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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest Event
Reported): January 4, 2001
DLJ MORTGAGE ACCEPTANCE CORP. (as depositor under the
Pooling and Servicing Agreement, dated as
of December 1, 2000, providing for the issuance of the
DLJ MORTGAGE ACCEPTANCE CORP.,
DLJ ABS Trust Series 2000-7
Mortgage Pass-Through Certificates, Series 2000-7).
DLJ MORTGAGE ACCEPTANCE CORP.
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(Exact name of registrant as specified in its charter)
Delaware 333-75921 13-3460894
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
11 Madison Avenue
New York, New York 10010
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (212) 325-2000
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<PAGE>
Item 5. Other Events.
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On January 4, 2001, DLJ Mortgage Acceptance Corp. (the "Company") entered into
a Pooling and Servicing Agreement dated as of August 1, 2000 (the "Pooling and
Servicing Agreement"), by and among the Company, as depositor, DLJ Mortgage
Capital, Inc., as the Seller, Calmco Servicing L.P., as a servicer and as the
special servicer, Old Kent Mortgage Company, as a servicer, and The Chase
Manhattan Bank, as trustee, providing for the issuance of the Company's
Mortgage Pass-Through Certificates, Series 2000-7. Capitalized terms used but
not defined herein shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement.
In connection therewith, on January 4, 2001, on behalf of the Trust the
Company received a Mortgage Portfolio Insurance Policy dated as of January 4,
2001 (the "Mortgage Portfolio Insurance Policy"), from General Electric
Mortgage Insurance Corporation. A form of the Mortgage Portfolio Insurance
Policy is annexed hereto as Exhibit 99.1.
Also in connection therewith, on January 4, 2001, on behalf of the Trust the
Trustee entered in to a yield maintenance agreement dated as of January 4,
2001 (the "Yield Maintenance Agreement"), from Westdeutsche Landesbank
Girozentrale, a bank organized under the laws of the State of North Rhine -
Westphalia acting through its New York branch ("WestLB"). The Yield
Maintenance Agreement is annexed hereto as Exhibit 99.2.
Also in connection therewith, on January 4, 2001, on behalf of the Trust the
Trustee received three certificate guaranty insurance policies, one with
respect to each of the Class A-1, Class A-2 and Class A-3 Certificates
(together, the "Certificate Guaranty Policies"), from MBIA Insurance
Corporation ("MBIA"). The Certificate Guaranty Policies are annexed hereto as
Exhibit 99.3.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial
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Information and Exhibits.
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(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
99.1. The Mortgage Portfolio Insurance Policy, dated as of
January 4, 2001, issued by GEMICO.
99.2. The Yield Maintenance Agreement, dated as of January 4, 2001,
by and betweeen WestLB and the Trustee.
99.3. The Certificate Guaranty Policies, issued on January 4, 2001,
issued by MBIA.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DLJ MORTGAGE ACCEPTANCE CORP.
By: /s/ Helaine Hebble
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Name: Helaine Hebble
Title: Senior Vice President
Dated: January 17, 2001
<PAGE>
Exhibit Index
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Exhibit Page
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99.1 The Mortgage Portfolio Insurance Policy, dated
as of January 4, 2001, issued by GEMICO.
99.2 The Yield Maintenance Agreement, dated as of
January 4, 2001, by and betweeen WestLB and the
Trustee.
99.3 The Certificate Guaranty Policies, issued on
January 4, 2001, issued by MBIA.
<PAGE>
Exhibit 99.1
GENERAL ELECTRIC MORTGAGE
INSURANCE CORPORATION
6601 Six Forks Road
Post Office Box 177800
Raleigh, North Carolina 27619
(919) 846-4100
Toll Free (800) 334-9270
GENERAL ELECTRIC MORTGAGE INSURANCE CORPORATION
MORTGAGE PORTFOLIO INSURANCE POLICY
Subject to the terms and conditions herein, General Electric Mortgage
Insurance Corporation (the "Company") agrees to pay to the Insured, in
consideration of the premiums or premium to be paid as hereinafter specified,
and in reliance upon the representations made in any Application for coverage
under this Policy, any Loss due to the Default by a Borrower on any Loan
identified in the attached Schedule.
Insured: Chase Manhattan Bank Trust Company
One Liberty Place
1650 Market Street, Room 5210
Philadelphia, PA 19103
Policy Number: 6189
Effective Date of Policy: Janaury 4, 2001
Fill-Up Period (If Applicable): N/A
Term: Monthly Renewal
Initial Premium: [on file with Company]
Renewal Premium: [on file with Company]
Due Date for Initial Premium: 1/08/01
Total Initial Principal Balances: $385,430,988.76
Loan Coverage Percentage: As set forth on the Schedule hereto. (Schedule A)
Aggregate Loss Percentage (If Applicable): N/A
Aggregate Loss Limit (If Applicable): N/A
Deductible Amount (If Applicable): N/A
Securities Issue (If Applicable): DLJ ABS 2000-7
Loan-to-Value Ratio of Loans Requiring Primary Policy, Coverage Percentage
for Primary Policy and Period of Primary Coverage: N/A
Per Loan Loss Percentage: N/A
Terms and Conditions of Policy:
Endorsements: [on file with Company]
<PAGE>
Table of Contents
Supplemental Mortgage Portfolio Insurance Policy
1 Definitions
1.1 Access
1.2 Aggregate Loss
1.3 Aggregate Loss Limit
1.4 Aggregate Loss Percentage
1.5 Application
1.6 Appropriate Proceedings
1.7 Approval of Coverage
1.8 Approved Sale
1.9 Borrower
1.10 Borrower's Own Funds
1.11 Claim
1.12 Claim Amount
1.13 Claim Commencement Date
1.14 Claim Settlement Period
1.15 Cooperative Security
1.16 Default
1.17 Environmental Condition
1.18 Fill-Up Period
1.19 Good and Merchantable Title
1.20 Initial Principal Balance
1.21 Insured
1.22 Lender
1.23 Loan
1.24 Loan Coverage Percentage
1.25 Insurance Effective Date
1.26 Loss
1.27 Misrepresentation
1.28 Original Appraisal
1.29 Outstanding Principal Balance
1.30 Perfected Claim
1.31 Person
1.32 Physical Damage
1.33 Policy
1.34 Policy Effective Date
1.35 Possession of the Property
1.36 Primary Insurer
1.37 Primary Policy
1.38 Property
1.39 Qualified
1.40 Residential
1.41 Schedule
1.42 Security
1.43 Servicer
1.44 Settlement Period
1.45 Title
1.46 Total Initial Principal Balance
1.47 Transaction
1.48 Value
2 Obtaining Coverage and Payment of Premiums
2.1 Application and Approval of Coverage
2.2 Representations of the Insured
2.3 Company's Remedies for Misrepresentation
2.4 Premiums and Term of Coverage
2.5 Termination for Nonpayment of Renewal Premium; Notice and Opportunity
for the Insured to Pay Renewal Premiums
2.6 Payment of Premiums
2.7 Continuation or Cancellation by the Insured of Coverage of a Loan
2.8 Cancellation of Policy by the Insured
2.9 Schedule to be Furnished to the Company
3 Changes in Various Loan Terms and Servicing; Co-ordination and
Duplication of Insurance Benefits
3.1 Loan Modifications
3.2 Assumptions
3.3 Change of Servicing
3.4 Loan Assignment
3.5 Co-ordination and Duplication of Insurance Benefits
4 Exclusions From Coverage
4.1 Balloon Payment
4.2 Effective Date
4.3 Incomplete Construction
4.4 Fraud, Misrepresentation and Negligence
4.5 Non-Approved Servicer
4.6 Physical Damage (Other than Relating to Pre-Existing Environmental
Conditions)
4.7 Pre-Existing Environmental Conditions
4.8 Down Payment
4.9 First Lien Status
4.10 Breach of the Insured's Obligations or Failure to Company with Terms
4.11 Exclusion Under Primary Policy
4.12 Primary Policy
4.13 Investor-Paid Coverage
5 Conditions Precedent to Payment of Claim
5.1 Maintenance of Primary Policy
5.2 Notice of Default
5.3 Monthly Reports
5.4 Company's Option to Accelerate Filing of a Claim
5.5 Voluntary Conveyance
5.6 Appropriate proceedings
5.7 Mitigation of Damages
5.8 Advances
5.9 Claim Information and other Requirements
5.10 Acquisition of Good and Merchantable Title Not Required
5.11 Procedures for the Company's Approval of a Sale of a Property by the
Insured
5.12 Collection Assistance
5.13 Subrogation Agreements
6 Loss Payment Procedure
6.1 Option
6.2 Exercise of Option; Insured's Obligations
6.3 Discharge of Obligation; Assignability
6.4 Loss After Property Disposition to Apply to Aggregate Loss Limit
7 Loss Payment Procedure
7.1 Filing of Claim
7.2 Calculation of Claim Amount
7.3 Payment of Loss; Company's Options
7.4 Aggregate Loss; Aggregate Loss Limit
7.5 Calculation of Settlement Period
7.6 Cooperative Security Redemption
8 Additional Conditions
8.1 Proceedings of Eminent Domain
8.2 Pursuit of Deficiencies
8.3 Subrogation
8.4 Policy for Exclusive Benefit of the Insured
8.5 Effect of Borrower Insolvency or Bankruptcy on Principal Balance
8.6 Arbitration of Disputes
8.7 Release of Borrower; Defenses of Borrower
8.8 Amendments; No Waiver; Rights and Remedies
8.9 No Agency
8.10 Assignments
8.11 Applicable Law and Conformity to Law
8.12 Notice
8.13 Reports and Examinations
<PAGE>
Terms and Conditions
1 Definitions
1.1 Access means access to the Property sufficient, in the
Company's reasonable judgment, to permit the Company or its
agent to evaluate the Property for purposes of determining
whether or not to exercise its Property Acquisition
Settlement Option under Section 7.3(a) of this Policy
1.2 Aggregate Loss means, at any given time, the total of all
Losses, including advance payments of Loss and partial
payments of Loss with respect to a Default, paid by the
Company, reduced by the net proceeds (not to exceed the Loss
paid by the Company on the applicable Loan) received by the
Company upon disposal of all Loans (if the Loan is acquired
by the Company in settlement of a Claim) and Properties
acquired by the Company. The aggregate loss shall also be
reduced by any other net recoveries made in its sole
discretion by the Company with respect to any Loan or the
related Property or Borrower. For purposes hereof, the term
"net proceeds" shall consist of the sale price received by
the Company, reduced by any expenses, payments or costs
incurred by the Company in the ownership, maintenance and
disposition of a Loan or a Property, including all expenses
of the type which would have been includable in a Claim for
Loss, brokerage commissions, title insurance expenses,
recording fees and other costs and expenses of closing the
sale of the Loan or the Property; and expenses regarding the
physical condition of the Property in order to make it ready
for sale.
1.3 Aggregate Loss Limit means the Total Initial Principal
Balance multiplied by the Aggregate Loss Percentage, as in
effect from time to time or such other amount set forth on
the face of this Policy, and as may be adjusted under
Section 2.3, and represents the maximum aggregate amount
payable by the Company under this Policy at the applicable
time the Aggregate Loss Limit is calculated. When the
Aggregate Losses paid by the Company under the Policy are an
amount equal to the Aggregate Loss Limit then in effect, the
liability of the Company to pay any additional Losses
ceases.
1.4 Aggregate Loss Percentage means that percentage identified
on the face of this Policy, as such percentage may be
adjusted and in effect from time to time as set forth on the
face of this Policy.
1.5 Application means a request for coverage, including
assumption of coverage, under this Policy for a Loan on a
form or in a format provided by the Company, and all other
statements, documents or information furnished to, or
required by, the Company by or from the Insured or any other
Person in connection with the insuring of the Loan.
1.6 Appropriate Proceedings means any legal or administrative
action by the Insured affecting either a Loan or title to a
Property, or, in the case of a cooperative unit, a
Cooperative Security and the related property, including:
a. Preserving a deficiency recovery by making a bid at the
foreclosure sale and pursuing a deficiency judgment
until the end of the Settlement Period, where
appropriate and permissible and where directed by the
Company; or
b. Enforcing the terms of the Loan as allowed by the laws
where the Property is located or applying the
Cooperative Security to the satisfaction of the
Borrower's obligation under a Loan including enforcing
the terms of the Loan; or
c. Acquiring Good and Merchantable Title to the Property,
as may be required under this Policy, but excluding
such title as may be acquired by a voluntary conveyance
from the Borrower; or
d. Asserting the Insured's interest in the Property, and,
in the case of a Cooperative unit, the related
Cooperative Security, in a Borrower's bankruptcy.
1.7 Approval of Coverage means the document issued by the
Company evidencing the Company's approval of a Loan or Loans
for insurance under this Policy, subject to the terms and
conditions contained in the form of such approval and in
this Policy.
1.8 Approved Sale means
a. a sale of a Property or, in the case of a cooperative
unit, a Cooperative Security, by the Borrower or the
Insured as a result of a Default to which the Company
has given prior approval;
b. a foreclosure or trustee's sale of a Property
in respect of a first lien in favor of the Insured,
including such a foreclosure or trustee's sale to a
third Person at a price equal to or exceeding the
amount specified by the Company to be bid by the
Insured at such sale or the redemption of the Property
by Borrower; or
c. the acquisition and subsequent disposition of a
Property or, in the case of a cooperative unit, a
Cooperative Security, by a Primary Insurer pursuant to
the terms of a Primary Policy.
1.9 Borrower means any Person legally obligated to repay the
debt obligation created by a Loan, including any co-signer
or guarantor of the Loan.
1.10 Borrower's Own Funds means moneys saved and/or earned by the
Borrower and gifts from family members to the Borrower where
there is no promise or expectation of repayment but, with
the exception of any amounts deposited into escrow that are
fully disclosed in writing to the Company prior to issuance
of a commitment evidencing the Company's offer to insure the
related Loan, does not mean a non-family gift or third-party
payment to the Borrower or to the Insured on behalf of the
Borrower, whether or not characterized as a gift, if such
non-family gift or third-party payment is used by the
Borrower either directly or indirectly to make payment to
the Insured.
1.11 Claim means the timely filed written request, made on a form
or in a format provided or approved by the Company, to
receive the benefits of this Policy.
1.12 Claim Amount means the amount calculated in accordance with
Section 7.2 of this Policy.
1.13 Claim Commencement Date means the date upon which the
Company initially receives from the Insured a Claim to
receive the benefits of this Policy with respect to a Loan.
1.14 Claim Settlement Period means the time period set forth in
Section 7.5 of this Policy during which the Company must
settle the Claim to the Insured.
1.15 Cooperative Security means the stock or membership
certificate evidencing an ownership interest in an
organization formed for the purpose of the cooperative
ownership of real estate, together with the proprietary
lease or occupancy agreement for such organization in favor
of the Borrower allowing exclusive occupancy and use of the
Property.
1.16 Default means the failure by a Borrower (a) to pay when due
one (1) or more monthly regular periodic payments due under
the terms of a Loan or (b) to pay all amounts due on
acceleration of the Loan by the Insured after breach by the
Borrower of a due-on-sale provision in the Loan, granting
the Insured the right to accelerate the Loan upon transfer
of title to, or an interest in, the Property and to
institute Appropriate Proceedings. Violation by the Borrower
of any other term or condition of the Loan which is a basis
for Appropriate Proceedings shall not be considered to be a
Default.
A Loan is deemed to be in Default for that month as of the
close of business on the installment due date for which a
scheduled monthly payment has not been made or as of the
close of business on the due date stated in the notice of
acceleration given pursuant to the due-on-sale provision in
the Loan or, in the case of a cooperative unit, under the
terms of the related proprietary lease or occupancy
agreement. The Loan will be considered to remain in Default
until filing of a Claim so long as such periodic payment has
not been made or such basis for Appropriate Proceedings
remains. For example, a Loan is "three (3) months in
Default" if the monthly installments due on January 1
through March 1 remain unpaid as of the close of business on
March 1 or if a basis for acceleration and Appropriate
Proceedings exists for a continuous period of three months.
1.17 Environmental Condition means the presence on, under or
inside the Property or, in the case of a cooperative unit,
the underlying real estate owned by the cooperative
organization of any "Hazardous Substance" as that term is
defined by the federal Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. ss.9601, et seq.,
as amended) or any similar state law, or any "Hazardous
Waste" or "Regulated Substance" as those terms are defined
by the federal Resource Conservation and Recovery Act (42
U.S.C. ss.6901, et seq., as amended) or any similar state
law.
1.18 Fill-Up Period means the period beginning and ending on the
dates specified on the face of this Policy, during which the
Insured must acquire and pay the purchase price for a Loan
and during which the Loan must be approved by the Company
for insurance under this Policy.
1.19 Good and Merchantable Title means title to a Property or, in
the case of a cooperative unit, the Cooperative Security,
free and clear of all liens, encumbrances, covenants,
conditions, restrictions, easements and rights of
redemption, except for any of the following or as permitted
in writing by the Company:
a. Any lien established by public bond, assessment or tax,
when no installment, call or payment of or under such
bond, assessment or tax is delinquent;
b. Any municipal and zoning ordinances and exceptions to
title waived by the regulations of federal mortgage
insurers and guarantors with respect to mortgages on
one-to-four family residences in effect on the date on
which the Loan was closed and all documents were
executed;
c. Any other impediments which will not have a materially
adverse effect on either the transferability of the
Property or, in the case of a cooperative unit, the
Cooperative Security, or the sale thereof to a bona
fide purchaser;
d. In the case of a cooperative unit, the lien of any
cooperative organization against the Cooperative
Security for assessments not yet due and payable;
e. In the case of a cooperative unit, the rights of the
cooperative organization including any and all rights
under the proprietary lease or occupancy agreement
under the by-laws of the cooperative organization or
with respect to restrictions on stock transfers or
transfers of the Cooperative Security; provided that
there exists no material default under the terms and
conditions of any such lease or agreement.
