this Agreement and designated as the
“Group 1 Supplemental Interest Trust,” consisting of
the Group 1 Interest Rate Swap Agreement, the Group 1 Derivative
Account, the Group 1 Cap Contracts and the Class 1-IO Interest. For
the avoidance of doubt, the Group 1 Supplemental Interest Trust
does not constitute a part of the Trust Fund.
29
“Group 1 Supplemental
Interest Trust Trustee”: [TRUSTEE], or its successor in
interest, or any successor trustee appointed as herein
provided.
“Group 1 Swap Optional
Termination Payment”: As defined in Section 9.01(b)
hereof.
“Group 1 Swap
Provider”: The swap provider under the Group 1 Interest Rate
Swap Agreement either (a) entitled to receive payments from
the Group 1 Supplemental Interest Trust from amounts payable by the
Trust Fund with respect to the Mortgage Loans under this Agreement
or (b) required to make payments to the Group 1 Supplemental
Interest Trust for payment to the Trust Fund with respect to the
Mortgage Loans, in either case pursuant to the terms of the Group 1
Interest Rate Swap Agreement, and any successor in interest or
assign. Initially, the Group 1 Swap Provider shall be [CAP/SWAP
COUNTERPARTY]
“Group 1 Trigger
Event”: A Group 1 Trigger Event is in effect with respect to
any Distribution Date with respect to the Group 1 Loans
if:
(1) the average three-month
rolling percentage obtained by dividing (x) Aggregate Stated
Principal Balance of the Group 1 Loans that are 60 or more days
Delinquent (including for this purpose any such mortgage loans in
foreclosure, Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the trust, and Mortgage
Loans discharged due to bankruptcy) by (y) the Aggregate
Stated Principal Balance of the Mortgage Loans, in each case, as of
the last day of the previous calendar month, exceeds [
]% multiplied by the related Credit
Enhancement Percentage; or
(2) the cumulative amount of
Realized Losses incurred on the Group 1 Loans from the Cut-off Date
through the end of the calendar month immediately preceding such
Distribution Date divided by the Group 1 Cut-off Date Balance
exceeds (i) [ ]% with respect
to the Distribution Date occurring in [ ],
plus an additional 1/12th of [ ]%
for each month thereafter up to and including the Distribution Date
in [ ], (ii) [
]% with respect to the Distribution
Date occurring in [ ], plus an additional
1/12th of [ ]% for each month
thereafter up to and including the Distribution Date in
[ ], (iii) [
]% with respect to the Distribution
Date occurring in [ ], plus an additional
1/12th of [ ]% for each month
thereafter up to and including the Distribution Date in
[ ], (iv) [
]% with respect to any Distribution
Date occurring in [ ], plus an additional
1/12th of [ ]% for each month
thereafter up to and including the Distribution Date in
[ ] and (v) [
]% with respect to any Distribution
Date occurring in [ ] and
thereafter.
For purposes of the foregoing
calculation, a Mortgage Loan is considered “60 days”
Delinquent if a payment due on the first day of a month has not
been received by the second day of the second following
month.
“Group 2 Cap
Contract”: The interest rate cap agreement, dated as of
[ ], between the Group 2 Cap Counterparty
and Group 2 Supplemental Interest Trust Trustee, including any
schedule, confirmations, credit support annex or other credit
support document relating thereto.
30
“Group 2 Cap
Counterparty”: The cap provider under the Group 2 Cap
Contract. Initially, the Group 2 Cap Counterparty shall be
[CAP/SWAP COUNTERPARTY]
“Group 2 Class IO
Distribution Amount”: As defined in Section 4.11 hereof.
For purposes of clarity, the Group 2 Class IO Distribution Amount
for any Distribution Date shall equal the amount payable to the
Group 2 Supplemental Interest Trust with respect to the Group 2
Interest Rate Swap Agreement pursuant to the first and second
sentences of Section 4.01(a) (sixth paragraph) on such
Distribution Date in excess of the amount payable on the Class 2-IO
Interest on such Distribution Date, all as further provided in
Section 4.11 hereof.
“Group 2 Collateral
Account”: Shall mean the segregated trust account created and
maintained by Group 2 Custodian pursuant to Section 4.14(ii)
hereof.
“Group 2 Credit Support
Annexes”: Each of Credit Support Annex Two and Credit Support
Annex Five.
“Group 2
Custodian”: As defined in Section 4.14(ii).
“Group 2 Cut-off Date
Balance”: With respect to any Mortgage Loan in Loan Group 2,
the Stated Principal Balance thereof as of the Cut-off
Date.
“Group 2 Derivative
Account”: As defined in Section 4.11(i).
“Group 2 Derivative
Contract”: Any of the Group 2 Cap Contract or the Group 2
Interest Rate Swap Agreement, as applicable.