Good and Merchantable Title will not exist if (i) there is
any lien pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act, or similar
federal or state law, as in effect from time to time,
providing for liens in connection with the removal and
clean-up of environmental conditions, or if notice has been
given of commencement of proceedings which could result in
such a lien, or (ii) there are limitations on ingress and
egress to the Property or on use of utilities. Any action or
proceeding after a foreclosure sale relating to establishing
a deficiency judgment will not be considered in determining
whether the Insured has acquired Good and Merchantable
Title.
1.20 Initial Principal Balance means the unpaid principal balance
of a Loan at the Insurance Effective Date.
1.21 Insurance Effective Date means the date a Loan first becomes
insured under this Policy, as determined by the Company and
as the Company may notify the Insured, which shall be no
later than the end of the Fill-Up Period.
1.22 Insured means the Person designated on the face of this
Policy which must be the owner of the Loans, or subject to
Section 3.5, any Person (1) to whom this Policy and coverage
of all (but not fewer than all) Loans under this Policy has
been assigned, and (2) of whom the Company has been
notified.
Any Person becoming the Insured under this Policy shall be
subject to all of the terms and conditions of this Policy to
the same extent as any previous Insured hereunder including,
without regard to the extent of the knowledge or
responsibility of such Person, with respect to matters
occurring before such Person became an Insured.
1.23 Lender means the person who originated the Loan and was the
original mortgagee of the Loan.
1.24 Loan means any note, bond, or other evidence of indebtedness
secured by a mortgage, deed of trust, security agreement or
financing statement (in the case of a cooperative unit), or
other similar instrument, which constitutes or is equivalent
to a first lien or charge on a Property or, in the case of a
cooperative unit, the Cooperative Security and which the
Company has approved for insurance, which secures, is
represented by, or included in the Security, to which
coverage under this Policy has been extended, and which must
be included on the Schedule.
1.25 Loan Coverage Percentage means that percentage identified as
such on the face of this Policy.
1.26 Loan File means copies of all of the documents created or
received in connection with the consummation of the Loan,
including the Borrower's loan application, appraisal, credit
reports, HUD-1 settlement statement and title insurance
policy.
1.27 Loss means the liability of the Company with respect to a
Loan for payment of a Perfected Claim that is calculated in
accordance with Section 7.2, but subject to the Aggregate
Loss Limit. A Loss will be deemed to have occurred when a
Default on a Loan occurs, even though the amount of Loss is
not then either presently ascertainable or due and payable.
1.28 Misrepresentation means any misstatement or omission of a
fact material either to the Company's acceptance of the risk
or to the hazard assumed by the Company.
1.29 Original Appraisal means the appraisal obtained by or on
behalf of the Lender at the time the Loan was originated and
submitted with the Application to the Company, which
establishes the value and condition of the Property at such
time, including all construction plans and specifications,
if applicable.
1.30 Outstanding Principal Balance means the unpaid principal
balance of a Loan outstanding at any given time.
1.31 Perfected Claim means a Claim received by the Company which
contains all information or proof required by the Company
and for which all requirements of this Policy applicable to
payment of a Claim are satisfied or waived.
1.32 Person means any individual, corporation, partnership,
association or other entity.
1.33 Physical Damage means any tangible injury to a Property,
whether caused by accident, natural occurrence, or any other
reason, including damage caused by defects in construction,
land subsidence, earth movement or slippage, fire, flood,
earthquake, riot, vandalism or any Environmental Condition.
1.34 Policy means this contract of insurance and all
Applications, Approvals of Coverage, Endorsements and
Schedules that are incorporated in this Policy, related to
Loans insured under this Policy.
1.35 Policy Effective Date means the date specified on the face
of this Policy.
1.36 Possession of the Property means, if the Company elects to
acquire the Property, physical and undisputed occupancy and
control of the Property at the time of acquisition, subject
only, in the case of a cooperative security, to the rights
of the cooperative organization, including any and all
rights under the related proprietary lease or occupancy
agreement, under the by-laws of the cooperative
organization, or with respect to restrictions on stock
transfers or transfers of the Cooperative Security.
1.37 Primary Insurer means any mortgage guaranty insurance
company that has issued a Primary Policy with respect to a
Loan and is rated at least "AA" or its equivalent by two or
more nationally-recognized rating agencies as of the Policy
Effective Date.
1.38 Primary Policy means a policy insuring a Loan and in effect
prior to or as of the Policy Effective Date, deemed
acceptable to the Company, issued by a mortgage guaranty
insurance company or government agency or instrumentality,
approved by the Company, providing the coverage defined by
Section 5.1. A policy shall be deemed acceptable to the
Company if it has been approved as the standard form of
policy for insuring an individual mortgage loan sold to
Freddie Mac or Fannie Mae.
1.39 Property means a Residential real property and all
improvements thereon which secure a Loan, together with all
easements and appurtenances, all rights of access, all
rights to use common areas, recreational and other
facilities, and all of their replacements or additions;
provided that in the case of cooperative units, the
Borrower, by virtue of its interest in the Cooperative
Security that secures the Loan, has an exclusive right to
occupy such real property.
1.40 Qualified means the Company (i) is duly qualified under
applicable state laws and federal laws, if any, to write the
insurance provided by this Policy, and (ii) is rated at
least "AA" or its equivalent by two or more nationally
recognized rating agencies during the term of this Policy.
1.41 Residential means a type of building or a portion thereof
which is designed for occupancy by not more than four (4)
families, a single-family condominium, a unit in a planned
unit development or a cooperative unit designed for
single-family residential occupancy.
1.42 Schedule is the listing or listings of Loans insured under
this Policy, as amended from time to time to include
additional Loans, which shall be prepared and furnished to
the Company from time to time as provided in Section 2.9.
1.43 Security means the pool or group of loans, designated or
referred to on the face of this Policy, as identified by a
bond, certificate or other instrument.
1.44 Servicer means that Person acting on behalf of the Insured
(or on behalf of the Insured's designee, if any) to service
the Loan and of whom the Company has been notified and which
the Company has approved. The Servicer acts as the
representative of the Insured (and the Insured's designee,
if any) and will bind the Insured and its designee for all
purposes of this Policy, including providing information to
the Company, receiving any notices (except for notices to
the Insured as provided for in Sections 2.5 and 4.5), paying
premiums, accepting Loss payments, and performing any other
acts under this Policy. References in this Policy to a
Servicer's obligations will not be construed as relieving
the Insured or its designee of responsibility for the
Servicer's performance.
1.45 Settlement Period means the sixty (60) day period as
determined under Section 7.5, at the end of which a Loss is
payable by the Company; provided that if the Company pays a
Loss prior to expiration of such sixty (60) day period, the
Settlement Period ends with such payment.
1.46 Title means title to the Property as evidenced by an
executed trustee's or sheriff's deed or other evidence
(including, in the case of a cooperative unit, the stock or
membership certificate evidencing an ownership interest in
the Cooperative Security issued by the cooperative
organization for the Property) satisfactory to the Company
that the foreclosure sale has been completed, or that a
voluntary conveyance has been made by the Borrower, if a
voluntary conveyance is permitted by the Company pursuant to
Section 5.5 of this Policy.
1.47 Total Initial Principal Balance means the sum of the Initial
Principal Balances of all the Loans insured under this
Policy.
1.48 Transaction means the bond, security, or other type of
instrument or agreement that gives rise to the aggregation
of the Loans into a pool to be insured pursuant to the terms
and conditions of this Policy. A Transaction may arise
solely by designation or identification of the Loans as a
pool, without a transfer of ownership or securitization.
1.49 Value means the lesser of the sales price of a Property or,
in the case of a cooperative unit, the Cooperative Security
(only applicable in the case of a Loan to finance the
purchase of such Property or Cooperative Security) or
appraised value of the Property or, in the case of a
cooperative unit, the Cooperative Security as set forth by
the Company in the Approval of Coverage of Schedule.
As used herein, the masculine, feminine and neuter gender
and the singular and plural number shall each equally
include the other, as the context shall require.
2 Obtaining Coverage and Payment of Premiums
2.1 Application and Approval of Coverage - In order to insure a
Loan under this Policy, the Insured or a Person acting on
behalf of the Insured must submit to the Company a properly
completed Application. Approval of any Application will be
at the discretion of the Company and will be in the form of
an Approval of Coverage for coverage under the terms and
conditions of both this Policy and the Approval, as the case
may be and shall be entered onto the Schedule thereafter. In
order to be insured under this Policy, a Loan must be
acquired and paid for by the Insured and approved by the
Company during the Fill-Up Period (if applicable) or such
other date specified by the Company.
In lieu of such an Application and supporting statements,
documents and information submitted to the Company in
connection with insuring a Loan, the Company may accept an
alternative form of Application, containing more limited
information, including certifications by or on behalf of the
Insured as to characteristics of a Loan in lieu of
supporting statement, documents and information. The Company
shall be entitled to fully rely on such alternative
Application as submitted. Use of an alternative form of
Application shall not waive or change the other terms and
conditions of this Policy under which a Loan is insured or
the responsibility of the Insured for the accuracy of
statements, documents and information submitted by it or
other Persons to the Company as provided in this Policy.
If the Company declines to approve a mortgage loan, it will
not issue an Approval of Coverage, and it will notify the
Insured in writing of such declination, but the Company
shall not be required to notify the loan applicant. The
Insured or such other Person that is the originator of such
mortgage loan will be responsible for notifying the
applicant that the Company declined to approve the mortgage
loan if such notice to the applicant is required by
applicable law. Such notification will be made in compliance
with any applicable state or federal laws or regulations,
including the Equal Credit Opportunity Act and any other
similar law or regulation.
2.2 Representations of the Insured - The Insured represents to
the Company that:
a. all statements made and information provided to the
Company in an Application or in any Approval of
Coverage (including as such is related to continuation
of coverage upon assumption of a Loan), whether by it,
the Borrower, or any other Person (other than the
Company), have been made and presented for and on
behalf of the Insured; and
b. such statements and information are not false or
misleading in any respect as of the date(s) on which
they are made or provided and do not omit any fact
necessary in order to make such statements and
information not false or misleading in any respect as
of such date(s).
It is understood and agreed that such statements and
information in the aggregate are, and in certain instances
individually may be, material to the Company's decision to
offer, provide or so continue coverage of the related Loan;
the Company issues the related Approval of Coverage or
continues coverage in reliance on the accuracy and
completeness of such statements and information and without
any obligation to independently verify the statements and
information submitted to it; and the Company's reliance on
the representations in Section 2.2(a) and (b) above survive
the issuance of an Approval of Coverage or such continuation
of coverage.
Without otherwise limiting the scope of this Section 2.2, a
breach of Section 4.8 relating to down payment or of Section
4.13 relating to payment of premium by the investor will be
deemed a material misrepresentation for purposes of this
Section 2.2. The foregoing representations shall be
effective whether or not they are made by the Insured or
other Person with the intent to deceive or mislead, or with
the knowledge that they are not true and correct.
2.3 Company's Remedies for Misrepresentation - If any of the
Insured's representations made with respect to such Loan as
described in Section 2.2 are materially false or misleading
with respect to a Loan, the Company will have, at its
option, the right to defend against a Claim, or to the
extent permitted by applicable law, to cancel or rescind
coverage of such Loan under this Policy retroactively to
commencement of coverage (or if the misrepresentation occurs
with respect to continuation of coverage upon assumption of
a Loan, to so defend, cancel or rescind retroactively to the
date of such continuation). In the case of such cancellation
or rescission, the Company shall return at that time all
paid premiums applicable to such Loan retroactively to such
applicable date. In the case of rescission of coverage
retroactively to the Insurance Effective Date, the Aggregate
Loss Limit shall be adjusted as if such Loan had not been
insured.
2.4 Premiums and Term of Coverage
Delivery of this Policy shall serve as notice to the Insured
of the first premium due on a Loan. Payment of the
applicable first premium shall be a condition precedent to
coverage being initially extended to the Loan. Within the
period specified by the Company on the face of this Policy,
the Insured must forward to the Company such first premium.
In the event the Insured fails to timely pay the applicable
first premium for a Loan, the Company shall notify the
Insured of such failure, and of the amount due, and the
Insured shall have a period of thirty (30) days thereafter
in which to pay the amount due. If the Insured pays the
amount due within the time allowed, the coverage of such
Loan shall be effective as it would have been had the
Servicer timely paid such premium. If the Insured fails to
pay the amount due within the time allowed, coverage shall
not be extended to such Loan. Coverage shall remain in
effect for the period covered by the applicable first
premium. Tender of the first premium for a Loan will
constitute a representation for purposes of Section 2.2 by
the Insured that (a) any special conditions included by the
Company in the related Approval of Coverage have been
satisfied and that no payment which is then due under the
Loan is more than thirty (30) days past due, (b) during the
12 months preceding such tender not more than two (2)
payments due under the Loan were delinquent (i.e., more than
thirty (30) days past due) and (c) all periodic payments
have been made from the Borrowers Own Funds.
2.5 Termination for Nonpayment of Renewal Premium; Notice and
Opportunity for the Insured to Pay Renewal Premiums
The Company must give the Insured prior notice of the due
date for payment of the applicable renewal premium payable
for coverage of all Loans insured under this Policy. The
entire renewal premium for all Loans must be paid within
forty five (45) days of the due date for such payment. Such
premium shall be computed on the basis of the aggregate
applicable principal balance of all Loans, and irrespective
of whether a Loan is in Default or whether Good and
Merchantable Title for a Loan has been acquired by the
Insured (in either of which case the premium shall be
calculated on its principal balance which is as of a date no
later than the date of such Default). In the event the
Insured fails to timely pay the applicable renewal premium
for all such Loans, the Company shall notify the Insured of
such failure and of the amount due, and the Insured shall
have a period of thirty (30) days thereafter in which to pay
the amount due. Upon payment of the entire renewal premium
for all Loans within such grace period or period for payment
by the Insured, this Policy will be in effect for the
applicable period of coverage and a Default on a Loan
occurring within said grace period which is not cured, and
which results in a Claim being filed, will be covered.
If the entire renewal premium for all Loans is not paid
within the forty five (45) day period discussed in the
preceding paragraph or period for payment by the Insured,
the coverage of the Policy and the Company's liability as to
all Loans will terminate effective as of 12:01 a.m. on the
first day following the date through which the applicable
prior premium has been paid and as a result, any Defaults
existing as of such termination or future Defaults on any of
the Loans will not be covered under this Policy.
Notwithstanding the foregoing, at the option of the Company,
the Insured shall remain obligated to continue coverage in
effect, as required by Section 2.7 of this Policy, and pay
any renewal premium that is due.
2.6 Payment of Premiums
At the request of the Company, the Insured shall provide the
information and documentation upon which all premium
calculations are based; if the Insured fails to provide the
information and documentation requested by the Company, the
Company shall calculate the applicable premium based on the
information used for the most recent prior premium
calculation, with the Company's only refund obligation being
to refund any excess premium, without interest thereon, upon
the Insured providing such information (but only if provided
within twelve (12) months after the premium due date) as may
be necessary to compute the correct premium as of its due
date and without the Insured being relieved of its
obligation to pay any further premium if the premium so
calculated was less than the correct premium due. Except as
expressly provided in this Policy, there shall be no refund
of premium under this Policy. If the Aggregate Losses paid
by the Company under this Policy equal the Aggregate Loss
Limit, then the total premium due under this Policy is due
and shall remain due; provided, however, that the premium
shall continue to be calculated and paid in the manner
specified on the face of this Policy. The Company shall have
a right of offset for any such unpaid premium against any
payment of a Loss on any Loan.
The Insured acknowledges that the Company deposits premium
checks immediately upon receipt and agrees that the receipt
and deposit of a premium check by the Company after the time
specified in this Policy for receipt, does not constitute a
waiver of the requirements of this Policy for timely receipt
or an acceptance of premium by the Company. The Company will
have the right to return such late premium payment as
applicable to a Loan, but only within sixty (60) days after
receipt, in which case coverage will be canceled
retroactively to the applicable Insurance Effective Date for
a late initial premium, or to the last day of the period
covered by the previous premium payment for subsequent
premium payment which becomes due. Receipt, deposit and
retention of a premium check will not constitute a waiver of
any defenses with respect to any other matters which the
Company may have under this Policy.
2.7 Continuation or Cancellation by the Insured of Coverage of a
Loan
Subject to payment of the applicable premiums with respect
to the Loans insured under this Policy, coverage of a Loan
shall continue until, and automatically cease upon, the
first to occur of the following events:
a. The Loan is paid in full; or
b. The Company pays the Insured the Loss with respect to
the Loan or otherwise settles the Claim in accordance
with the terms and conditions of this Policy;
c. The Loan has been repurchased or otherwise removed from
the Transaction; or
d. The mortgage-related or mortgage-backed securities
issue, if any has been redeemed.
Except as a result of cancellation pursuant to Section 2.8
or except as coverage of the Loan is required to be
cancelled by the Insured under applicable law, the Insured
may not cancel coverage of a Loan.
In the event coverage does not continue and ceases for any
of the foregoing reasons, a Default existing at the time
coverage is discontinued or ceases shall remain covered
under this Policy, but the Company shall have no liability
for any Claims arising out of any future Default.
Notwithstanding coverage of such existing Default, the
provisions of Section 3.5 shall continue to apply and limit
assignment of coverage of a Loan.
Except as provided in Section 2.8 or as required by
applicable law, there shall be no refund of premium on
cancellation by the Insured of coverage of a Loan or if
coverage of a Loan is not continued.
2.8 Cancellation of Policy by the Insured - The Insured may
cancel this Policy upon thirty (30) days written notice
thereof to the Company if the Company shall cease to be
Qualified or the total outstanding unpaid principal balances
of all Loans has been reduced to no more than 10 percent
(10%) of the Total Initial Principal Balance. The Company
shall use diligent efforts to remain Qualified. There shall
be no other right of cancellation of this Policy by the
Insured. There shall be no refund of premium on cancellation
of this Policy by the Insured except if cancellation occurs
because the Company is not Qualified. In such case, a pro
rata refund shall be paid retroactively to the date of
cancellation.
In the event of cancellation under this Section 2.8, a
Default existing at the time that coverage is cancelled
shall not be covered under this Policy.
2.9 Schedule to be Furnished to the Company - Within thirty (30)
days after request by the Company during the Fill-Up Period,
and within ninety (90) days after the end of the Fill-Up
Period, the Insured shall deliver to the Company a listing
of mortgage loans, proposed for insurance under this Policy
and other information called for by the Schedule. Such
listing shall be consistent with the information contained
in the Company's records and shall be subject to whatever
changes are necessary to make the listing correct. Upon the
Company's acceptance of the listing and the information in
the listing, the Company shall issue the Schedule. If the
Insured fails to provide the listing within the required
time, the Company shall be entitled to prepare the Schedule
and the Schedule as prepared by the Company will be binding
on the Insured. In addition, the Insured shall, on a monthly
basis, provide the Company with a list of loans which have
been prepaid in full.
2.10 Loan Files - The Company shall have the right upon thirty
(30) days prior written notice to obtain from the Insured a
copy of the complete Loan File for any Loan insured
hereunder. If for any reason the Insured fails to provide
such a copy within the thirty (30) day period, the Company
may cancel coverage of the related Loan hereunder.
3 Changes in Various Loan Terms and Servicing; Co-ordination and
Duplication of Insurance Benefits
3.1 Loan Modifications - Unless advance written approval is
provided by, or obtained from, the Company, the Insured may
not make any change in the terms of a Loan, including the
borrowed amount, interest rate, term or amortization
schedule of the Loan, except as such change is permitted by
terms of the Loan without the approval of the Insured; nor
make any change in the Property or other collateral
(including, in the case of a cooperative unit, the
Cooperative Security) securing the Loan; nor release the
Borrower from liability on a Loan.
3.3 Assumptions - If a Loan is assumed with the Insured's
approval, the Company's liability for coverage under this
Policy will terminate as of the date of such assumption,
unless the Company approves the assumption in writing. The
Company will not unreasonably withhold approval of an
assumption. It is understood that coverage will continue,
and that the restriction of this Section 3.3 will not apply,
if under the Loan or applicable law the Insured cannot
exercise a "due-on-sale" clause or is obligated to consent
to such assumption under the Loan or applicable law.
3.4 Change of Servicing - If the servicing rights for a Loan are
sold, assigned or transferred, coverage of the Loan
hereunder will continue provided that written notice of the
next Servicer is given to the Company and the new Servicer
is approved in writing by the Company, and subject,
nevertheless, to all of the terms and conditions hereof and
to all defenses which the Company may have had prior to any
such sale, assignment or transfer. The Company shall be
automatically deemed to have approved as a Servicer any
person to whom the Company has issued a master policy, which
has not been canceled, providing for residential mortgage
guaranty insurance. Nothing in this Section 3.4 shall
relieve the Insured of its obligation to pay premiums under
Sections 2.4 and 2.5 hereof.
3.5 Loan Assignment - Unless advance written approval is
obtained from the Company (which approval shall be in the
sole and absolute discretion of the Company), or this Policy
and coverage of all Loans under this Policy are assigned to
an Insured as described in Section 1.21, if a Loan is sold,
assigned, or transferred by the Insured, the coverage of
such Loan under this Policy may not and will not be assigned
to such purchaser, assignee, or transferee and coverage of
such Loan under this Policy shall automatically terminate
upon such purchase, assignment or transfer. If the Company
does not give such approval, the Company shall thereafter,
for all purposes under this Policy, including for purposes
of calculating premiums and the Aggregate Loss Limit,
disregard such sale, assignment or transfer, and continue to
treat the Insured as the only person with any interest in
such Loan and the Insured agrees that it and any such
purchaser, assignee, or transferee shall make all such
arrangements as between or among themselves as may be
appropriate in light of this restriction on the transfer of
such coverage.
3.6 Co-ordination and Duplication of Insurance Benefits - The
coverage under this Policy shall be excess over any Primary
Policy and any other insurance that may apply to the
Property or to the Loan, regardless of the type of or the
effective date of such other coverage.
4 Exclusions From Coverage
The Company will not be liable for, and this Policy will not apply
to, extend to or cover the following:
4.1 Balloon Payment - Any Claim arising out of or in connection
with the failure of the Borrower to make any payment of
principal and/or interest due under a Loan, (a) as a result
of the Insured exercising its right to call the Loan (other
than when the Loan is in Default) or because the term of the
Loan is shorter than the amortization period, and (b) which
is for an amount more than twice the regular periodic
payments of principal and interest that are set forth in the
Loan (commonly referred to as a "balloon payment"). This
exclusion will not apply if the Insured, the owner of the
Loan, or other person acting on either's behalf offers the
Borrower, in writing, a renewal or extension of the Loan or
a new loan which (i) constitutes a first lien, (ii) is at
rates and terms generally prevailing in the marketplace for
similar loans (but otherwise subject to Section 3.1), (iii)
is an amount not less than the then outstanding principal
balance, (iv) has no decrease in the amortization period,
and (v) is offered regardless of whether the Borrower is
then qualified under the Insured's or owner's underwriting
standards. This exclusion also will not apply if the
Borrower is notified of the availability of such renewal or
extension of the Loan or new loan and does not accept the
renewal, extension or new loan.
4.2 Effective Date - Any Claim resulting from a Default existing
at the Insurance Effective Date or occurring after lapse or
cancellation of coverage of a Loan.
4.3 Incomplete Construction - Any Claim made before construction
of the Property or, in the case of a cooperative unit, of
the underlying real estate owned by the cooperative
organization, is completed in accordance with the applicable
construction plans and specifications or if the Property is
not completed in accordance with the construction plans and
specifications upon which the Original Appraisal was based.
4.4 Fraud, Misrepresentation and Negligence - (a) Any Claim
involving or arising out of any fraudulent, criminal or
knowingly wrongful act or out of any Misrepresentation by
the Borrower, the Insured, the Servicer or any agent or
employee of the Insured or the Servicer.
(b) Any Claim where there was negligence by the Insured (or
Person which originated the Loan) with respect to the Loan,
which (1) was material to either the acceptance of the risk
or the hazard assumed by the Company; (2) materially
contributed to the Default resulting in such Claim; or (3)
increased the Loss, except that if the Company can, in its
opinion, reasonably determine the amount of such increase,
such Claim will not be excluded, but the Loss will be
reduced to the extent of such amount.
4.5 Non-Approved Servicer - Any Claim occurring when the
Servicer, at time of Default or thereafter, was not approved
by the Company. In the event that the Company determines to
withdraw approval with respect to a Servicer, if the owner
of a Loan has given to the Company notice that the Servicer
is responsible for servicing that Loan for the owner, the
Company shall give the owner of the Loan written notice of
the Company's decision to withdraw approval of the Servicer
and allow the owner ninety (90) days from the date of such
notice in which to complete a transfer of the servicing
rights to the Loan to a Servicer approved by the Company.
For purposes of this Section 4.5, the Insured shall be
deemed to be the owner of the Loan unless the Company has
been notified in writing of some other owner.
4.6 Physical Damage (Other than Relating to the Pre-Existing
Environmental Conditions) - Any Claim where, at any time
after the Insurance Effective Date, Physical Damage to a
Property and/or, in the case of a cooperative unit, to the
underlying real estate owned by the cooperative organization
(other than reasonable wear and tear), occurs or manifests
itself subject to the following provisions:
a. This exclusion shall not apply if the Company in good
faith determines that the aggregate cost of restoring
all such Physical Damage is less than fifteen hundred
dollars ($1,500), or such higher amount as the Company
may provide from time to time. For purposes of this
Section 4.6, the aggregate cost of restoring the
Physical Damage shall include Physical Damage to the
Property and, in the case of a cooperative unit, the
underlying real estate owned by the cooperative
organization.
b. This exclusion shall not apply if the Insured has
restored the Property and/or, in the case of a
cooperative unit, the underlying real estate owned by
the cooperative organization in a timely and diligent
manner to its condition (except reasonable wear and
tear) as of the Insurance Effective Date. In lieu of
requiring restoration of the Property and/or, in the
case of a cooperative unit, the underlying real estate
owned by the cooperative organization, the Company may,
at its option, reduce the Claim Amount by an amount
equal to the cost of such restoration as such cost
shall be determined by the Company.
c. For purposes of this Section 4.6, the Property and/or,
in the case of a cooperative unit, the underlying real
estate owned by the cooperative organization subject to
restoration will consist only of the land, improvements
or personal property deemed part of the real property
under applicable law; and chattel items affixed to the
real property and identified in the appraisal of the
Property and/or, in the case of a cooperative unit, the
underlying real estate owned by the cooperative
organization at the time the Loan was made, whether or
not they are deemed part of the real property.
d. Cost estimates relied upon by the Company in connection
with this Section 4.6 shall be provided in writing by
an independent party selected by the Company. The
Company will furnish the Insured with any such written
cost estimates, if requested by the Insured.
4.7 Pre-Existing Environmental Conditions - Any Claim where
there is an Environmental Condition which existed on the
Property and/or, in the case of a cooperative unit, the
underlying real estate owned by the cooperative organization
(whether or not known by the Person submitting an
Application for coverage of the Loan) as of the Insurance
Effective Date, subject to the following provisions:
a. This exclusion will not apply if the existence of such
Environmental Condition, or the suspected existence of
such Environmental Condition, was specifically
disclosed to the Company in the Application relating to
the Property.
b. This exclusion will apply only if such Environmental
Condition (1) was a principal cause of the Default, and
(2) has made the principal Residential structure on the
Property uninhabitable. A structure will be considered
"uninhabitable" if generally recognized standards for
residential occupancy are violated or if, in the
absence of such standards, a fully informed and
reasonable person would conclude that such structure
was not safe to live in without fear of injury to
health or safety.
4.8 Down Payment - Any Claim involving a Loan which is for the
purchase of the Property or, in the case of a cooperative
unit, the related Cooperative Security, and for which the
Borrower did not make a down payment as described in the
Application.
4.9 First Lien Status - Any Claim, if the mortgage, deed of
trust or other similar instrument executed by the Borrower
and insured hereunder did not provide the Insured at
origination with a first or equivalent lien on the Property
or, in the case of a cooperative unit, the related
Cooperative Security.
4.10 Breach of the Insured's Obligation or Failure to Comply with
Terms - Any Claim resulting from a Default occurring after
any breach by the Insured of the obligations, or failure to
comply with the conditions, set forth in this Policy that is
material to either the acceptance of the risk or the hazard
assumed by the Company or that materially contributes to the
Default that results in a Claim, with respect to the Loan
which has gone into Default.
4.11 Exclusion Under Primary Policy - Any Claim to the extent the
related claim was excluded under any Primary Policy.
4.12 Primary Policy - With respect to any Claim, and subject to
Section 5.1, the amount of the full percentage option claim
payment which the insurer under any Primary Policy should
have paid, but which was not paid, disregarding the reason
or cause for the denial or failure of such insurer to pay
under such Primary Policy, or whether the Insured fails to
obtain a Primary Policy as required by Section 5.1.
4.13 Investor-Paid Coverage - With respect to any Loan, if (a)
the Borrower is charged a separate or identifiable amount
for the premium payable under this Policy, or if escrow
funds of the Borrower are used, to reimburse the Insured,
Servicer or other Person paying the premium to the Company
and if said premium is not paid from the funds of the
Insured or the Servicer, and (b) the Borrower, directly or
indirectly pays for such premium, including by an interest
rate or other charges which are higher than the interest
rate or other charges applicable to mortgage loans which are
not similarly insured.
5 Conditions Precedent to Payment of Claim
It is a condition precedent to the Company's obligation to pay a Loss
that the Insured comply with all of the following requirements:
5.1 Maintenance of Primary Policy - With respect to any Loan
insured by a Primary Policy, the Insured is required to
maintain the Primary Policy. Notwithstanding the foregoing,
if a Primary Policy is required but there is no Primary
Policy in force, the Company shall accept the Claim and
compute the Loss as if such a Primary Policy were in force
as provided in Section 7.2; provided, further, that the
Company shall not be liable pursuant to this Policy for any
portion of such Primary Policy claim.
It is the primary responsibility of the Insured to provide
appropriate servicing and mitigation of delinquencies
through its Primary Policy, if applicable. The Insured shall
not take, or fail to take, any action which would impair its
rights under a Primary Policy unless it shall first have
given prompt written notice to the Company of any conflict
between the Primary Policy and this Policy or any
circumstance under which its rights under the Primary Policy
might be impaired, in which case the Company may direct the
Insured to take or not take action, provided that the
Insured's rights under the Primary Policy are not
prejudiced. The risk of collection of a claim payment under
any Primary Policy and the risk of the insolvency of the
issuer of any Primary Policy are risks of the Insured and
are not covered under this Policy.
5.2 Notice of Default - The Insured must give the Company
written notice:
a. Within forty-five (45) days of the Default, if it
occurs when the first payment is due under the Loan; or
b. Within ten (10) days after:
1. The date when the Borrower has become no more than
three (3) months in Default on the Loan; or
2. The date when any Appropriate Proceedings which
affect the Loan or the Property, or, in the case of
a cooperative unit, the Cooperative Security, or
the Insured's or Borrower's interest therein have
been started;
whichever occurs first.
If the Insured fails to give the notice of Default to the
Company within the time period specified in this Section
5.2, any additional interest accruing or advances incurred
during the period of such failure shall not be includable in
the Claim Amount.
5.3 Monthly Reports - Following a notice of Default on a Loan,
the Insured shall furnish the Company with monthly reports
in any form approved by the Company on the status of the
Loan, the status of any Appropriate Proceedings and on the
servicing efforts undertaken to remedy the Default. These
monthly reports shall continue until the Borrower is no
longer in Default or a Claim has been filed with the
Company.
5.4 Company's Option to Accelerate Filing of a Claim - At any
time following a notification of Default on a Loan, and
before the Insured has obtained Good and Merchantable Title
to the Property, the Company, directly or through its
assignee (as purchaser of the Loan), shall have the right to
purchase the Loan from the Insured, free and clear of all
liens, claims or encumbrances, for a purchase price equal to
the Loss calculated under Section 7.3(a) of this Policy,
(but without deduction for a Primary Policy payment which
has not yet become payable) and under the following terms
and conditions:
a. Within twenty (20) days after notice to the Insured or
such longer period specified by the purchaser in its
notice) that the Company or its assignee has elected to
purchase the Loan pursuant to this Section 5.4, the
Insured shall tender and deliver or cause to be
delivered to the purchaser, to be held in escrow by the
purchaser against receipt of the purchase price as set
forth herein above within ten (10) days after such
tender and delivery of all of the following:
1. one or more assignments (as shall be necessary or
appropriate) to the purchaser, containing customary
representations and warranties, duly and properly
executed and in recordable form, of all of the
Insured's ownership right, title and interest in
and to the Loan and related documents (including a
Primary Policy) and, unless expressly specified as
being not subject to assignment or transfer,
seller/servicing agreements relating to the Loan,
but excluding any rights under the Insured's
agreement with another Person to provide credit
enhancement under a participating financial
institution agreement or similar agreement between
the Insured and such Person;
2. the note, bond or other instrument evidencing the
Loan, properly endorsed in blank;
3. an assignment, to the purchaser, of coverage with
respect to such Loan under this Policy, subject to
all of the terms and conditions contained herein;
and
4. any and all documents executed or delivered by or
to the Borrower under, or any holder of, such Loan,
including the following:
i) originals (or, if publicly recorded, certified
copies) of mortgages, deeds of trust or other
security instruments or assignments thereof;
ii) originals (or duplicates acceptable to the
Company) of policies of title insurance or
opinions of title and surveys;
iii) originals (or duplicates acceptable to the
Company) of certificates and/or policies
evidencing private mortgage insurance and
hazard insurance; and
iv) copies of state and/or federal disclosure
and/or consumer credit documents.
b. Upon purchase of the Loan by the purchaser pursuant to
the foregoing terms, the Insured shall have no further
right to payment of Loss under this Policy with respect
to such Loan. Payment to an Insured of the amount
specified herein shall be a full and final discharge of
the Company's obligations to such Insured with respect
to such Loan. The Company shall have the right to
assign its right to purchase a Loan pursuant to this
Section 5.4 to any Person, subject to the terms and
conditions hereof.
5.5 Voluntary Conveyance - The Insured may only accept a
conveyance of the Property or, in the case of a cooperative
unit, the Cooperative Security from the Borrower in lieu of
foreclosure or other proceeding if the prior written
approval of the Company has been obtained. Such approval
shall not be considered as an acknowledgement of liability
by the Company with respect to such Loan.
5.6 Appropriate Proceedings - The Insured must begin Appropriate
Proceedings no later than when the Loan becomes six (6)
months in Default unless the Company provides written
instructions that some other action be taken. Such
instructions may be general or applicable only to specific
Loans. The Company reserves the right to direct the Insured
to institute Appropriate Proceedings at any time after
Default. When either defending against or bringing
Appropriate Proceedings, the Insured must report their
status to the Company as reasonably and expeditiously as
possible.