“Group 2 Derivative
Termination Payment”: Any termination payment due under a
Group 2 Derivative Contract upon the early termination of such
Group 2 Derivative Contract.
“Group 2 Estimated Swap
Termination Payment”: As defined in the Group 2 Interest Rate
Swap Agreement.
“Group 2 Interest Rate
Swap Agreement”: The interest rate swap agreement, dated as
of
[ ],
between the Group 2 Supplemental Interest Trust Trustee and the
Swap Provider for the benefit of the
[ ]
Certificates, which agreement provides for Net Swap Payments and
Swap Termination Payments to be paid, as provided therein,
including any schedule, confirmations, credit support annex or
other credit support document relating thereto.
“Group 2 Loans”:
The Mortgage Loans in Loan Group 2.
“Group 2 Marker
Rate”: With respect to the Class 2-C Certificates and any
Distribution Date, a per annum rate equal to two (2) times the
weighted average of the Uncertificated REMIC 3 Pass-Through Rates
for REMIC 3 Regular Interest 2-A and REMIC 3 Regular Interest 2-ZZ,
with the rate on REMIC 3 Regular Interest 2-A subject to a cap
equal to the least of (i) LIBOR plus the Certificate Margin
for the Corresponding Certificate for such Distribution Date,
(ii) [ ]% per annum and
(iii) the Group 2 Net WAC Rate for the REMIC 4 Regular
Interest the ownership of which is represented by the Corresponding
Certificate for such Distribution Date, in each case, plus the
Policy Premium Rate for the
[ ]
Certificates, for the purpose of this
31
calculation, and with the rate on REMIC
3 Regular Interest 2-ZZ subject to a cap of zero for the purpose of
this calculation; provided, however, that solely for this purpose,
the related cap with respect to REMIC 3 Regular Interest 2-A shall
be multiplied by a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related
Accrual Period.
“Group 2 Maximum
Uncertificated Accrued Interest Deferral Amount”: With
respect to any Distribution Date, the excess of (i) the sum of
(x) accrued interest at the Uncertificated REMIC 3
Pass-Through Rate applicable to REMIC 3 Regular Interest 2-ZZ for
such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 3 Regular Interest 2-ZZ minus the REMIC
3 Group 2 Overcollateralized Amount, in each case for such
Distribution Date and (y) [ ]%
of the accrued interest on REMIC 3 Regular Interest 2-P at the
applicable Uncertificated REMIC 3 Pass-Through Rate for such
Distribution Date, over (ii) the aggregate amount of
Uncertificated Accrued Interest for such Distribution Date on REMIC
3 Regular Interest 2-A, with the rate on such REMIC 3 Regular
Interest subject to a cap equal to the least of (i) LIBOR plus
the Certificate Margin for the Corresponding Certificate for such
Distribution Date, (ii) [11.50]% per annum and (iii) the
Group 2 Net WAC Rate for the REMIC 4 Regular Interest the ownership
of which is represented by the Corresponding Certificate for such
Distribution Date, in each case, plus the Policy Premium Rate for
the
[ ]
Certificates, for the purpose of this calculation; provided,
however, that solely for this purpose, the related cap with respect
to REMIC 3 Regular Interest 2-A shall be multiplied by a fraction,
the numerator of which is 30 and the denominator of which is the
actual number of days in the related Accrual Period.
“Group 2 Net Mortgage
Rate”: The weighted average of the Net Mortgage Rates of the
Group 2 Loans weighted on the basis of the Stated Principal
Balances of the Group 2 Loans as of the related Due Date (prior to
giving effect to any reduction in the Stated Principal Balances of
such Mortgage Loans on such due date).
“Group 2 Net Swap
Payment”: With respect to each Distribution Date, the net
payment required to be made pursuant to the terms of the Group 2
Interest Rate Swap Agreement by either the Group 2 Swap Provider or
the Group 2 Supplemental Interest Trust, which net payment shall
not take into account any Group 2 Swap Termination
Payment.
“Group 2 Net WAC
Rate”: With respect to the
[ ]
Certificates and any Distribution Date, a per annum rate equal to
the excess, if any, of (A) a per annum rate equal to the Group
2 Net Mortgage Rate over (B) the sum of (1) the sum of
(a) a per annum rate equal to the Net Swap Payment with
respect to the Group 2 Interest Rate Swap Agreement payable to the
Group 2 Swap Provider on such Distribution Date, divided by the
outstanding Stated Principal Balance of the Group 2 Loans as of the
first day of the calendar month preceding the month in which the
Distribution Date occurs, multiplied by 12, and (b) a per
annum rate equal to any Swap Termination Payment with respect to
the Group 2 Interest Rate Swap Agreement not due to a Swap Provider
Trigger Event payable to the Group 2 Swap Provider on such
Distribution Date, divided by the outstanding Stated Principal
Balance of the Group 2 Loans as of the first day of the calendar
month preceding the month in which the Distribution Date occurs,
multiplied by 12, and (2) the Policy Premium Rate for the
[ ]
Certificates. The Group 2 Net WAC Rate will be adjusted to an
effective rate reflecting the accrual of interest on an actual/360
basis.