In conducting Appropriate Proceedings, the Insured must:
a. Diligently pursue the Appropriate Proceedings once they
have begun;
b. Apply for the appointment of a receiver and assignment
of rents, if permitted by law and requested by the
Company;
c. Furnish the Company with copies of all notices and
pleadings filed or required in the Appropriate
Proceedings, except as the Company may waive such
requirement in writing;
d. Bid an amount at the foreclosure sale in accordance
with the foreclosure bidding guidelines issued by the
Company; provided that, if the Company has not issued
such guidelines, the Insured may bid the amount
necessary to acquire the Property; and
e. Act so that its ability to preserve, transfer and
assign to the Company its rights against the Borrower
is not impaired and so that the rights of the Company
under this Policy against the Borrower are not
adversely affected, including any rights to obtain a
deficiency judgment from the Borrower.
5.7 Mitigation of Damages - The Insured must, or must cause the
Servicer to, actively cooperate with and assist the Company
to prevent and mitigate the Loss, including good faith
efforts by the Insured to obtain a cure of the Default,
collect amounts due under the Loan, inspect and appraise the
Property and effectuate the early disposition of the
Property. The Company must administer this Policy in good
faith.
Without limiting the right of the Company to direct the
Insured with respect to disposition of the Property, the
Company may direct the Insured: to list the Property for
sale at a price to be established; to select the agents or
brokers with whom the Property is listed; without limiting
the Insured's obligation under this Policy to restore a
Property, to expend funds and complete work on the Property
for the purpose of making the Property ready for sale at the
listed price, provided that such expenditures are includable
in the Claim for Loss; to assist in obtaining access of the
Company to the Property; and to otherwise assist in the
prompt disposition of the Property, pursuant to an Approved
Sale at the price established by the Company. If the Company
so requests, the Insured shall permit the Company to
cooperatively assist the Insured in the collection of monies
due under the Loan, including activities such as obtaining
information from the Borrower, attempting to develop
repayment schedules acceptable to the Insured, conducting
Property inspections, and requesting appraisals of the
Property. The Insured shall make available to the Company
such information relating to the Insured's collection
efforts as the Company shall reasonably request.
5.8 Advances - The Insured must advance:
a. Normal and customary hazard insurance premiums and real
estate property taxes, in each case as due and payable;
b. Reasonable and necessary Property protection and
preservation expenses approved by the Company, which
shall not include expenditures to remove an exclusion
from coverage under Section 4;
c. The costs of engaging in foreclosure and eviction
proceedings (including moving costs where required by
law to be paid by the evicting party), reasonable
attorney's fees not exceeding three (3) percent of the
Outstanding Principal Balance and accumulated interest
due under the Loan, and court costs;
d. Reasonable expenses necessary for the protection and
preservation of the Property and, in the case of a
cooperative unit, the Cooperative Security, as approved
by the Company. Although advance approval is not
required, the Company reserves the right to disallow
advances reflecting such expenses upon payment of the
Claim if, in the Company's reasonable judgment, such
advances were not reasonable and necessary. Insureds
are therefore encouraged to seek the Company's prior
consent.
5.9 Claim Information and Other Requirements - the Insured must
provide the company with:
a. All information reasonably requested by the Company;
b. A completed form furnished by or acceptable to the
Company for settlement of a Claim;
c. If the Property is not being acquired by the Company:
(1) a copy of (i) an executed trustee's or sheriff's
deed (which may be unrecorded) conveying Good and
Merchantable Title to the Property or, in the case of a
cooperative unit, the Cooperative Security to the
Insured, or (ii) a deed from the Borrower (which may be
unrecorded) if a voluntary conveyance has been approved
by the Company, conveying to the Insured the title that
was required by the Company in the approval of the
conveyance; (2) a copy of the sales contract and
closing statement or evidence of sale pursuant to
foreclosure or the Primary Policy; and (3) such other
information requested by the Company evidencing an
Approved Sale of the Property;
d. If the Property is being acquired by the Company:
1. A recordable deed in normal and customary form
containing the customary warranties and covenants
conveying to the Company or its designee Good and
Merchantable Title to the Property or, in the case
of a cooperative unit, the Cooperative Security;
2. If required by the Company, a title insurance
policy acceptable to the Company or an attorney's
opinion of title acceptable to the Company,
confirming that the Insured has and can convey to
the Company Good and Merchantable Title to the
Property; and
3. Possession of the Property, but only if the Company
has required such Possession in writing; and
e. If requested by the Company, access to the Property
after completion of foreclosure, which may be requested
before or after filing of the Claim.
5.10 Acquisition of Good and Merchantable Title Not Required -
The Insured will not be required to acquire Good and
Merchantable Title to a Property if the Company requires an
early claim filing pursuant to Section 5.4.
5.11 Procedures for the Company's Approval of a Sale of a
Property by the Insured
a. The Insured must submit to the Company for approval any
offer to purchase a Property (including, in the case of
a cooperative unit, the Cooperative Security) which it
receives. The Company shall then promptly either
approve or direct the Insured to submit a counteroffer.
b. At the time it presents an offer, the Insured
must also provide the Company with a good faith
estimate of gross proceeds and expenses in sufficient
detail for the Company to calculate the estimated net
proceeds. The Company may require any changes to the
offer or direct the marketing of the Property
(including, in the case of a cooperative unit, the
Cooperative Security) or expenditures by the Insured
for restoration of the Property as a condition to its
approval.
c. If the Company approves the offer submitted by the
Insured, it must also advise the Insured of the
estimated net proceeds that it has calculated. The
estimated net proceeds calculated by the Company will
be the estimated gross sales proceeds to be received by
the Insured less all reasonable estimated expenses
submitted by the Insured and approved by the Company in
its approval of the offer which have been or are
expected to be paid by the Insured in obtaining and
closing the sale of the Property and, in the case of a
cooperative unit, the Cooperative Security.
d. If the Company approves the offer, the Loss
payable by the Company under this Section 5.11 will be
the amount calculated under Section 6.3(b) for an
Approved Sale. The net proceeds for an Approved Sale
will be determined in the same manner as the estimated
net proceeds, but on the basis of the actual sales
proceeds. For purposes of computing a Loss, such actual
net proceeds shall not be less than the estimated net
proceeds calculated by the Company or as otherwise
approved by the Company.
e. The Company shall not unreasonably withhold its
approval of expenses submitted to it after its approval
of an offer. Expenses paid to Persons employed or
controlled by the Insured or the Servicer of the Loan
or their internal costs will not be allowed in
calculation of either the estimated or actual net
proceeds.
f. If requested by the Company, the Insured shall advise
the Company of the name of the real estate broker or
other Person marketing the Property (including, in the
case of a cooperative unit, the Cooperative Security)
and authorize such broker or other Person to release
marketing information about the Property to the
Company, if requested by the Company.
g. The Insured shall actively cooperate with the Company
and comply with all reasonable requests and directions
of the Company in effecting a sale of the Property and,
in the case of a cooperative unit, the Cooperative
Security.
5.12 Collection Assistance - If the Company so requests, the
Insured shall permit the Company to cooperatively assist the
Insured in the collection of monies due under the Loan,
including obtaining information from the Borrower,
attempting to develop payment schedules acceptable to the
Insured, conducting Property inspections and requesting
appraisals of the Property.
5.13 Subrogation Agreements. The Insured shall execute and
deliver in a timely manner at the request of the Company
such instruments and papers and undertake such actions as
may be necessary to transfer and assign rights of recovery
to the Company in accordance with the provisions of Section
8.3 of this Policy.
6 Company Option to Acquire Loans After Default
6.1 Option.
At any time following a notification of Default on a Loan,
and before the Insured has obtained Title to the Property
or, in the case of a cooperative unit, the Cooperative
Security, the Company or its assignee (which may
collectively be referred to in this Section 6 as the
"Purchaser") shall have the right to purchase the Loan from
the Insured, on a servicing-released basis, free from all
liens, claims or encumbrances, for a purchase price equal to
the sum of:
(a) The Outstanding Principal Balance;
(b) Any accumulated unpaid interest thereon computed at the
contractual rate specified in the Loan (exclusive of
delinquency charges and penalty rates and not
compounded); and
(c) Amounts expended by the Insured pursuant to Section 5.8
(and not reimbursed or covered by amounts contained in
any related escrow account) for payment of permitted
advances.
6.2 Exercise of Option; Insured's Obligations.
Within twenty (20) days after notice to the Insured (or such
longer period specified by the Purchaser in its notice) that
the Purchaser has elected to purchase the Loan pursuant to
Section 6.1 of this Policy, the Insured shall tender and
deliver or cause to be delivered to an escrow agent
designated by the Purchaser, against receipt of the purchase
price as set forth in Section 6.1 above:
(a) One or more assignments (as shall be necessary or
appropriate) to the Purchaser, containing customary
representations and warranties, duly and properly
executed and in recordable form, of all of the
Insured's ownership right, title and interest in and to
the Loan, the Cooperative Security (in the case of a
cooperative unit) and related documents and, unless
otherwise agreed to between the Purchaser and the
Insured, sale and servicing transfer agreements
containing such representations, warranties and
covenants as the Purchaser shall reasonably require;
(b) The note, bond or other instrument evidencing the Loan,
properly endorsed in blank;
(c) An assignment to the Purchaser of coverage under this
Policy and the Primary Policy, if any, subject to all
of the terms and conditions contained herein and
therein;
(d) In the case of a cooperative unit, the certificates or
shares, and the proprietary lease or occupancy
agreement which constitutes the Cooperative Security
for the Loan; and
(e) The originals (or in the case of recorded documents
which have not been returned by the recording office,
certified copies) of any and all documents delivered to
the Lender under such Loan, and copies of all documents
delivered by the Borrower or by the Borrower to third
parties under such Loan (if copies were delivered to
the Lender), including, without limitation, the
following:
(i) Mortgages, deeds of trust, security agreements,
stock power or pledge, financing statements or
other security instruments;
(ii) Policies of title insurance or opinions of title
and surveys;
(iii) Certificates and/or policies evidencing private
mortgage insurance and hazard insurance;
(iv) State and/or federal disclosure and/or consumer
credit documents; and
(v) Assignments of the foregoing.
6.3 Discharge of Obligation; Assignability. Upon purchase of the
Loan by the Purchaser pursuant to the terms of this Section
6, all rights of the Insured under this Policy shall be
transferred to the Purchaser, and payment to the Insured of
the amount specified in Section 6.1 shall be a full and
final discharge of the Company's obligations to such Insured
with respect to such Loan. The Company shall have the right
to assign its right to purchase a Loan pursuant to this
Section 6 to any Person, subject to the terms and conditions
hereof.
6.4 Loss After Property Disposition to Apply to Aggregate Loss
Limit. If the Company subsequently disposes of the Property
securing such Loan, the amount equal to the difference
between the purchase price paid pursuant to Section 6.1 and
the net proceeds from the sale by the Company or its
assignee of the Property shall be applied against the
Aggregate Loss Limit pursuant to Section 7.4.
7 Loss Payment Procedure
7.1 Filing of Claim
a. If a Primary Policy is required pursuant to Section 5.1
hereof, unless the Company directs acceleration of the
filing of a Claim under Section 5.4, the Insured must
submit and settle its claim under the Primary Policy
before a Claim may be filed under this Policy. If the
Insured negotiates a claim settlement on a basis other
than on conditions stated in the Primary Policy, the
Insured must obtain the prior written consent of the
Company to such settlement. If the Insured fails to
obtain the Company's consent, the Company shall not be
obligated to pay any difference between the negotiated
claim settlement and the original claim amount due to
the Insured under the Primary Policy. A Claim must be
filed with the Company on a form provided or approved
by the Company within sixty (60) days after the later
of the following and only after both of the following
conditions have been satisfied: (1) the date the claim
has been settled and paid under the Primary Policy; and
(2) either (i) the date the Insured has conveyed title
to the Property pursuant to an Approved Sale, (ii) the
date the Company notifies the Insured that it will
acquire the Property in settlement of the Claim, or
(iii) in the case of a cooperative unit, the redemption
of the Cooperative Security by the Borrower or a third
party, whichever is applicable.
If a claim under the Primary Policy has not been
settled within six (6) months after the Insured has
satisfied all reasonable requirements for filing of
such claim, the Claim under this Policy may,
notwithstanding any provision of this Policy to the
contrary, be filed and the Claim shall be calculated
and paid on the basis of the claim payment amount which
the Insured should have received under such Primary
Policy, as provided in Section 7.2(viii).
b. If a Primary Policy is not required pursuant to
Section 5.1 hereof, unless the Company directs
acceleration of the filing of a Claim under Section
5.4, a Claim must be filed with the Company on a form
provided or approved by the Company within sixty (60)
days after either of the following conditions,
whichever is applicable, have been satisfied: (1) the
Insured has conveyed title to the Property pursuant to
an Approved Sale or (2) the date the Company notifies
the Insured that it will acquire the Property in
Settlement of the Claim.
c. Within ninety (90) days after payment of the Claim by
the Company, the Insured shall be entitled to file a
supplemental Claim in an amount equal to the sum of the
advances made pursuant to Section 5.8 of this Policy
that were not included in the initial Claim, and such
supplemental Claim shall be paid by the Company within
sixty (60) days after receipt thereof. The failure to
file a supplemental Claim within this ninety (90) day
period shall be deemed to be an election by the Insured
to waive any rights to a supplemental Claim payment
under this Policy.
d. If the Insured fails to file a Claim within the
applicable time, the Insured will not be entitled to,
and the Company will not be obligated for, any payment
under this Policy for amounts, including additional
interest and expenses, which would otherwise be
claimable, but which accrue or are incurred after the
sixty (60) day period for filing of a Claim.
If the Insured fails to file a Perfected Claim within
one hundred eighty (180) days after the filing of the
Claim (or within such longer period of time as the
Company may allow in writing), the Insured will no
longer be entitled to payment of a Loss and the Company
will not be obligated to make any payment under this
Policy.
7.2 Calculation of Claim Amount - Subject to the requirement for
a Primary Policy, if any, and to the Aggregate Loss Limit
then applicable, the Claim Amount will be an amount equal to
the sum of:
a. The amount of unpaid principal balance due under the
Loan as of the date of Default without capitalization
of delinquent interest, penalties or advances; and
b. The amount of accrued and unpaid interest due
on the Loan, computed at the contract rate stated in
the Loan on the unpaid principal balance at the date of
Default (without adjustment for the proceeds of Primary
Policy coverage), through the date that the Loss is
paid by the Company, but excluding applicable late
charges, penalty interest or other changes to the
interest rate by reason of Default; and
c. The amount of advances incurred by the Insured under
Section 5.8 prior to filing of the Claim (except to
Persons employed or controlled by the Insured or the
Servicer of the Loan or their other internal costs)
provided that such advances must have first become due
and payable after the Default, and payment of such
advances must be prorated through the date the Loss is
paid by the Company.
less:
(i) The amount of all rents and other payments
(excluding net proceeds of an Approved Sale of
the Property or, in the case of a cooperative
unit, the Cooperative Security and the proceeds
of fire and extended coverage insurance)
collected or received by the Insured, which are
derived from or in any way related to the
Property;
(ii) The amount of cash remaining in any escrow
account as of the last payment date;
(iii) The amount of cash or other collateral to which
the Insured has retained the right of possession
as security for the Loan;
(iv) The amount paid under applicable fire and
extended coverage policies which is in excess of
the cost of restoring and repairing the
Property, if the Property is damaged, and which
has not been paid to the Borrower or applied to
the payment of the Loan as required by the terms
of the Loan;
(v) The amounts of any payments of Loss previously
made by the Company in connection with the Loan;
(vi) The net proceeds upon an Approved Sale of the
Property other than from acquisition pursuant to
a Primary Policy;
(vii) The amount of any due and unpaid premiums
payable under this Policy;
(viii) The greater of the amount of any claim payment
pursuant to a Primary Policy which the Insured
received, or which the Insured should have
received in order for the exclusion under
Section 4.11 or 4.12 of this Policy not to have
applied; and
(ix) Any other amounts claimed by the Insured to the
extent they are excluded from the Claim Amount
by reason of Section 4.
7.3 Payment of Loss; Company's Options - Within the Settlement
Period, but only if the Insured has satisfied all
requirements for a payment of Loss and if the Company has
received a Perfected Claim, the Company shall at its sole
option either:
a. Property Acquisition Settlement Option. If the Company
has elected to acquire the Property, pay to the Insured
as the Loss the Claim Amount calculated in accordance
with Section 7.2 for the Company's acquisition of the
Property; or
b. Approved Sale Option. If the Property or, in the case
of a cooperative unit, the Cooperative Security is sold
pursuant to an Approved Sale, pay to the Insured the
Claim Amount less the proceeds realized by the Insured
in connection with the Approved Sale of the Property or
Security. Such proceeds shall be calculated in the
manner set forth in Section 5.11 of this Policy; or
c. Percentage Guaranty Option. Allow the Insured to retain
title to the Property (or the Cooperative Security, in
the case of a cooperative unit) and Possession of the
Property, and pay to the Insured an amount equal to the
Claim Amount multiplied by the Loan Coverage Percentage
(such amount, the "Percentage Guaranty Amount");
provided that the Company shall deduct from such amount
the amount of any payments previously made by it to the
Insured in connection with the Loan and due and unpaid
premiums payable under this Policy through the date of
Default.
However, if a third party acquires Title to the
Property (or, in the case of a cooperative unit, the
Cooperative Security) at the foreclosure sale, unless
such acquisition occurs because the Insured failed to
follow the foreclosure bidding guidelines issued by the
Company (if any), then the Company shall pay the lesser
of: (i) the Percentage Guaranty Amount; and (ii) the
difference between the Claim Amount and the amount
realized by the Insured at the foreclosure sale.
7.4 Aggregate Loss; Aggregate Loss Limit. The Aggregate Loss
Limit of the Company is as set forth on the face of this
Policy whether Claims are paid pursuant to Section 6 or
pursuant to Section 7 of this Policy. When the total of all
Losses paid by the Company under this Policy is an amount
equal to the Aggregate Loss Limit, any liability or
obligation of the Company to pay any additional Claims for
Loss ceases until the Aggregate Loss is reduced below the
Aggregate Loss Limit, at which time this Section 7 will
again apply to all Perfected Claims until such time as the
Aggregate Loss Limit is again reached.