32
With respect to any Distribution Date
and the REMIC 4 Regular Interests the ownership of which is
represented by the
[ ]
Certificates, a per annum rate equal to the weighted average
(adjusted for the actual number of days elapsed in the related
Accrual Period) of the Uncertificated REMIC 3 Pass-Through Rates on
the REMIC 3 Group 2 Regular Interests (other than REMIC 3 Regular
Interest 2-IO), weighted on the basis of the Uncertificated
Principal Balances of each such REMIC 3 Group 2 Regular Interest
immediately prior to such Distribution Date, minus the Policy
Premium Rate for the
[ ]
Certificates.
“Group 2 Net WAC
Shortfall Reserve Fund”: A reserve fund established by the
Trustee for the benefit of the Holders of the Class 2-A
Certificates and the Class 2-C Certificates, and funded on the
Closing Date by or on behalf of the Depositor with an amount equal
to the Group 2 Net WAC Shortfall Reserve Fund Deposit. The Group 2
Net WAC Shortfall Reserve Fund is an “outside reserve
fund” within the meaning of Treasury regulation
Section 1.860G-2(h), which is not an asset of any REMIC, the
ownership of which is evidenced by the Class 2-C Certificates, and
which is established and maintained pursuant to
Section 4.08.
“Group 2 Net WAC
Shortfall Reserve Fund Deposit”: With respect to the Group 2
Net WAC Shortfall Reserve Fund, an amount equal to $[5,000], which
the Depositor shall fund initially pursuant to Section 4.08
hereof.
“Group 2 Optional
Termination”: As defined in Section 9.01(g) of this
Agreement.
“Group 2
Overcollateralization Deficiency Amount”: With respect to any
Distribution Date, the amount, if any, by which the Group 2
Overcollateralization Target Amount exceeds the Group 2
Overcollateralized Amount on such Distribution Date (after giving
effect to distributions in respect of the related Basic Principal
Distribution Amount on such Distribution Date).
“Group 2
Overcollateralization Floor”: With respect to any
Distribution Date, the greater of (x) [0.50]% of the Group 2
Cut-off Date Balance and (y) two times the Stated Principal
Balance of the Group 2 Loan with the largest outstanding Stated
Principal Balance as of the end of the related Prepayment
Period.
“Group 2
Overcollateralization Release Amount”: With respect to any
Distribution Date, the lesser of (x) the related Principal
Remittance Amount for such Distribution Date and (y) the
excess, if any, of (i) the Group 2 Overcollateralized Amount
for such Distribution Date (assuming that 100% of the related
Principal Remittance Amount is applied as a principal payment on
such Distribution Date) over (ii) the Group 2
Overcollateralization Target Amount for such Distribution
Date.
“Group 2
Overcollateralization Target Amount”: With respect to any
Distribution Date prior to the Group 2 Stepdown Date, [6.25]% of
the Group 2 Cut-off Date Balance. With respect to any Distribution
Date on or after the Group 2 Stepdown Date, the greater of
(x) [12.50]% of the aggregate Stated Principal Balance of the
Group 2 Loans and (y) the Group 2 Overcollateralization Floor;
provided, however, that if a Group 2 Trigger Event is in effect on
any Distribution Date, the Group 2 Overcollateralization Target
Amount will be equal to the Group 2 Overcollateralization Target
Amount on the prior Distribution Date.
33
“Group 2
Overcollateralized Amount”: For any Distribution Date, the
amount, if any, by which (i) the aggregate principal balance
of the related mortgage loans (after giving effect to scheduled
payments of principal due during the related Due Period, to the
extent received or advanced, unscheduled collections of principal
received during the related Prepayment Period and any Realized
Losses on the Mortgage Loans during the related Prepayment Period),
exceeds (ii) the aggregate Certificate Principal Balance of
the Class 2-A Certificates and the Class 2-P Certificates as of
such Distribution Date (after giving effect to distributions in
respect of the related Principal Remittance Amount to be made on
such Distribution Date).
“Group 2
Schedule”: The ISDA schedule, dated as of
[ ],
between the Group 2 Supplemental Interest Trust Trustee and
[CAP/SWAP COUNTERPARTY]
“Group 2 Stepdown
Date”: The later to occur of (x) the Distribution Date
occurring in [ ]and (y) the
first Distribution Date on which the aggregate Certificate
Principal Balance of the Class 2-A Certificates (calculated, for
this purpose only, prior to any distribution of principal to the
holders of the certificates) is less than or equal to [
]% of the aggregate principal
balance of the Group 2 Loans, calculated after giving effect to
scheduled payments of principal due during the related Due Period,
to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period.