7.5 Calculation of Settlement Period
(a) Subject to the tolling provisions set forth in
subsections (b), (c) and (d) below, the Claim
Settlement Period shall expire sixty (60) days after
the Claim Commencement Date.
(b) Within twenty (20) days after the Claim Commencement
Date, the Company shall notify the Insured of any and
all additional materials or information that must be
submitted in order to perfect the Claim. If such
additional materials or information are requested, the
Claim Settlement Period shall be tolled from the date
of such request until such information or materials are
received by the Company.
(c) At any time prior to the closing of an Approved Sale,
upon the request of the Company, the Insured shall
provide the Company with Access to the Property. If the
Company requests such Access and it is unavailable, the
Claim Settlement Period shall be tolled until such time
as Access becomes available and the Insured has
notified the Company of the availability of such
Access.
(d) In the event that the Company notifies the Insured that
it intends to exercise its Property Acquisition
Settlement Option pursuant to Section 7.3(a) and the
Insured has not satisfied those conditions applicable
to such settlement option (including, but not limited
to, acquisition of Good and Merchantable Title and
Possession of the Property), then the Claim Settlement
Period shall not expire until the later of: (i) ten
(10) business days after the date upon which the
Insured notifies the Company that all necessary
preconditions applicable to the Property Acquisition
Settlement Option have been satisfied; and (ii) the
date on which the Claim Settlement Period would
otherwise expire.
(e) In the event that the Company does not settle the Claim
with the Insured within the Claim Settlement Period,
the Company shall notify the Insured of any pending
investigation with respect to the Loan, the Property
or, in the case of a cooperative unit, the Cooperative
Security and shall add to any later Claim paid with
respect to the Loan at issue, interest at the
contractual rate stated in the Loan accruing from the
expiration date of the Claim Settlement Period until
thirty (30) days after the date upon which the Insured
is notified of the results of the Company's
investigation.
7.6 Cooperative Security Redemption
The Insured shall, with reasonable promptness, whether such
redemption occurs either before or after the payment by the
Company to the Insured of the Claim with respect to the
related Loan, report to the Company the redemption of any
Cooperative Security related to a Loan insured under this
Policy, and shall provide the Company with evidence
reasonably satisfactory to the Company demonstrating the
amounts received by the Insured in redemption of the
Cooperative Security. In the event that the Company has paid
to the Insured a Claim under its percentage Guaranty Option
set forth in Section 7.3(c) of this Policy and the
Cooperative Security is subsequently redeemed by a Borrower,
the Insured shall reimburse the Company the amount of the
Company's Claim payment to the extent that the sum of the
Claim payment and the amount realized by the Insured from
the redemption of the Cooperative Security exceed the Claim
Amount.
8 Additional Conditions
8.1 Proceedings of Eminent Domain - In the event that part or
all of a Property is taken by eminent domain, or
condemnation or by any other proceedings by federal, state
or local governmental unit or agency, the Insured must
require that the Borrower apply the maximum permissible
amount of any compensation awarded in such proceedings to
reduce the principal balance of the Loan, in accordance with
the law of the jurisdiction where the Property is located.
8.2 Pursuit of Deficiencies - In addition to its customary Claim
payment, if the Company elects to pursue the deficiency and
the Insured elects not to participate, the Company will bear
all expenses (including court costs, attorney's fees and
other advances required of the Insured under Section 5.8 and
interest exclusive of delinquency charges and not
compounded) associated with preservation and pursuit of
deficiency rights in excess of those expenses associated
with the normal and customary foreclosure process and shall
reimburse the Insured for such amounts as part of its Claim
payment. If the Insured elects to pursue the deficiency
jointly with the Company, all such expenses and interest
shall be shared pro-rata. If the Insured elects to pursue
the deficiency and the Company elects not to participate,
only those expenses associated with the normal and customary
foreclosure process shall be includable in the Claim Amount
and no additional expenses associated with obtaining a
deficiency judgment shall be reimbursed by the Company.
8.3 Subrogation - The Insured shall cooperate with the Company
in any action or proceeding to enforce any rights of
recovery or other remedies which the Company may have or may
have acquired pursuant to this Section 8.3 against the
Borrower or any other Person and shall refrain from any
action, either before or after payment of a Loss hereunder,
that shall in any manner prejudice such rights.
If either the Insured or the Company desires to pursue a
deficiency judgment against a Borrower in connection with a
Loan insured under this Policy, the Party seeking to pursue
such deficiency judgment shall contact the other party to
determine whether the deficiency judgment should be sought
for the account of both parties or only for its own account;
provided, however, that if under the laws of the applicable
jurisdiction, pursuit of a deficiency judgment will
substantially increase the expenses associated with
foreclosure, the Insured shall contact the Company prior to
the initiation of a form of foreclosure proceedings that
would increase the costs of foreclosure to determine whether
a deficiency judgment is to be sought and, if so, whether
such deficiency judgment is to be sought for the account of
both parties or only for the account of the Company or the
Insured. In connection with the determination regarding
pursuit of a deficiency judgment, each of the Insured and
the Company must provide the other with all information it
may have concerning the assets of the Borrower, possible
defenses, and other information material to the decision.
If the parties determine that the deficiency judgment shall
be pursued solely for the account of the Company, the
Company shall be subrogated to all of the Insured's rights
of recovery against the Borrower and any other Person
relating to the Loan or the Property with respect to which
the Company has paid a Claim for Loss. If the parties
determine that the deficiency judgment shall be pursued for
the account of both parties, the Company shall be subrogated
pro-rata to such rights of recovery. If the parties
determine that the deficiency judgment shall be pursued
solely for the account of the Insured, or if the Company is
prohibited by law from pursuing the deficiency judgment, the
Company shall not be subrogated to any of the Insured's
rights of recovery against the Borrower and any other Person
relating to the Loan or the Property with respect to which
the Company has paid a Claim for Loss.
8.4 Policy for Exclusive Benefit of the Insured - An Approval of
Coverage, this Policy and the coverage provided under this
Policy will be for the sole and exclusive benefit of the
Insured and permitted assigns, and in no event will any
Borrower or other person be deemed a party to, or an
intended beneficiary of, such Approval of Coverage, this
Policy or any coverage hereunder.
8.5 Effect of Borrower Insolvency or Bankruptcy on Principal
Balance - If under applicable insolvency or bankruptcy law,
a Loan's principal balance secured by a Property is reduced
(after all appeals of such reduction are final or the time
for such appeals has lapsed without appeal), the portion of
such principal balance of the Loan not secured by the
Property, and related interest, will be includable in the
Claim Amount, as provided in this Section 8.5.
If a Default occurs on the Loan, the Insured has acquired
Good and Merchantable Title to the Property as required by
this Policy, and all other requirements for filing of a
Claim are complied with, the Insured will be entitled to
include in the Claim Amount (a) the amount of the principal
balance of the Loan which was deemed unsecured under
applicable insolvency or bankruptcy law, less any
collections or payments on such unsecured principal balance
received by the Insured, and (b) interest thereon at the
rate and as computed in Section 7.2, from the date of
Default giving rise to the Claim (but for no prior period),
whether payable directly or by an addition to the principal
balance which is includable in the Claim Amount, and (c)
reasonable and necessary expenses incurred by the Insured
which are associated with the amount by which the principal
balance of the Loan became unsecured.
8.6 Arbitration of Disputes
Unless prohibited by applicable law, all controversies or
claims arising out of or relating to this Policy, or the
breach, interpretation or construction thereof, shall be
settled by arbitration in accordance with the Title
Insurance Arbitration Rules of the American Arbitration
Association in effect on the date the demand for arbitration
is made; provided, however, that the Company and the Insured
both retain the right to seek a declaratory judgment from a
court of competent jurisdiction on matters of policy
interpretation.
The arbitrator(s) shall be neutral person(s) selected from
the American Arbitration Association's National Panel of
Arbitrators familiar with the mortgage lending or mortgage
guaranty insurance business. Any proposed arbitrator may be
disqualified during the selection process, at the option of
either party, if such proposed arbitrator is an employee,
officer or director of any mortgage guaranty insurer, or of
any bank, savings and loan or other entity engaged in the
origination, purchase or sale of mortgage loans or
mortgage-backed securities.
The arbitration shall be held at the time and place agreed
upon by the parties or, in the absence of such agreement and
at the option of the Insured, in the capital of the state in
which the Insured's principal place of business is located
or in the city nearest to the Insured's principal place of
business in which the American Arbitration Association
maintains an office. The decision of the arbitrator(s) shall
be made in accordance with the terms of this Policy and the
law specified in Section 8.11. The decision of the
arbitrator(s) shall be final and binding upon the Company
and the Insured, and judgment upon the award may be entered
in any court having jurisdiction thereof.
8.7 Release of Borrower; Defenses of Borrower - The Insured's
execution of a release or waiver of the right to collect any
portion of the unpaid principal balance of a Loan or other
amounts due under the Loan will release the Company from its
obligation with respect to such Loan to the extent and
amount of said release. If, under applicable law, the
Borrower successfully asserts defenses which have the effect
of releasing, in whole or in part, the Borrower's obligation
to repay the Loan, or if for any other reason the Borrower
is released from such obligation, the Company will be
released to the same extent and amount from its liability
under this Policy, except as provided by Section 8.5.
8.8 Amendments; No Waiver; Rights and Remedies; Use of Term
"Including"
a. The Company reserves the right to amend the terms and
conditions of this Policy from time to time; provided,
however, that any such amendment shall be effective
only after the Company has given the Insured written
notice thereof by endorsement setting forth the
amendment. Such amendment will only be applicable to
those Loans where the date of the related Approval of
Coverage was issued on or after the effective date of
the amendment.
b. No condition or requirement of this Policy will be
deemed waived, modified or otherwise compromised unless
that waiver, modification or compromise is stated in a
writing properly executed on behalf of the Company.
Each of the conditions and requirements of this Policy
is severable, and a waiver, modification or compromise
of one will not be construed as a waiver, modification
or compromise of any other.
c. No right or remedy of the Company provided for by this
Policy will be exclusive of, or limit, any other rights
or remedies set forth in this Policy or otherwise
available to the Company at law or equity.
8.9 No Agency - Neither the Insured, any Servicer, nor any of
their employees or agents (including the persons
underwriting the Loan on behalf of the Insured), will be
deemed for any reason to be agents of the Company.
8.10 Assignment - This Policy shall not be assigned or
transferred by the Insured without the prior written consent
of the Company, which consent shall be obtained from the
Company at least thirty (30) days prior to such assignment
or transfer. The failure of the Insured to obtain such prior
written consent of the Company shall render any proposed
assignment or transfer to be null and void. The Company, as
defined herein, shall include its successors and assigns.
8.11 Applicable Law and Conformity to Law - All matters under
this Policy will be governed by and construed in accordance
with the laws of the jurisdiction in which the office of the
original Insured under this Policy is located.
8.12 Notice - Unless otherwise directed by the Company, all
notices, Claims, tenders, reports and other data required to
be submitted to the Company by the Insured shall be: (i)
mailed postpaid; (ii) sent by overnight courier; (iii)
transmitted electronically, telephonically or via magnetic
tape in a manner approved by the Company; or (iv) sent by
facsimile transmission, to the Company at the following
address or facsimile number:
General Electric Mortgage Insurance Corporation
Post Office Box 177800
Raleigh, North Carolina 27619
Facsimile Number: (919) 846-4514
All notices to the Insured shall be: (i) mailed postpaid;
(ii) sent by overnight courier; (iii) transmitted
electronically, telephonically or via magnetic tape in a
manner approved by the Insured; or (iv) sent by facsimile to
the address on the face of this Policy.
Either party may notify the other of a change in address in
the same manner as provided for giving notice. Except as
otherwise specified herein, all notices, Claims, tenders,
reports and other data required to be submitted to the
Company or the Insured shall be deemed to have been given
upon actual receipt.
The Company and the Insured may mutually agree that notices
shall be sent to any additional Person. Except as expressly
agreed by the Parties, no liability shall be incurred by the
Company for failure to send notice to a Person other than
the Insured.
8.14 Reports and Examinations - The Company may request, and the
Insured must provide, such files, reports or information as
the Company may deem necessary pertaining to any Loan, and
the Company will be entitled to inspect the files, books and
records of the Insured or any of its representatives
pertaining to such Loan.
IN WITNESS WHEREOF, the Company has caused this Policy to be signed
by its duly authorized officers in facsimile or through other legally
authorized means to become effective as their original signatures and
binding on the Company by virtue of the countersignature by its duly
authorized representative.
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<PAGE>
General Electric Mortgage Insurance Corporation
6601 Six Forks Road
P.O. Box 177800, Raleigh, North Carolina 27619
--------------------------------
Mortgage Portfolio
Insurance Policy Endorsement
(Deductible)
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Policy Issued To: Attached to and Forming Part of Policy No.:
Effective Date of Endorsement:
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On those Loans that are insured under the above Policy, the Insured and the
Company hereby agree that the above-referenced Policy is amended and modified
as follows:
1. The first sentence of Section 1.2 is amended by adding after the phrase
"paid by the Company" the following phrase:
"and the Deductible Losses charged to the Deductible Amount under
any endorsement to this Policy"
2. For purposes of this Endorsement, the following terms shall be added as
Section 1.49 and 1.50 of this Policy:
1.40 Deductible Amount means an amount determined and calculated
as agreed upon by the Company and the Insured, taking into
account the term of the loan, the ratio of the principal
balance of the Loan to the Value of the Property, purpose of
the Loan and other factors as agreed to by the Company and
the Insured, which amount shall be calculated as provided on
the face of this Policy.
1.41 Deductible Loss means the Claim Amount as calculated under
this Policy as of the date of the closing of the Approved
Sale, which, for purposes of determining the Claim Amount,
shall be the date which is substituted for the date of
filing of the Claim.
3. A new Section 7.6 is added to the Policy as follows:
7.6 Deductible Losses
<PAGE>
Notwithstanding any other provision of this policy, the Company shall
have no liability to pay any Loss until, and except to the extent
that, the aggregate amount of the Deductible Loses shall exceed the
Deductible Amount. The Insured shall remain solely responsible for
all Deductible Losses up to the Deductible Amount.
The Deductible Loss for a Loan shall be calculated after Company has
finally determined and paid any Loss in respect of such Loan. A
Deductible Loss shall only be charged to the Deductible Amount if a
Claim for Loss would have been payable by the Company. The Insured
shall comply with all of the requirements of this Policy that would
be applicable if the Company were paying a Claim for Loss, including,
the requirements of Section 5.7 relating to the mitigation of the
Company's Loss. The Insured (or the servicer on behalf of the
Insured) shall file a Claim with the Company within thirty (30) days
after the end of the calendar quarter in which the Approved Sale
occurs. The Company shall process such Claim and determine the amount
of the Deductible Loss for a Loan within sixty (60) days after filing
of the Claim by the Insured.
Nothing herein contained will be held to vary, alter, waive or extend any of
the terms and conditions of the Policy, except as expressly set forth above.
All terms capitalized herein will have the meanings set forth in the Policy,
except as otherwise defined herein.
<PAGE>
Exhibit 99.2
(Multicurrency--Cross Border)
ISDA(R)
International Swaps and Derivatives Association, Inc.
MASTER AGREEMENT
dated as of January 4, 2001
WESTDEUTSCHE LANDESBANK GIROZENTRALE and DLJ ABS TRUST, SERIES 2000-7
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming
those Transactions.
Accordingly, the parties agree as follows:--
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than
by payment), such delivery will be made for receipt on the due date in
the manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date in
respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified in
this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a
reasonable objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to
make payment of any such amount will be automatically satisfied and discharged
and, if the aggregate amount that would otherwise have been payable by one
party exceeds the aggregate amount that would otherwise have been payable by
the other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party the excess
of the larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii)
above will not, or will cease to, apply to such Transactions from such date).
This election may be made separately for different groups of Transactions and
will apply separately to each pairing of Offices through which the parties
make and receive payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without
any deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y, evidencing
such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
(ii) Liability. If:--
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to
make any deduction or withholding in respect of which X
would not be required to pay an additional amount to Y under
Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount of
such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section 6(c),
be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment, at the Default Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed. If, prior to the occurrence or effective designation
of an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by
delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into and, in the case of the representations in Section 3(f), at all times
until the termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organized and validly existing under the laws
of the jurisdiction of its organization or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all
necessary action to authorize such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision
of its constitutional documents, any order or judgment of any court or
other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this Agreement
or any Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency
or official or any arbitrator that is likely to affect the legality, validity
or enforceability against it of this Agreement or any Credit Support Document
to which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of the
date of the information, true, accurate and complete in every material
respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and completed
in a manner reasonably satisfactory to such other party and to be
executed and to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified. as soon as reasonably practicable.
(b) Maintain Authorizations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of
this Agreement by a jurisdiction in which it is incorporated, organized,
managed and controlled, or considered to have its seat, or in which a branch
or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the
other party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is given
to the party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under
Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by
the party in accordance with this Agreement if such failure is not
remedied on or before the thirtieth day after notice of such failure is
given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document
or the failing or ceasing of such Credit Support Document to be in
full force and effect for the purpose of this Agreement (in either
case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each
Transaction to which such Credit Support Document relates without
the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however described)
in respect of such party, any Credit Support Provider of such party or
any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or becoming capable
at such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its
creditors; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding
or petition instituted or presented against it, such proceeding or
petition (A) results in a judgment of insolvency or bankruptcy or
the entry of an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed, discharged,
stayed or restrained in each case within 30 days of the institution
or presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all
or substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter; (8)
causes or is subject to any event with respect to it which, under
the applicable laws of any jurisdiction, has an analogous effect to
any of the events specified in clauses (1) to (7) (inclusive); or
(9) takes any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:--
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii)
below, and, if specified to be applicable, a Credit Event Upon Merger if the
event is specified pursuant to (iv) below or an Additional Termination Event
if the event is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party):--
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or
such Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
is required to be paid in respect of such Tax under Section 2(d)(i)(4)
(other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than
by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of
a party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity
(which will be the Affected Party) where such action does not constitute
an event described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and such action
does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions. If,
however, "Automatic Early Termination" is specified in the Schedule as
applying to a party, then an Early Termination Date in respect of all
outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section
5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as
of the time immediately preceding the institution of the relevant proceeding
or the presentation of the relevant petition upon the occurrence with respect
to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to
the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as the
other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and
obligations under this Agreement in respect of the Affected Transactions
to another of its Offices or Affiliates so that such Termination Event
ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i). Any such transfer by a party
under this Section 6(b)(ii) will be subject to and conditional upon the
prior written consent of the other party, which consent will not be
withheld if such other party's policies in effect at such time would
permit it to enter into transactions with the transferee on the terms
proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will
use all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) Right to Terminate. If:--
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect
to all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected
Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence
of written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in
the Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the
Schedule of a payment measure, either "Market Quotation" or "Loss," and a
payment method, either the "First Method" or the "Second Method." If the
parties fail to designate a payment measure or payment method in the Schedule,
it will be deemed that "Market Quotation" or the "Second Method," as the case
may be, shall apply. The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be subject to
any Set-off.
(i) Events of Default. If the Early Termination Date results from an
Event of Default:--
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent
of the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a
positive number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent
of the Unpaid Amounts owing to the Defaulting Party. If that amount
is a positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is
a negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event:--
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3),
if Market Quotation applies, or Section 6(e)(i)(4), if Loss
applies, except that, in either case, references to the Defaulting
Party and to the Non-defaulting Party will be deemed to be
references to the Affected Party and the party which is not the
Affected Party, respectively, and, if Loss applies and fewer than
all the Transactions are being terminated, Loss shall be calculated
in respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate
of loss and not a penalty. Such amount is payable for the loss of bargain
and the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of
the other party, except that:--
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to
any other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be
void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency
other than the Contractual Currency, except to the extent such tender results
in the actual receipt by the party to which payment is owed, acting in a
reasonable manner and in good faith in converting the currency so tendered
into the Contractual Currency, of the full amount in the Contractual Currency
of all amounts payable in respect of this Agreement. If for any reason the
amount in the Contractual Currency so received falls short of the amount in
the Contractual Currency payable in respect of this Agreement, the party
required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in the
Contractual Currency so received exceeds the amount in the Contractual
Currency payable in respect of this Agreement, the party receiving the payment
will refund promptly the amount of such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party
is entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency and will refund promptly to the other party any excess of
the Contractual Currency received by such party as a consequence of sums paid
in such other currency if such shortfall or such excess arises or results from
any variation between the rate of exchange at which the Contractual Currency
is converted into the currency of the judgment or order for the purposes of
such judgment or order and the rate of exchange at which such party is able,
acting in a reasonable manner and in good faith in converting the currency
received into the Contractual Currency, to purchase the Contractual Currency
with the amount of the currency of the judgment or order actually received by
such party. The term "rate of exchange" includes, without limitation, any
premiums and costs of exchange payable in connection with the purchase of or
conversion into the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the
party to which any payment is owed and will not be affected by judgment being
obtained or claim or proof being made for any other sums payable in respect of
this Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced
by a facsimile transmission) and executed by each of the parties or confirmed
by an exchange of telexes or electronic messages on an electronic messaging
system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange
of electronic messages on an electronic messaging system, which in each
case will be sufficient for all purposes to evidence a binding supplement
to this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organization of such party, the
obligations of such party are the same as if it had entered into the
Transaction through its head or home office. This representation will be
deemed to be repeated by such party on each date on which a Transaction is
entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other
party for and against all reasonable out-of-pocket expenses, including legal
fees and Stamp Tax, incurred by such other party by reason of the enforcement
and protection of its rights under this Agreement or any Credit Support
Document to which the Defaulting Party is a party or by reason of the early
termination of any Transaction, including, but not limited to, costs of
collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received, unless the date of that delivery (or attempted
delivery) or that receipt, as applicable, is not a Local Business Day or
that communication is delivered (or attempted) or received, as
applicable, after the close of business on a Local Business Day, in which
case that communication shall be deemed given and effective on the first
following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of
New York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the
Civil Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable
to the other party. The parties irrevocably consent to service of process
given in the manner provided for notices in Section 12. Nothing in this
Agreement will affect the right of either party to serve process in any other
manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the
grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which it or its revenues or assets might otherwise be entitled
in any Proceedings in the courts of any jurisdiction and irrevocably agrees,
to the extent permitted by applicable law, that it will not claim any such
immunity in any Proceedings.
14. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control"
of any entity or person means ownership of a majority of the voting power of
the entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) is respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorization, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified
as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed
in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to
such recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organized, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case
of tax matters, by the practice of any relevant governmental revenue
authority) and "lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and
foreign currency deposits) (a) in relation to any obligation under Section
2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so
specified, as otherwise agreed by the parties in writing or determined
pursuant to provisions contained, or incorporated by reference, in this
Agreement, (b) in relation to any other payment, in the place where the
relevant account is located and, if different, in the principal financial
centre, if any, of the currency of such payment, (c) in relation to any notice
or other communication, including notice contemplated under Section 5(a)(i),
in the city specified in the address for notice provided by the recipient and,
in the case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to such
Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or reestablishing any hedge or related trading position
(or any gain resulting from any of them). Loss includes losses and costs (or
gains) in respect of any payment or delivery required to have been made
(assuming satisfaction of each applicable condition precedent) on or before
the relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does
not include a party's legal fees and out-of-pocket expenses referred to under
Section 11. A party will determine its Loss as of the relevant Early
Termination Date or, if that is not reasonably practicable, as of the earliest
date thereafter as is reasonably practicable. A party may (but need not)
determine its Loss by reference to quotations of relevant rates or prices from
one or more leading dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or
by such party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting
Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions
that would, but for the occurrence of the relevant Early Termination Date,
have been required after that date. For this purpose, Unpaid Amounts in
respect of the Terminated Transaction or group of Terminated Transactions are
to be excluded but, without limitation, any payment or delivery that would,
but for the relevant Early Termination Date, have been required (assuming
satisfaction of each applicable condition precedent) after that Early
Termination Date is to be included. The Replacement Transaction would be
subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the
extent reasonably practicable as of the same day and time (without regard to
different time zones) on or as soon as reasonably practicable after the
relevant Early Termination Date. The day and time as of which those quotations
are to be obtained will be selected in good faith by the party obliged to make
a determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if
more than one quotation has the same highest value or lowest value, then one
of such quotations shall be disregarded. If fewer than three quotations are
provided, it will be deemed that the Market Quotation in respect of such
Terminated Transaction or group of Terminated Transactions cannot be
determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head
or home office.
"Potential Event of Default" means any event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or
to make an extension of credit and (b) to the extent practicable, from among
such dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated organized, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention
or withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or
imposed on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not
(in the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation
(whether present or future, contingent or otherwise, as principal or surety or
otherwise) in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter
entered into between one party to this Agreement (or any Credit Support
Provider of such party or any applicable Specified Entity of such party) and
the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is a
rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions),
(b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment
or fee of any nature (including interest, penalties and additions thereto)
that is imposed by any government or other taxing authority in respect of any
payment under this Agreement other than a stamp, registration, documentation
or similar tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in
effect immediately before the effectiveness of the notice designating that
Early Termination Date (or, if "Automatic Early Termination" applies,
immediately before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated
in the Termination Currency, such Termination Currency amount and, in respect
of any amount denominated in a currency other than the Termination Currency
(the "Other Currency"), the amount in the Termination Currency determined by
the party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or,
if the relevant Market Quotation or Loss (as the case may be), is determined
as of a later date, that later date, with the Termination Currency at the rate
equal to the spot exchange rate of the foreign exchange agent (selected as
provided below) for the purchase of such Other Currency with the Termination
Currency at or about 11:00 a.m. (in the city in which such foreign exchange
agent is located) on such date as would be customary for the determination of
such a rate for the purchase of such Other Currency for value on the relevant
Early Termination Date or that later date. The foreign exchange agent will, if
only one party is obliged to make a determination under Section 6(e), be
selected in good faith by that party and otherwise will be agreed by the
parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or an
Additional Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become
payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or
prior to such Early Termination Date and which remain unpaid as at such Early
Termination Date and (b) in respect of each Terminated Transaction, for each
obligation under Section 2(a)(i) which was (or would have been but for Section
2(a)(iii)) required to be settled by delivery to such party on or prior to
such Early Termination Date and which has not been so settled as at such Early
Termination Date, an amount equal to the fair market value of that which was
(or would have been) required to be delivered as of the originally scheduled
date for delivery, in each case together with (to the extent permitted under
applicable law) interest, in the currency of such amounts, from (and
including) the date such amounts or obligations were or would have been
required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b)
above shall be reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it shall be
the average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.
<PAGE>
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
WESTDEUTSCHE LANDESBANK GIROZENTRALE DLJ ABS TRUST, SERIES 2000-7
BY THE CHASE MANHATTAN BANK,
NOT IN ITS INDIVIDUAL CAPACITY,
BUT ACTING SOLELY AS TRUSTEE OF
THE DLJ ABS TRUST, SERIES 2000-7
By: /s/ David J. Wolf By: /s/ Mary Boyle
-------------------------------- -------------------------------------
Name: David J.Wolf Name: Mary Boyle
Title: Vice President Title:
Date: 01/04/01 Date 1/04/01
<PAGE>
EXECUTION COPY
SCHEDULE TO THE MASTER AGREEMENT
DATED AS OF January 4, 2001
between
WESTDEUTSCHE LANDESBANK GIROZENTRALE, a bank organized under the laws of the
State of North Rhine - Westphalia acting through its NEW YORK BRANCH ("Party
A")
and
DLJ ABS TRUST, SERIES 2000-7
("Party B")
PART I
TERMINATION PROVISIONS
(a) "Specified Entity" has no meaning in relation to either Party A or
Party B.
(b) "Specified Transaction" has the meaning specified in Section 14.
(c) The "Failure to Pay or Deliver" provisions of Section 5(a)(i) will apply
to both Party A and Party B.
(d) The "Default under Specified Transaction" provision of Section 5(a)(v)
will not apply to either Party A or Party B.
(e) The "Cross-Default" provisions of Section 5(a)(vi) will not apply to
either Party A or Party B.
(f) The "Breach of Agreement" provisions of Section 5(a)(ii), the "Credit
Support Default" provisions of Section 5(a)(iii) and the "Misrepresentation"
provisions of Section 5(a)(iv) will not apply to Party A or Party B.
(g) The "Credit Event Upon Merger" provision of Section 5(b)(iv) will not
apply to Party A or Party B.
(h) The "Automatic Early Termination" provision of Section 6(a) will not apply
to Party A or Party B.
(i) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement but subject to Part 6 of this Schedule:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(j) "Termination Currency" means United States Dollars.
PART 2
TAX REPRESENTATIONS
(a) Payer Tax Representation. For the purpose of Section 3(e) of this
Agreement, each party will make with respect to itself the following
representation:
It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement)
to be made by it to the other party under this Agreement. In making this
representation, it may rely on (i) the accuracy of any representation made by
the other party pursuant to Section 3(f) of this Agreement; (ii) the
satisfaction of the agreement of the other party contained in Section 4(a)(i)
or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii)
of this Agreement; and (iii) the satisfaction of the agreement of the other
party contained in Section 4(d) of this Agreement;
provided that it shall not be a breach of this representation where reliance
is placed on sub-clause (ii) above and the other party does not deliver a form
or document under Section 4(a)(iii) by reason of material prejudice to its
legal or commercial position.
(b) Payee Tax Representation. Party A makes the following Payee Tax
Representation: Each payment received or to be received by Party A in
connection with this Agreement will be effectively connected with its conduct
of a trade or business in the United States. Party B makes the following Payee
Tax Representation: None
PART 3
AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:
<TABLE>
<CAPTION>
PARTY
REQUIRED TO
DELIVER FORM/DOCUMENT/ COVERED
DOCUMENT CERTIFICATE DATE BY WHICH BY SECTION 3(d)
TO BE DELIVERED REPRESENTATION
<S> <C> <C> <C>
Party A and Party B With respect to Party A, an (i) Upon the execution Yes.
executed U.S. Internal Revenue of this Agreement or
Service Form W-8ECI, in duplicate shortly thereafter,
(or any successor thereto). With with such form to be
respect to Party B, a U.S. updated as requested by
Internal Revenue Form W-9 in the other party; and
duplicate (or any successor (ii) promptly upon
thereto). reasonable demand by
the other Party.
Party A and B Evidence reasonably satisfactory Upon execution of this Yes.
to the other party as to the Agreement and, if
authority, incumbency and specimen requested,upon execution
signature of each person executing of anyConfirmation.
any document on its behalf in
connection with this Agreement,
any Confirmation and any Credit
Support Document.
Party A and B A legal opinion from counsel to Upon execution of this No.
each Party in the form and Agreement.
substance to be satisfactory to
the Party to whom such opinion is
being delivered.
Party A Annual audited financial Promptly after request upon Yes.
statements prepared in accordance becoming publicly available.
with generally accepted accounting
principles in the country in which
the party is organized.
Party A and A certificate of the Secretary or Upon delivery of this Yes.
Party B another authorized officer (or, in Agreement.
the case of Party A, the current
authorized signature book of such
party) specifying the names, titles,
authority and specimen signatures of
the persons authorized to execute
this Agreement and each Confirmation
on its behalf.
Party B Other documents reasonably Upon request. Yes.
requested by Party A.
</TABLE>
PART 4
MISCELLANEOUS
(a)(i) Addresses for Notices. For the purpose of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
To the office(s) specified in the relevant Confirmation with a copy of any
notice or other communication under Section 5, 6, 7, 11 or 13 to the New York
Branch Legal Department and Duesseldorf Office of Party A as set forth below:
Address: Westdeutsche Landesbank Girozentrale, New York Branch
Attention: Legal Department
1211 Avenue of the Americas
New York, New York 10036
Tel: (212) 852-6092
Fax: (212) 768-4781
Westdeutche Landesbank Girozentrale
Herzogstrasse 15
D-40217 Duesseldorf,
Germany
Attn: Legal Department (Documentation Unit)
Tel: 011-49-211-826-71709
Fax: 011-49-211-826-6124
Address for notices or communications to Party B:
Address: The Chase Manhattan Bank
450 West 33rd Street, 14th Floor
New York, New York 10001
U.S.A.
Attention: DLJ ABS TRUST 2000-7
Facsimile No.:
Telephone No.:
(ii) Notices. Section 12(a) is amended by adding in the third line thereof
after the phrase "messaging system" and before the")" the words": provided,
however, any such notice or other communication may be given by facsimile
transmission".
(b) Process Agent. For purposes of Section 13(c) of this Agreement:
Party A appoints as its Process Agent: Not Applicable.
Party B appoints as its Process Agent: Not Applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For purposes of Section 10(c) of this Agreement:
Party A is not a Multibranch Party and will act through its New York office.
Party B is not a Multibranch Party.
(e) Calculation Agent. Party A; unless an Event of Default shall have
occurred and Party A is a Defaulting Party, in which event the Calculation
Agent will be Party B. The failure of Party A to perform its obligations as
Calculation Agent hereunder shall not be construed as an Event of Default or
Termination Event.
(f) Credit Support Documents. Details of any Credit Support Documents: None
(g) Credit Support Provider means
In relation to Party A: Not Applicable.
In relation to Party B: Not Applicable.
(h) Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. .
(i) Netting of Payments. Section 2(c) of this Agreement will not apply.
(j) "Affiliate" will have (i) with respect to Party A, the meaning specified
in Section 14.
PART 5
OTHER PROVISIONS
(a) ISDA Definitions Incorporated by Reference. The definitions and
provisions of the 1991 ISDA Definitions ("1991 Definitions") (as published by
the International Swaps and Derivatives Association, Inc. ("ISDA") and as
supplemented by the 1998 Supplement to the 1991 ISDA Definitions) are
incorporated by reference herein. Any terms used and not otherwise defined
herein which are contained in the 1991 Definitions (as so supplemented) shall
have the meaning set forth therein.
(b) Additional Representations. Section 3 is hereby amended by adding at the
end thereof the following subparagraphs:
"(g) No Agency. It is entering into this Agreement, any Credit
Support Document and any other document relating to this Agreement
and the Transaction as principal and not as agent or on any capacity,
fiduciary or otherwise."
(c) Swap Exemption. Each party hereto represents to the other party on and as
of the date hereof and on the date on which the Transaction is entered into
between them hereunder, that in connection with the negotiation of, the
entering into, and the execution of this Agreement, any Credit Support
Document to which it is a party, the Transaction and any other documentation
relating to this Agreement to which it is a party or that it is required by
this Agreement to deliver, that:
(i) This Agreement (including the Transaction) constitutes a "swap
agreement" within the meaning of Commodity Futures Trading Commission
("CFTC") Regulations (the "CFTC Regulations") Section 35.1(b)(1), Section
101(53)(B) of the U.S. Bankruptcy Code and the CFTC Policies Statement
concerning Swap Transactions, 54 Fed. Reg. 30694 (July 21, 1989) (the
"CFTC Swap Policies Statement").
(ii) It is an "eligible swap participant' as defined in Section
35.1(b)(2) of the CFTC Regulations.