“Group 2 Step-Up
Date”: The first Distribution Date following the first month
in which the aggregate unpaid principal balance of the Group 2
Loans, and properties acquired in respect thereof, remaining in the
trust has been reduced to less than or equal to [10]% of the
aggregate Group 2 Cut-off Date Balance.
“Group 2 Supplemental
Interest Trust”: The corpus of a trust created pursuant to
Section 4.11 of this Agreement and designated as the
“Group 2 Supplemental Interest Trust,” consisting of
the Group 2 Interest Rate Swap Agreement, the Group 2 Derivative
Account, the Group 2 Cap Contract and the Class 2-IO Interest. For
the avoidance of doubt, the Group 2 Supplemental Interest Trust
does not constitute a part of the Trust Fund.
“Group 2 Supplemental
Interest Trust Trustee”: [TRUSTEE], or its successor in
interest, or any successor trustee appointed as herein
provided.
“Group 2 Swap Optional
Termination Payment”: As defined in Section 9.01(f)
hereof.
“Group 2 Swap
Provider”: The swap provider under the Group 2 Interest Rate
Swap Agreement either (a) entitled to receive payments from
the Group 2 Supplemental Interest Trust from amounts payable by the
Trust Fund with respect to the Mortgage Loans under this Agreement
or (b) required to make payments to the Group 2 Supplemental
Interest Trust for payment to the Trust Fund with respect to the
Group 2 Mortgage Loans, in either case pursuant to the terms of the
Group 2 Interest Rate Swap Agreement, and any successor in interest
or assign. Initially, the Group 2 Swap Provider shall be [CAP/SWAP
COUNTERPARTY]
“Group 2 Trigger
Event”: A Group 2 Trigger Event is in effect with respect to
any Distribution Date with respect to the Group 2 Loans
if:
(1) the three month average
of the aggregate principal balance of Group 2 Loans that are 60 or
more days Delinquent (including for this purpose any such Mortgage
Loans in bankruptcy or foreclosure and Mortgage Loans with respect
to which the related mortgaged property has been acquired by the
trust) as of the close of business on the last day of the preceding
calendar month exceeds in the case of any Distribution Date prior
to the
[ ]
Distribution Date, [ ]%, and in the
case of any Distribution Date on or after the
[ ]
Distribution Date, [ ]% of the
aggregate Stated Principal Balance of the Group 2 Loans;
34
(2) the cumulative amount of
Realized Losses incurred on the Group 2 Loans from the Cut-off Date
through the end of the calendar month immediately preceding such
Distribution Date divided by the Group 2 Cut-off Date Balance
exceeds (i) [ ]% with respect
to the Distribution Date occurring in
[ ]
plus an additional 1/12th of [ ]%
for each month thereafter up to and including the Distribution Date
in
[ ],
(ii) [ ]% with respect to the
Distribution Date occurring in
[ ],
plus an additional 1/12th of [ ]%
for each month thereafter up to and including the Distribution Date
in
[ ],
(iii) [ ]% with respect to the
Distribution Date occurring in
[ ],
plus an additional 1/12th of [ ]%
for each month thereafter up to and including the Distribution Date
in
[ ]
and (iv) [ ]% with respect to
any Distribution Date occurring in
[ ]
and thereafter.
For purposes of the foregoing
calculation, a mortgage loan is considered “60 days”
Delinquent if a payment due on the first day of a month has not
been received by the second day of the second following
month.
“Index”: With
respect to any Mortgage Loan, the index for the adjustment of the
Mortgage Rate set forth as such on the related Mortgage
Note.
“Initial Certificate
Principal Balance”: With respect to each Class of Regular
Certificates, the Initial Certificate Principal Balance of such
Class of Certificates as set forth in the Preliminary Statement
hereto, or with respect to any single Certificate, the Initial
Certificate Principal Balance as stated on the face
thereof.
“Initial Notional
Amount”: With respect to the Class C Certificates, an amount
equal to the Notional Balance of the Class C Certificates, or with
respect to any single Certificate, the Initial Notional Amount as
stated on the face thereof.
“Insurance
Account”: The segregated, non-interest bearing trust account
created and maintained pursuant to Section 4.12(b) of this
Agreement. The Insurance Account shall be an Eligible
Account.
“Insurance
Agreement”: The Insurance and Indemnity Agreement, dated as
of
[ ],
among the Certificate Insurer, the Depositor, the Sponsor, the
Servicer, and the Trustee in regard to the
[ ]
Certificates, as such agreement may be amended, modified or
supplemented from time to time.
“Insurance
Policy”: With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under
this Agreement in respect of such Mortgage Loan.
35
“Insurance
Proceeds”: Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Hazard Insurance Policy, any title
insurance policy or any other insurance policy covering a Mortgage
Loan, to the extent such proceeds are not 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.