(iii) This Agreement (including the Transaction) is not one of a
fungible class of agreements that are standardized as to their material
economic terms, within the meaning of Section 35.2(b) of the CFTC
Regulations.
(iv) The economic terms of this Agreement, any Credit Support
Document to which it is a party, and the Transaction have been
individually tailored and negotiated by it, and the creditworthiness of
the other party was a material consideration in its entering into or
determining the terms of this Agreement, any such Credit Support Document
and such Transaction (including, without limitation, pricing, cost and
credit enhancement terms), within the meaning of Section 35.2(c) of the
CFTC Regulations.
(v) It has entered into this Agreement (including the Transaction)
in conjunction with its line of business (including financial
intermediation services) or the financing of its business, within the
meaning of the CFTC Swap Policies Statement.
(d) Relationship between Parties. In connection with the negotiation of, the
entering into, and the confirming of this Agreement, and any other
documentation relating to this Agreement to which it is a party or that it is
required by this Agreement to deliver, each party hereby represents and
warrants, and, in connection with the negotiation of, the entering into, and
the confirming of the execution of the Transaction, each party will be deemed
to represent to the other party as of the date hereof that (absent a written
agreement between the parties that expressly imposes affirmative obligations
to the contrary for such Transaction):
Non-Reliance. It is acting for its own account, and it has made its own
independent decisions to enter into the Transaction and as to whether the
Transaction is appropriate or proper for it based upon its own judgment and
upon advice from such advisers as it has deemed necessary. It is not relying
on any communication (written or oral) of the other party as investment advice
or as a recommendation to enter into the Transaction; it being understood that
information and explanations related to the terms and conditions of the
Transaction shall not be considered investment advice or a recommendation to
enter into the Transaction. No communication (written or oral) received from
the other party shall be deemed to be an assurance or guarantee as to the
expected results of the Transaction.
Assessment and Understanding. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of the
Transaction. It is also capable of assuming, and assumes, the risks of the
Transaction. It has determined to its satisfaction whether or not the rates,
prices or amounts and other economic terms of the Transaction and the
indicative quotations (if any) provided by the other party reflect those in
the relevant market for similar transactions, and all trading decisions have
been the result of arm's length negotiations between the parties.
Status of Parties. The other party is not acting as a fiduciary for or an
adviser to it in respect of the Transaction.
Related Transactions. It is aware that each other party to this Agreement and
its Affiliates may from time to time (A) take positions in instruments that
are identical or economically related to the Transaction or (B) have an
investment banking or other commercial relationship with the issuer of an
instrument underlying the Transaction.
(e) Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY CREDIT SUPPORT
DOCUMENT. EACH PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF THE OTHER PARTY OR ANY CREDIT SUPPORT PROVIDER HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A SUIT,
ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II)
ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND PROVIDE FOR ANY CREDIT SUPPORT DOCUMENT, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
(f) Consent to Telephonic Recording. Each party hereto consents to the
monitoring or recording, at any time and from time to time, by the other party
of the telephone conversations of trading and marketing personnel of the
parties and their authorized representatives in connection with this
Agreement, including the Transaction; and the parties waive any further notice
of such monitoring or recording and agree to give proper notice and obtain any
necessary consent of such personnel for any such monitoring or recording.
(g) Change of Account. Section 2(b) of this Agreement is hereby amended by the
addition of the following after the word "delivery" in the first line thereof:
"to another account in the same legal and tax jurisdiction as the original
account."
(h) No Liability of the Trustee. The Trustee is entering into this Agreement
solely as Trustee and not in its individual capacity, and all persons having
any claim against the Trustee by reason of the transactions contemplated by
this Agreement shall look solely to the Trust Fund for payment or satisfaction
thereof.
Part 6
Definitions-Rating Agency Provisions
(a) Definitions of Certain Capitalized Terms. Capitalized terms not otherwise
defined herein shall have the meanings set forth in that certain Pooling and
Servicing Agreement (the "Pooling Agreement") that relates to Party B's
issuance of Mortgage Pass-through Certificates, Series 2000-7 (the
"Certificates"), dated as of December 1, 2000 and as entered into among the
Depositor, the Seller, the Servicer and Special Servicer, the Servicer and
Party B. In the case of any inconsistency between this Agreement and such
terms, this Agreement will prevail.
(b) Sole Transaction. Notwithstanding anything else in this Agreement to the
contrary, the Transaction contemplated by the Confirmation between the parties
hereto and dated as of the date hereof are and will be the only Transaction
governed by this Agreement (the "Transaction").
(c) Rating Agency Downgrade. In the event that Party A's long-term unsecured
and unsubordinated debt rating is withdrawn or reduced below "A" and the short
term unsecured and unsubordinated debt rating is withdrawn or reduced below
"F-1" by Fitch, Inc. ("Fitch") and its long-term unsecured and unsubordinated
debt rating is withdrawn or reduced below "A1" and the short term unsecured
and unsubordinated debt rating is withdrawn or reduced to below "P-1" by
Moody's Investors Service, Inc. ("Moody's" and together with Fitch, the "Swap
Rating Agencies", and such rating thresholds, "Approved Rating Thresholds"),
within 30 days of such rating withdrawal or downgrade (unless, within 30 days
after such withdrawal or downgrade each such Swap Rating Agency has
reconfirmed the rating of the Certificates, which was in effect immediately
prior to such withdrawal or downgrade), then Party A shall (1) obtain a
replacement ISDA Master Agreement and a Confirmation with another counterparty
with the Approved Rating Thresholds and approved by Party B (which approval
shall not be unreasonably withheld) on terms substantially similar to this
Master Agreement and the Confirmation for the Transaction (2) obtain a
guaranty of, or a contingent agreement of another person with the Approved
Rating Thresholds, to honor, Party A's obligations under this Master Agreement
and the Confirmation for the Transaction; provided that such other person is
approved by Party B, such approval not to be unreasonably withheld, (3) post
collateral which will be sufficient for the applicable Swap Rating Agency to
restore its immediately prior ratings of the Certificates; or (4) establish
any other arrangement satisfactory to the applicable Swap Rating Agency which
will be sufficient to restore its immediately prior ratings of the
Certificates.
(d) Additional Termination Events. Additional Termination Events will apply.
The following shall constitute an Additional Termination Event:
(i) A Rating Agency Downgrade has occurred and Party A has not,
within 30 days, complied with Part 6(c) hereof.
(ii) The Trust relating to the Certificates is terminated.
(iii) Any of the documents relating to Party B's issuance of the
Certificates, including the Pooling Agreement, is amended without the
prior written consent of Party A in a manner that, in Party A's
reasonable and good faith judgment, adversely affects the rights or
obligations of Party A hereunder or in the Confirmation, it being
understood that Party B hereby covenants and undertakes not to so
amend the above-mentioned documents without such consent.
Party A will be the sole Affected Party with respect to an Additional
Termination Event described in Part 6(d)(i), Party B will be the sole Affected
Party with respect to an Additional Termination Event described in either of
Parts 6(d)(ii) and -(iii), and in each such case the Transaction will be an
Affected Transaction.
(e) No Bankruptcy Petition. Party A agrees that, prior to the date which is
one year and one day after all of the Certificates have been paid in full, it
will not, prior to the expiration of the aforementioned one-year and one-day
period or, if longer, the applicable preference period then in effect in
relation to Party B , institute against, or join any other person or entity in
instituting against, Party B any bankruptcy, reorganization, arrangement,
insolvency, moratorium or liquidation proceedings, or other like proceedings
under any applicable law, provided that nothing herein shall preclude, or be
deemed to estop, Party A from (i) taking any action prior to the expiration of
the aforementioned one-year and one-day period of, if longer, the applicable
preference period then in effect (A) in any case or proceeding voluntarily
filed or commenced by Party B or (B) in any involuntary case or insolvency
proceeding filed or commenced against Party B by a person other than the
Trustee or Party A or (ii) commencing against Party B or any of its properties
any legal action that is not a bankruptcy, reorganization, arrangement,
insolvency, moratorium, liquidation or like proceeding.
<PAGE>
IN WITNESS WHEREOF, each of Party A and Party B has caused this Schedule to be
duly executed as its act and deed of the date first written above.
Westdeutsche Landesbank Girozentrale, DLJ ABS Trust, Series 2007
acting through its New York Branch By The Chase Manhattan Bank,
not in its individual capacity, but
acting solely as Trustee of the
DLJ ABS Trust, Series 2000-7
By:__________________________ By:_______________________________
Name: Name:
Title: Title:
By:__________________________
Name:
Title:
<PAGE>
Westdeutsche Landesbank
Girozentrale, New York Branch
1211 Avenue of the Americas
New York, NY 10036-8701
Telephone (212) 597-8580
Telefax (212) 597-8592
January 4, 2001
The Chase Manhattan Bank,
not in its individual capacity, but
acting solely as Trustee of the
DLJ ABS Trust, Series 2000-7
Attn.: Tom Britt
Fax: (212) 946-8302
Our Reference: 179037N
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Westdeutsche Landesbank Girozentrale, New
York Branch, ("Party A") and DLJ ABS Trust, Series 2000-7 ("Party B") on the
Trade Date specified below (the "Transaction"). This letter agreement
constitutes a "Confirmation" as referred to in the Master Agreement specified
below.
The definitions and provisions contained in the 1991 ISDA Definitions (as
supplemented by the 1998 Supplement), (as published by the International Swaps
and Derivatives Association, Inc. ("ISDA")) (the "Definitions") are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern.
1. This Confirmation supplements, forms a part of, and is subject to, the
Master Agreement including the Schedule thereto dated as of January 4, 2001,
as amended and supplemented from time to time (the "Agreement"), between you
and us. All provisions contained in the Agreement govern this Confirmation
except as expressly modified below.
Each party will make each payment specified in this Confirmation as being
payable by it, not later than the due date for value on that date in the place
of the account specified below, in freely transferable funds and in the manner
customary for payments in the required currency. If on any date amounts would
otherwise be payable in the same currency by each party to the other, then, on
such date, each party's obligation to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by one party exceeds the aggregate amount that
would otherwise have been payable by the other party, replaced by an
obligation upon the party by whom the larger aggregate amount would have been
payable to pay to the other party the excess of the larger aggregate amount
over the smaller aggregate amount.
This Confirmation will be governed by and construed in accordance with
the laws of the State of New York.
2. The terms of this particular Transaction to which this Confirmation
relates are as follows:
Trade Date: December 28, 2000
Effective Date: January 4, 2001
Termination Date: The earlier of (i) August 24, 2002,
subject to adjustment in accordance
with the Modified Following Business
Day Convention, and (ii) the date the
aggregate Class Principal Balance of
the LIBOR Certificates is reduced to
zero.
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Amount and [on file with Company]
Fixed Rate Payer Payment Date: January 4, 2001
Floating Amounts I and II:
Floating Rate Payer: Party A
Floating Rate Notional
Amount I: The lesser of (a) USD 50,000,000 and
(b) USD 51,297,785.00 minus the
cumulative amount of principal
distributed on the Class A-2
Certificates minus 18% of the
cumulative amount of principal
distributed on the Subordinate
Certificates.
Floating Rate Notional
Amount II: The lesser of (a) USD 237,000,000 and
(b) USD 243,352,972.50 minus the
cumulative amount of principal
distributed on the Class A-3
Certificates and the Class A-4
Certificates minus 82% of the
cumulative amount of principal
distributed on the Subordinate
Certificates
Notice as to Principal
Distributions: Not later than two Business Days after
the first day of each Calculation
Period, Party B will notify Party A of
the cumulative amount of principal
distributed on each relevant Class of
Certificates.
Cap Rate I: 8.25 percent
Cap Rate II: 8.50 percent
Floating Rate Payer Payment
Dates: Seven (7) Business Days prior to each
Floating Rate Payer Period End Date
Floating Rate Payer Period
End Dates: The 24th day of each month of each year
commencing January 24, 2001 through and
including the Termination Date, subject
to adjustment in accordance with the
Modified Following Business Day
Convention
Floating Rate for initial
Calculation Period: 6.54750 percent
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Spread: None
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: The first day of each Floating Rate
Payer Calculation Period
Rate Cut-off Dates: Inapplicable
Method of Averaging: Inapplicable
Compounding: Inapplicable
Business Days for payment: New York
Business Days for Reset: London and New York
Calculation Agent: As set forth in the Agreement
3. Credit Support Documents:
Party A Credit Support
Documents: None
Party B Credit Support
Documents: None
4. Account Details:
Payments to Party A: [on file with Company]
Payments to Party B: [on file with Company]
5. Offices:
The Office of Party A for the Transaction is New York.
The Office of Party B for the Transaction is New York.
6. Addresses for Notices:
Address for notices or communications to Party A:
Westdeutsche Landesbank Girozentrale
1211 Avenue of the Americas, 26th Floor
New York, NY 10036-8701
Attn.: OTC Derivatives
Tel: (212) 597-8580
Fax: (212) 597-8592
Address for notices or communications to Party B:
The Chase Manhattan Bank
450 West 33rd Street, 14th Floor
New York, New York 10001
Attn: DLJ ABS Trust, Series 2000-7, Tom Britt
Tel: (212) 946-3200
Fax: (212) 946-8302
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us by facsimile
transmission at (212) 597-8592. No hard copy of this Confirmation will follow.
If you require hard copies, please contact Derivative Operations, Westdeutsche
Landesbank Girozentrale, New York Branch, 1211 Avenue of the Americas, 26th
Floor, New York, NY 10036-8701, tel: (212) 597-8580. If you have any questions
regarding payments or resets, please contact our Business Area Control Group
at (212) 597-8580.
We are happy to have completed this transaction with you.
Yours sincerely,
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By: ______________________ ___
Name: Anne Won
Title: Manager
By: _________________________
Name:
Title:
Accepted and confirmed as of
the date first above written:
DLJ ABS TRUST, SERIES 2000-7
BY THE CHASE MANHATTAN BANK,
NOT IN ITS INDIVIDUAL CAPACITY, BUT
ACTING SOLELY AS TRUSTEE OF THE
DLJ ABS TRUST, SERIES 2000-7
By: ________________________
Name:
Title:
<PAGE>
Exhibit 99.3
CERTIFICATE GUARANTY INSURANCE POLICY
OBLIGATIONS: $126,878,000 POLICY NUMBER: 34038
DLJ ABS Trust Series 2000-7
Mortgage Pass-Through Certificates, Series 2000-7
Class A-1 Certificates
MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner that an amount equal to each full and complete Insured
Payment will be received from the Insurer by The Chase Manhattan Bank, or its
successors, as trustee for the Owners (the "Trustee"), on behalf of the
Owners, for distribution by the Trustee to each Owner of each Owner's
proportionate share of the Insured Payment. The Insurer's obligations
hereunder with respect to a particular Insured Payment shall be discharged to
the extent funds equal to the applicable Insured Payment are received by the
Trustee, whether or not such funds are properly applied by the Trustee.
Insured Payments shall be made only at the time set forth in this Policy, and
no accelerated Insured Payments shall be made regardless of any acceleration
of the Obligations, unless such acceleration is at the sole option of the
Insurer. This Policy does not provide credit enhancement for any Class of
Certificates other than the Class A-1 Certificates.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust, the REMICs or
the Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability).
The Insurer will pay any Insured Payment that is a Preference Amount on
the Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (a) a certified copy of the order requiring the return of
a preference payment, (b) an opinion of counsel satisfactory to the Insurer
that such order is final and not subject to appeal, (c) an assignment in such
form as is reasonably required by the Insurer, irrevocably assigning to the
Insurer all rights and claims of the Owner relating to or arising under the
Obligations against the debtor which made such preference payment or otherwise
with respect to such preference payment and (d) appropriate instruments to
effect the appointment of the Insurer as agent for such Owner in any legal
proceeding related to such preference payment, such instruments being in a
form satisfactory to the Insurer, provided that if such documents are received
after 12:00 noon, New York City time, on such Business Day, they will be
deemed to be received on the following Business Day. Such payments shall be
disbursed to the receiver or trustee in bankruptcy named in the final order of
the court exercising jurisdiction on behalf of the Owner and not to any Owner
directly unless such Owner has returned principal or interest paid on the
Obligations to such receiver or trustee in bankruptcy, in which case such
payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on which
the related Deficiency Amount is due or the second Business Day following
receipt in New York, New York on a Business Day by State Street Bank and Trust
Company, N.A., as Fiscal Agent for the Insurer, or any successor fiscal agent
appointed by the Insurer (the "Fiscal Agent"), of a Notice (as described
below), provided that if such Notice is received after 12:00 noon, New York
City time, on such Business Day, it will be deemed to be received on the
following Business Day. If any such Notice received by the Fiscal Agent is not
in proper form or is otherwise insufficient for the purpose of making claim
hereunder, it shall be deemed not to have been received by the Fiscal Agent
for purposes of this paragraph, and the Insurer or the Fiscal Agent, as the
case may be, shall promptly so advise the Trustee and the Trustee may submit
an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds
to make payments due under this Policy.
Subject to the terms of the Agreement, the Insurer will be subrogated to
the rights of each Owner to receive payments under the Obligations to the
extent of any payment by the Insurer under this Policy.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Pooling and Servicing Agreement dated as of
December 1, 2000 among DLJ Mortgage Acceptance Corp., as Depositor, Calmco
Servicing L.P., as Servicer and Special Servicer, Old Kent Mortgage Company,
as Servicer, DLJ Mortgage Capital, Inc., as Seller, and the Trustee, as
trustee, without regard to any amendment or supplement thereto, unless such
amendment or supplement has been approved in writing by the Insurer.
"Business Day" means any day other than (a) a Saturday or a Sunday (b) a
day on which the Insurer is closed or (c) a day on which banking institutions
in New York City, the States of Illinois, California, Minnesota or Texas or in
the city in which the corporate trust office of the Trustee under the
Agreement is located are authorized or obligated by law or executive order to
close.