“Insured
Amounts”: Shall mean (1) with respect to any
Distribution Date, any Deficiency Amount plus any Preference Amount
and (2) with respect to the Final Scheduled Distribution Date,
the Deficiency Amount for the Final Scheduled Distribution
Date.
“Insurer
Default”: An insurer default will occur in the event the
Certificate Insurer fails to make a payment under the Certificate
Guaranty Insurance Policy or if certain events of bankruptcy or
insolvency occur with respect to the Certificate
Insurer.
“Interest Rate Swap
Agreement”: The Group 1 Interest Rate Swap Agreement or the
Group 2 Interest Rate Swap Agreement.
“Interest Remittance
Amount”: With respect to any Distribution Date and each Loan
Group, that portion of the Available Distribution Amount for such
Distribution Date that represents interest received or advanced
with respect to the related Mortgage Loans.
“Interest Reserve Fund
Amount”: The Class 1-M-4 Interest Reserve Fund Amount, Class
1-M-5 Interest Reserve Fund Amount, Class 1-M-6 Interest Reserve
Fund Amount and Class 1-M-7 Interest Reserve Fund Amount, as
applicable.
“Late
Collections”: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or
otherwise, which represent late payments or collections of Monthly
Payments due but Delinquent for a previous Due Period and not
previously recovered.
“LIBOR”: With
respect to any Distribution Date and the Pass-Through Rates on the
Class A Certificates and Subordinate Certificates, the
arithmetic mean of the London interbank offered rate quotations of
reference banks (which will be selected by the Trustee after
consultation with the Servicer) for one-month U.S. dollar deposits,
expressed on a per annum basis, determined in accordance with
Section 1.02.
“LIBOR Business
Day”: Any day other than (i) Saturday or Sunday or
(ii) a day on which banking institutions in the city of
London, England and New York City are required or authorized by law
to be closed.
“LIBOR Rate Adjustment
Date”: With respect to each Distribution Date, the second
LIBOR Business Day immediately preceding the commencement of the
related Accrual Period.
“Liquidated Mortgage
Loan”: A Mortgage Loan with respect to which the related
Mortgaged Property has been acquired, liquidated or foreclosed and
with respect to which the Servicer determines that all Liquidation
Proceeds which it expects to recover have been recovered and for
which the Servicer has so designated on its Servicer Remittance
Report.
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“Liquidation
Proceeds”: Amounts (other than Insurance Proceeds) received
by the Servicer in connection with the taking of an entire
Mortgaged Property by exercise of the power of eminent domain or
condemnation or in connection with the liquidation of a defaulted
Mortgage Loan through trustee’s sale, foreclosure sale or
otherwise, other than amounts received in respect of any REO
Property.
“Loan-to-Value
Ratio”: As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance
of the related Mortgage Loan at the date of determination and the
denominator of which is the Collateral Value of the related
Mortgaged Property.
“Loan Group”: Any
of Loan Group 1 or Loan Group 2.
“Loan Group 1”:
The group 1 loans.
“Loan Group 2”:
The group 2 loans.
“Lost Note
Affidavit”: With respect to any Mortgage Note, an original
lost note affidavit from the Sponsor stating that the original
Mortgage Note was lost, misplaced or destroyed, together with a
copy of the related Mortgage Note.
“Majority Class C
Certificateholder”: The holder of a 50.01% or greater
Percentage Interest of the Class C Certificates.
“MERS”: Mortgage
Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
“MERS ®
System”: The system of recording transfers of Mortgages
electronically maintained by MERS.
“MIN”: The
Mortgage Identification Number for Mortgage Loans registered with
MERS on the MERS ® System.
“MOM Loan”: With
respect to any Mortgage Loan, MERS acting as the mortgagee of such
Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination
thereof.
“Monthly Interest
Distributable Amount”: For any Distribution Date and each
class of Offered Certificates, Class 1-B Certificates, Class C
Certificates and Class IO Interests, the amount of interest accrued
during the related Accrual Period at the related Pass-Through Rate
on the Certificate Principal Balances or Notional Balances or
Uncertificated Notional Amounts of such Certificates or interests
immediately prior to such Distribution Date, in each case, reduced
by any Net Prepayment Interest Shortfalls to the extent not covered
by Compensating Interest payable by the Servicer and any shortfalls
resulting from the application of the Relief Act (in each case to
the extent allocated to such class of Certificates or interests as
set forth in Section 1.03). The Monthly Interest Distributable
Amount on the Offered Certificates and Class 1-B Certificates will
be calculated on the basis of the actual number of days in the
related Accrual Period and a 360-day year.
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“Monthly
Payment”: With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan
which is payable by a Mortgagor from time to time under the related
Mortgage Note as originally executed (after adjustment, if any, for
Deficient Valuations occurring prior to such Due Date, and after
any adjustment by reason of any bankruptcy or similar proceeding or
any moratorium or similar waiver or grace period).
[“Moody’s”:
Moody’s Investors Service, Inc., or its successor in
interest.]
“Mortgage”: The
mortgage, deed of trust or any other instrument securing the
Mortgage Loan.
“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 and the
Custodial Agreement; provided, that whenever the term
“Mortgage File” is used to refer to documents actually
received by the Custodian, such term shall not be deemed to include
such additional documents required to be added unless they are
actually so added.
“Mortgage Loan”:
The mortgage loans (together with any Qualified Substitute Mortgage
Loans substituted therefor in accordance with the Basic Documents,
as from time to time are held as a part of the Issuing Entity), so
being identified in the Mortgage Loan Schedule on the Closing Date.
When used in respect of any Distribution Date, the term Mortgage
Loans shall mean all Mortgage Loans (including those in respect of
which the Trustee has acquired the related Mortgaged Property)
which have not been repaid in full prior to the related Due Period,
did not become Liquidated Mortgage Loans prior to such related Due
Period or were not repurchased or replaced by the Sponsor prior to
such related Due Period.
“Mortgage Loan Purchase
Agreement”: The Mortgage Loan Purchase Agreement dated as of
[ ],
among Accredited Home Lenders, Inc., as sponsor, and the Depositor,
as purchaser, and all amendments thereof and supplements
thereto.
“Mortgage Loan
Schedule”: The schedule of Mortgage Loans as of the Cut-Off
Date attached hereto as Exhibit H, which will be deemed to be
modified automatically to reflect any replacement, sale,
substitution, liquidation, transfer or addition of any Mortgage
Loan. The Mortgage Loan Schedule sets forth as to each Mortgage
Loan: (i) its identifying number and the name of the related
Mortgagor; (ii) the billing address, mailing address and
property address for the related Mortgaged Property including the
state and zip code; (iii) its date of origination;
(iv) the original number of months to stated maturity;
(v) a designation indicating whether or not such Mortgage Loan
is a Balloon Loan; (vi) the original Principal Balance;
(vii) its Principal Balance as of the applicable Cut-Off Date
and its Cut-Off Date Principal Balance; (viii) the Mortgage
Interest Rate and margin; (ix) the scheduled monthly payment
of principal and interest; (x) the LTV; (xi) if the
Mortgage Loan is registered with MERS on the MERS System, the MIN;
(xii) whether the Mortgage Loan is secured by a first or
second lien on the related Mortgage Property; and
(xiii) whether such Mortgage Loan is secured by a first lien
on the related Mortgage Property.
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“Mortgage Note”:
The note or other evidence of the indebtedness of a Mortgagor under
a Mortgage Loan.
“Mortgage Rate”:
With respect to any Mortgage Loan, the annual rate at which
interest accrues on such Mortgage Loan in the absence of default,
as adjusted from time to time in accordance with the provisions of
the Mortgage Note.
“Mortgaged
Property”: The underlying property securing a Mortgage
Loan.
“Mortgagor”: The
obligor or obligors on a Mortgage Note.
“Net Liquidation
Proceeds”: As to any Liquidated Mortgage Loan, Liquidation
Proceeds net of Liquidation Expenses and net of any unreimbursed
Delinquency Advances and Servicing Advances made by the Servicer
with respect to such Liquidated Mortgage Loan. For all purposes of
the Basic Documents, Net Liquidation Proceeds shall be allocated
first to accrued and unpaid interest on the related Mortgage Loan
and then to the unpaid Principal Balance thereof.
“Net Monthly Excess
Cashflow”: For any Distribution Date and any Loan Group, the
sum of (a) any related Overcollateralization Release Amount
and (b) the excess of (x) the related Interest Remittance
Amount for such Distribution Date over (y) the aggregate
Monthly Interest Distributable Amount for the related Offered
Certificates and Class 1-B Certificates for such Distribution
Date.
“Net Mortgage
Rate”: With respect to each Mortgage Loan Due Date, the then
applicable Mortgage Rate thereon minus the Servicing Fee
Rate.
“Net Prepayment
Interest Shortfall”: With respect to any Distribution Date,
the excess, if any, of any Prepayment Interest Shortfalls for such
date over the related Compensating Interest.
“Net Swap
Payment”: Any of the Group 1 Net Swap Payment or Group 2 Net
Swap Payment, as applicable.
“Net WAC Rate”:
With respect to the Class 1-A, Class 1-M and Class 1-B
Certificates, the Group 1 Net WAC Rate. With respect to the Class
2-A Certificates, the Group 2 Net WAC Rate.
“Net WAC Shortfall
Amount”: With respect to the Offered Certificates, the Class
1-B Certificates and any Distribution Date, the sum of (i) the
excess, if any, of (a) the amount of interest such Offered
Certificates or Class 1-B Certificates would have been entitled to
receive on such Distribution Date at the related Pass-Through Rate
without regard to the applicable Net WAC Rate over (b) the
amount of interest accrued on such Certificates at such Net WAC
Rate, plus (ii) the related Net WAC Shortfall Amount from the
prior Distribution Date not previously reimbursed together with
interest thereon at the related Pass-Through Rate for the most
recently ended Accrual Period.
“Net WAC Shortfall
Reserve Fund”: Any of the Group 1 Net WAC Shortfall Reserve
Fund or the Group 2 Net WAC Shortfall Reserve Fund.
39
“Nonrecoverable
Advance”: Means, with respect to any Mortgage Loan,
(a) any Delinquency Advance or Servicing Advance previously
made and not reimbursed pursuant to Section 3.03 of this
Agreement, or (b) a Delinquency Advance proposed to be made in
respect of a Mortgage Loan or REO Property either of which, in the
good faith business judgment of the Servicer, as evidenced by an
Officer’s Certificate delivered to the Trustee no later than
the Business Day following such determination, would not ultimately
be recoverable pursuant to Section 3.03 of this
Agreement.
“Non-United States
Person”: Any Person other than a United States
Person.
“Notional
Balance”: With respect to the Class 1-C Certificates and any
Distribution Date, an amount equal to the Stated Principal Balance
of the Group 1 Loans as of the related Due Date, minus the
Certificate Principal Balance of the Class 1-P Certificates. For
federal income tax purposes, the Notional Balance of the Class 1-C
Certificates for any Distribution Date shall be an amount equal to
the aggregate Uncertificated Principal Balance of the REMIC 3 Group
1 Regular Interests, other than REMIC 3 Regular Interest 1-P, for
such Distribution Date. With respect to the Class 2-C Certificates
and any Distribution Date, an amount equal to the Stated Principal
Balance of the Group 2 Loans as of the related Due Date, minus the
Certificate Principal Balance of the Class 2-P Certificates. For
federal income tax purposes, the Notional Balance of the Class 2-C
Certificates for any Distribution Date shall be an amount equal to
the aggregate Uncertificated Principal Balance of the REMIC 3 Group
2 Regular Interests, other than REMIC 3 Regular Interest 2-P, for
such Distribution Date.
“Officers’
Certificate”: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice
president and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Depositor, the
Sponsor, the Servicer and delivered to the Depositor and
Trustee.
“Offered
Certificates”: The Class 1-A, Class 2-A and Class 1-M
Certificates.
“One Month
LIBOR”: The London interbank offered rate for one-month
United States dollar deposits, determined as described in
Section 1.02 of this Agreement.
“Opinion of
Counsel”: A written opinion of counsel, who may be counsel
for the Depositor, the Sponsor, or the Servicer, reasonably
acceptable to the Trustee; except that any opinion of counsel
relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account,
(b) the qualification of REMIC 1, REMIC 2, REMIC 3 or REMIC 4
as REMICs, (c) compliance with the REMIC Provisions or
(d) resignation of the Servicer pursuant to Section 6.04
must be an opinion of counsel who (i) is in fact independent
of the Depositor and the Servicer, (ii) does not have any
direct financial interest or any material indirect financial
interest in the Depositor or the Servicer or in an affiliate of
either and (iii) is not connected with the Depositor or the
Servicer as an officer, employee, director or person performing
similar functions.
“Optional
Termination”: As defined in Section 9.01(b) of this
Agreement.
“Optional Termination
Date”: The first Distribution Date on which the Servicer may
opt to terminate the Trust Fund pursuant to
Section 9.01.
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“Outstanding Mortgage
Loan”: As to any Due Date, a Mortgage Loan (including an REO
Property) which was not the subject of a Principal Prepayment in
Full, Cash Liquidation or REO Disposition and which was not
purchased prior to such Due Date pursuant to Sections 2.02, 2.04 or
3.14.
“Overcollateralization
Deficiency Amount”: The Group 1 Overcollataralization
Deficiency Amount or the Group 2 Overcollateralization Deficiency
Amount, as applicable.
“Overcollateralization
Floor”: The Group 1 Overcollateralization Floor or the Group
2 Overcollateralization Floor, as applicable.
“Overcollateralization
Release Amount”: The Group 1 Overcollateralization Release
Amount or the Group 2 Overcollateralization Release Amount, as
applicable.
“Overcollateralization
Target Amount”: The Group 1 Overcollateralization Target
Amount or the Group 2 Overcollateralization Target Amount, as
applicable.
“Overcollateralized
Amount”: The Group 1 Overcollateralized Amount or the Group 2
Overcollateralized Amount, as applicable.
“Ownership
Interest”: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein,
whether direct or indirect, legal or beneficial, as owner or as
pledgee.
“Pass-Through
Rate”: With respect to any Distribution Date and
(i) the Offered Certificates
and the Class 1-B Certificates, the least of (x) One-Month
LIBOR plus the related Certificate Margin (y) the applicable
Net WAC Rate and (z) [11.50]% per annum;
(ii) the Class 1-C
Certificates and any Distribution Date, (x) a rate per annum
equal to the percentage equivalent of a fraction, the numerator of
which is the sum of the amount determined for each REMIC 3 Group 1
Regular Interest (other than REMIC 3 Regular Interests 1-IO and
1-P) equal to the product of (a) the excess, if any, of the
Uncertificated REMIC 3 Pass-Through Rate for such REMIC 3 Group 1
Regular Interest over the Group 1 Marker Rate and (b) a
notional amount equal to the Uncertificated Principal Balance of
such REMIC 3 Group 1 Regular Interest, and the denominator of which
is the aggregate Uncertificated Principal Balance of such REMIC 3
Group 1 Regular Interests, and (y) 100% of the interest
distributable in respect of REMIC 3 Regular Interest
1-P;
(iii) the Class 2-C
Certificates and any Distribution Date, (x) a rate per annum
equal to the percentage equivalent of a fraction, the numerator of
which is the sum of the amount determined for each REMIC 3 Group 2
Regular Interest (other than REMIC 3 Regular Interests 2-IO and
2-P) equal to the product of (a) the excess, if any, of the
Uncertificated REMIC 3 Pass-Through Rate for such REMIC 3 Group 2
Regular Interest over the Group 2 Marker Rate and (b) a
notional amount equal to the Uncertificated Principal Balance of
such REMIC 3 Group 2 Regular Interest, and the denominator of which
is the aggregate Uncertificated Principal Balance of such REMIC 3
Group 2 Regular Interests, and (y) 100% of the interest
distributable in respect of REMIC 3 Regular Interest
2-P;
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(iv) each of the Class 1-P
Certificates and Class 2-P Certificates, [0.00]% per annum;
and
(v) each of the Class 1-IO
Interest and Class 2-IO Interest, 100% of the amounts distributable
to REMIC 3 Regular Interest 1-IO and REMIC 3 Regular Interest 2-IO,
respectively, for such Distribution Date.
“Percentage
Interest”: With respect to any Regular Certificate, the
undivided percentage ownership interest in the related Class
evidenced by such Certificate, which percentage ownership interest
shall be equal to the Initial Certificate Principal Balance thereof
divided by the aggregate Initial Certificate Principal Balance of
all of the Certificates of the same Class. With respect to any
Class R Certificate, the interest in distributions to be made with
respect to such Class evidenced thereby, expressed as a percentage,
as stated on the face of each such Certificate.
“Permitted
Investment”: As used herein, Permitted Investments shall
include the following:
(i) obligations of, or
guaranteed as to timely payments of principal and interest by, the
United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on
obligations specified in clause (i) maturing not more than
three months from the date of acquisition thereof, provided that
the unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated at least A-l+ by S&P and in
one of the two highest ratings by Moody’s;
(iii) certificates of
deposit, time deposits and bankers’ acceptances (which, in
the case of bankers’ acceptances, shall in no event have an
original maturity of more than 365 days) of any U.S. depository
institution or trust company, incorporated under the laws of the
United States or any state; provided , that the debt
obligations of such depository institution or trust company at the
date of acquisition thereof have been rated in one of the two
highest ratings by Moody’s and S&P;
(iv) commercial paper (having
original maturities of not more than 270 days) of any corporation
incorporated under the laws of the United States or any state
thereof which on the date of acquisition has been rated in the
highest short-term rating by each of the Rating Agencies;
and
(v) units of money
market funds registered under the Investment Company Act of 1940,
investing in any of the foregoing, including any funds managed or
advised by the Trustee or any affiliate of the Trustee;
provided , such money market funds are at the time rated at
least “AAAm” or “AAAm-G” by S&P, and in
one of the two highest short-term ratings by
Moody’s;
provided , that no
instrument described hereunder shall evidence either the right to
receive (x) only interest with respect to the obligations
underlying such instrument or (y) both principal
42
and interest payments derived from
obligations underlying such instrument and the interest and
principal payments with respect to such instrument provided a yield
to maturity at par greater than 120% of the yield to maturity at
par of the underlying obligations; and provided ,
further , that no instrument described hereunder may be
purchased at a price greater than par if such instrument may be
prepaid or called at a price less than its purchase price prior to
stated maturity.
“Permitted
Transferee”: Any transferee of a Residual Certificate other
than a Disqualified Organization, a Non-United States Person or an
“electing large partnership” (as defined in
Section 775 of the Code).
“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.
“Policy Premium”:
The premium set forth in the Certificate Guaranty Insurance
Policy. | 