"Deficiency Amount" means, (i) with respect to any Distribution Date, the
amount, if any, by which the amount available to be paid as interest to the
Class A-1 Certificates, pursuant to the priority of payment set forth in the
Agreement, is less than (A) the Current Interest plus any Carryforward
Interest allocable to the Class A-1 Certificates, minus (B) the pro rata
portion of any Interest Shortfalls allocable to the Class A-1 Certificates
based on the Current Interest due on such Class of Certificates on such
Distribution Date, and (ii) to the extent unpaid on the Final Scheduled
Distribution Date, after payment of all other amounts due to the Class A-1
Certificates, any remaining Class Principal Balance of the Class A-1
Certificates.
"Insured Payment" means (a) as of any Distribution Date, any Deficiency
Amount and (b) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by facsimile substantially in the form of Exhibit A attached
hereto, the original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Payment which shall be
due and owing on the applicable Distribution Date.
"Owner" means each Class A-1 Certificateholder (as defined in the
Agreement) who, on the applicable Distribution Date, is entitled under the
terms of the applicable Certificates to payment thereunder.
"Preference Amount" means any amount previously distributed to an Owner
on the Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with
a final nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of this Policy, without giving effect to any subsequent amendment to or
modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be
made at the address listed below for the Fiscal Agent or such other address as
the Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006, Attention: Municipal Registrar and Paying Agency, or
such other address as the Fiscal Agent shall specify to the Trustee in
writing.
THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE CONSTRUED
UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this Policy
is not refundable for any reason, including payment, or provision being made
for payment, prior to maturity of the Obligations.
<PAGE>
IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed and
attested this 4th day of January, 2001.
MBIA INSURANCE CORPORATION
By /s/
--------------------------------
President
Attest:
By /s/
--------------------------------
Assistant Secretary
<PAGE>
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE
POLICY NUMBER: 34038
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 34038
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
15th Floor
61 Broadway
New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [NAME OF TRUSTEE], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
34038 (the "Policy") issued by the Insurer in respect of the $126,878,000 DLJ
ABS Trust Series 2000-7 Mortgage Pass-Through Certificates, Series 2000-7
Class A-1 Certificates (the "Obligations"), that:
(a) the Trustee is the trustee under the Pooling and Servicing Agreement
dated as of December 1, 2000 among DLJ Mortgage Acceptance Corp., as
Depositor, Calmco Servicing L.P., as Servicer and Special Servicer, Old
Kent Mortgage Company, as Servicer, DLJ Mortgage Capital, Inc., as
Seller, and the Trustee, as trustee for the Owners;
(b) the amount due under clause (i) of the definition of Deficiency
Amount for the Distribution Date occurring on [ ] (the
"Applicable Distribution Date") is $[ ];
(c) the amount due under clause (ii) of the definition of Deficiency
Amount for the Applicable Distribution Date is $[ ];
(d) the sum of the amounts listed in paragraphs (b) and (c) above is $[ ]
(the "Deficiency Amount");
(e) the amount of previously distributed payments on the Obligations that
is recoverable and sought to be recovered as a voidable preference by a
trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with
a final nonappealable order of a court having competent jurisdiction is
$[ ] (the "Preference Amount");
(f) the total Insured Payment due is $[ ], which amount equals
the sum of the Deficiency Amount and the Preference Amount;
(g) the Trustee is making a claim under and pursuant to the terms of the
Policy for the dollar amount of the Insured Payment set forth in (d)
above to be applied to the payment of the Deficiency Amount for the
Applicable Distribution Date in accordance with the Agreement and for the
dollar amount of the Insured Payment set forth in (e) above to be applied
to the payment of any Preference Amount; and
(h) the Trustee directs that payment of the Insured Payment be made to
the following account by bank wire transfer of federal or other
immediately available funds in accordance with the terms of the Policy:
[TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined herein
shall have the meaning assigned thereto in the Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance Company Or
Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A
Civil Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The
Claim For Each Such Violation.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the [ ] day of [_________________], [_____].
[NAME OF TRUSTEE], as Trustee
By
------------------------------------
Title
---------------------------------
<PAGE>
CERTIFICATE GUARANTY INSURANCE POLICY
OBLIGATIONS: $46,745,000 POLICY NUMBER: 34039
DLJ ABS Trust Series 2000-7
Mortgage Pass-Through Certificates, Series 2000-7
Class A-2 Certificates
MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner that an amount equal to each full and complete Insured
Payment will be received from the Insurer by The Chase Manhattan Bank, or its
successors, as trustee for the Owners (the "Trustee"), on behalf of the
Owners, for distribution by the Trustee to each Owner of each Owner's
proportionate share of the Insured Payment. The Insurer's obligations
hereunder with respect to a particular Insured Payment shall be discharged to
the extent funds equal to the applicable Insured Payment are received by the
Trustee, whether or not such funds are properly applied by the Trustee.
Insured Payments shall be made only at the time set forth in this Policy, and
no accelerated Insured Payments shall be made regardless of any acceleration
of the Obligations, unless such acceleration is at the sole option of the
Insurer. This Policy does not provide credit enhancement for any Class of
Certificates other than the Class A-2 Certificates.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust, the REMICs or
the Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability).
The Insurer will pay any Insured Payment that is a Preference Amount on
the Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (a) a certified copy of the order requiring the return of
a preference payment, (b) an opinion of counsel satisfactory to the Insurer
that such order is final and not subject to appeal, (c) an assignment in such
form as is reasonably required by the Insurer, irrevocably assigning to the
Insurer all rights and claims of the Owner relating to or arising under the
Obligations against the debtor which made such preference payment or otherwise
with respect to such preference payment and (d) appropriate instruments to
effect the appointment of the Insurer as agent for such Owner in any legal
proceeding related to such preference payment, such instruments being in a
form satisfactory to the Insurer, provided that if such documents are received
after 12:00 noon, New York City time, on such Business Day, they will be
deemed to be received on the following Business Day. Such payments shall be
disbursed to the receiver or trustee in bankruptcy named in the final order of
the court exercising jurisdiction on behalf of the Owner and not to any Owner
directly unless such Owner has returned principal or interest paid on the
Obligations to such receiver or trustee in bankruptcy, in which case such
payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on which
the related Deficiency Amount is due or the second Business Day following
receipt in New York, New York on a Business Day by State Street Bank and Trust
Company, N.A., as Fiscal Agent for the Insurer, or any successor fiscal agent
appointed by the Insurer (the "Fiscal Agent"), of a Notice (as described
below), provided that if such Notice is received after 12:00 noon, New York
City time, on such Business Day, it will be deemed to be received on the
following Business Day. If any such Notice received by the Fiscal Agent is not
in proper form or is otherwise insufficient for the purpose of making claim
hereunder, it shall be deemed not to have been received by the Fiscal Agent
for purposes of this paragraph, and the Insurer or the Fiscal Agent, as the
case may be, shall promptly so advise the Trustee and the Trustee may submit
an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds
to make payments due under this Policy.
Subject to the terms of the Agreement, the Insurer will be subrogated to
the rights of each Owner to receive payments under the Obligations to the
extent of any payment by the Insurer under this Policy.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Pooling and Servicing Agreement dated as of
December 1, 2000 among DLJ Mortgage Acceptance Corp., as Depositor, Calmco
Servicing L.P., as Servicer and Special Servicer, Old Kent Mortgage Company,
as Servicer, DLJ Mortgage Capital, Inc., as Seller, and the Trustee, as
trustee, without regard to any amendment or supplement thereto, unless such
amendment or supplement has been approved in writing by the Insurer.
"Business Day" means any day other than (a) a Saturday or a Sunday (b) a
day on which the Insurer is closed or (c) a day on which banking institutions
in New York City, the States of Illinois, California, Minnesota or Texas or in
the city in which the corporate trust office of the Trustee under the
Agreement is located are authorized or obligated by law or executive order to
close.
"Deficiency Amount" means, (i) with respect to any Distribution Date, the
amount, if any, by which the amount available to be paid as interest to the
Class A-2 Certificates, pursuant to the priority of payment set forth in the
Agreement, is less than (A) the Current Interest plus any Carryforward
Interest allocable to the Class A-2 Certificates, minus (B) the pro rata
portion of any Interest Shortfalls allocable to the Class A-2 Certificates
based on the Current Interest due on such Class of Certificates on such
Distribution Date, and (ii) to the extent unpaid on the Final Scheduled
Distribution Date, after payment of all other amounts due to the Class A-2
Certificates, any remaining Class Principal Balance of the Class A-2
Certificates.
"Insured Payment" means (a) as of any Distribution Date, any Deficiency
Amount and (b) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by facsimile substantially in the form of Exhibit A attached
hereto, the original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Payment which shall be
due and owing on the applicable Distribution Date.
"Owner" means each Class A-2 Certificateholder (as defined in the
Agreement) who, on the applicable Distribution Date, is entitled under the
terms of the applicable Certificates to payment thereunder.
"Preference Amount" means any amount previously distributed to an Owner
on the Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with
a final nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of this Policy, without giving effect to any subsequent amendment to or
modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be
made at the address listed below for the Fiscal Agent or such other address as
the Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006, Attention: Municipal Registrar and Paying Agency, or
such other address as the Fiscal Agent shall specify to the Trustee in
writing.
THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE CONSTRUED
UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this Policy
is not refundable for any reason, including payment, or provision being made
for payment, prior to maturity of the Obligations.
<PAGE>
IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed and
attested this 4th day of January, 2001.
MBIA INSURANCE CORPORATION
By /s/
--------------------------------
President
Attest:
By /s/
--------------------------------
Assistant Secretary
<PAGE>
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE
POLICY NUMBER: 34039
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 34039
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
15th Floor
61 Broadway
New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [NAME OF TRUSTEE], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
34039 (the "Policy") issued by the Insurer in respect of the $46,745,000 DLJ
ABS Trust Series 2000-7 Mortgage Pass-Through Certificates, Series 2000-7
Class A-2 Certificates (the "Obligations"), that:
(a) the Trustee is the trustee under the Pooling and Servicing Agreement
dated as of December 1, 2000 among DLJ Mortgage Acceptance Corp., as
Depositor, Calmco Servicing L.P., as Servicer and Special Servicer, Old
Kent Mortgage Company, as Servicer, DLJ Mortgage Capital, Inc., as
Seller, and the Trustee, as trustee for the Owners;
(b) the amount due under clause (i) of the definition of Deficiency
Amount for the Distribution Date occurring on [ ] (the
"Applicable Distribution Date") is $[ ];
(c) the amount due under clause (ii) of the definition of Deficiency
Amount for the Applicable Distribution Date is $[ ];
(d) the sum of the amounts listed in paragraphs (b) and (c) above is
$[ ] (the "Deficiency Amount");
(e) the amount of previously distributed payments on the Obligations that
is recoverable and sought to be recovered as a voidable preference by a
trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with
a final nonappealable order of a court having competent jurisdiction is
$[ ] (the "Preference Amount");
(f) the total Insured Payment due is $[ ], which amount equals
the sum of the Deficiency Amount and the Preference Amount;
(g) the Trustee is making a claim under and pursuant to the terms of the
Policy for the dollar amount of the Insured Payment set forth in (d)
above to be applied to the payment of the Deficiency Amount for the
Applicable Distribution Date in accordance with the Agreement and for the
dollar amount of the Insured Payment set forth in (e) above to be applied
to the payment of any Preference Amount; and
(h) the Trustee directs that payment of the Insured Payment be made to
the following account by bank wire transfer of federal or other
immediately available funds in accordance with the terms of the Policy:
[TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined herein
shall have the meaning assigned thereto in the Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance Company Or
Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A
Civil Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The
Claim For Each Such Violation.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the [ ] day of [_________________], [_____].
[NAME OF TRUSTEE], as Trustee
By
------------------------------------
Title
---------------------------------
<PAGE>
CERTIFICATE GUARANTY INSURANCE POLICY
OBLIGATIONS: $45,653,000 POLICY NUMBER: 34040
DLJ ABS Trust Series 2000-7
Mortgage Pass-Through Certificates, Series 2000-7
Class A-3 Certificates
MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner that an amount equal to each full and complete Insured
Payment will be received from the Insurer by The Chase Manhattan Bank, or its
successors, as trustee for the Owners (the "Trustee"), on behalf of the
Owners, for distribution by the Trustee to each Owner of each Owner's
proportionate share of the Insured Payment. The Insurer's obligations
hereunder with respect to a particular Insured Payment shall be discharged to
the extent funds equal to the applicable Insured Payment are received by the
Trustee, whether or not such funds are properly applied by the Trustee.
Insured Payments shall be made only at the time set forth in this Policy, and
no accelerated Insured Payments shall be made regardless of any acceleration
of the Obligations, unless such acceleration is at the sole option of the
Insurer. This Policy does not provide credit enhancement for any Class of
Certificates other than the Class A-3 Certificates.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust, the REMICs or
the Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability).
The Insurer will pay any Insured Payment that is a Preference Amount on
the Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (a) a certified copy of the order requiring the return of
a preference payment, (b) an opinion of counsel satisfactory to the Insurer
that such order is final and not subject to appeal, (c) an assignment in such
form as is reasonably required by the Insurer, irrevocably assigning to the
Insurer all rights and claims of the Owner relating to or arising under the
Obligations against the debtor which made such preference payment or otherwise
with respect to such preference payment and (d) appropriate instruments to
effect the appointment of the Insurer as agent for such Owner in any legal
proceeding related to such preference payment, such instruments being in a
form satisfactory to the Insurer, provided that if such documents are received
after 12:00 noon, New York City time, on such Business Day, they will be
deemed to be received on the following Business Day. Such payments shall be
disbursed to the receiver or trustee in bankruptcy named in the final order of
the court exercising jurisdiction on behalf of the Owner and not to any Owner
directly unless such Owner has returned principal or interest paid on the
Obligations to such receiver or trustee in bankruptcy, in which case such
payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on which
the related Deficiency Amount is due or the second Business Day following
receipt in New York, New York on a Business Day by State Street Bank and Trust
Company, N.A., as Fiscal Agent for the Insurer, or any successor fiscal agent
appointed by the Insurer (the "Fiscal Agent"), of a Notice (as described
below), provided that if such Notice is received after 12:00 noon, New York
City time, on such Business Day, it will be deemed to be received on the
following Business Day. If any such Notice received by the Fiscal Agent is not
in proper form or is otherwise insufficient for the purpose of making claim
hereunder, it shall be deemed not to have been received by the Fiscal Agent
for purposes of this paragraph, and the Insurer or the Fiscal Agent, as the
case may be, shall promptly so advise the Trustee and the Trustee may submit
an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds
to make payments due under this Policy.
Subject to the terms of the Agreement, the Insurer will be subrogated to
the rights of each Owner to receive payments under the Obligations to the
extent of any payment by the Insurer under this Policy.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Pooling and Servicing Agreement dated as of
December 1, 2000 among DLJ Mortgage Acceptance Corp., as Depositor, Calmco
Servicing L.P., as Servicer and Special Servicer, Old Kent Mortgage Company,
as Servicer, DLJ Mortgage Capital, Inc., as Seller, and the Trustee, as
trustee, without regard to any amendment or supplement thereto, unless such
amendment or supplement has been approved in writing by the Insurer.
"Business Day" means any day other than (a) a Saturday or a Sunday (b) a
day on which the Insurer is closed or (c) a day on which banking institutions
in New York City, the States of Illinois, California, Minnesota or Texas, or
in the city in which the corporate trust office of the Trustee under the
Agreement is located are authorized or obligated by law or executive order to
close.
"Deficiency Amount" means, (i) with respect to any Distribution Date, the
amount, if any, by which the amount available to be paid as interest to the
Class A-3 Certificates, pursuant to the priority of payment set forth in the
Agreement, is less than (A) the Current Interest plus any Carryforward
Interest allocable to the Class A-3 Certificates, minus (B) the pro rata
portion of any Interest Shortfalls allocable to the Class A-3 Certificates
based on the Current Interest due on such Class of Certificates on such
Distribution Date, and (ii) to the extent unpaid on the Final Scheduled
Distribution Date, after payment of all other amounts due to the Class A-3
Certificates, any remaining Class Principal Balance of the Class A-3
Certificates.
"Insured Payment" means (a) as of any Distribution Date, any Deficiency
Amount and (b) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by facsimile substantially in the form of Exhibit A attached
hereto, the original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Payment which shall be
due and owing on the applicable Distribution Date.
"Owner" means each Class A-3 Certificateholder (as defined in the
Agreement) who, on the applicable Distribution Date, is entitled under the
terms of the applicable Certificates to payment thereunder.
"Preference Amount" means any amount previously distributed to an Owner
on the Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with
a final nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of this Policy, without giving effect to any subsequent amendment to or
modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be
made at the address listed below for the Fiscal Agent or such other address as
the Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006, Attention: Municipal Registrar and Paying Agency, or
such other address as the Fiscal Agent shall specify to the Trustee in
writing.
THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE CONSTRUED
UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this Policy
is not refundable for any reason, including payment, or provision being made
for payment, prior to maturity of the Obligations.
<PAGE>
IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed and
attested this 4th day of January, 2001.
MBIA INSURANCE CORPORATION
By /s/
--------------------------------
President
Attest:
By /s/
--------------------------------
Assistant Secretary
<PAGE>
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE
POLICY NUMBER: 34040
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 34040
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
15th Floor
61 Broadway
New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of [NAME OF TRUSTEE], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
34040 (the "Policy") issued by the Insurer in respect of the $45,653,000 DLJ
ABS Trust Series 2000-7 Mortgage Pass-Through Certificates, Series 2000-7
Class A-3 Certificates (the "Obligations"), that:
(a) the Trustee is the trustee under the Pooling and Servicing Agreement
dated as of December 1, 2000 among DLJ Mortgage Acceptance Corp., as
Depositor, Calmco Servicing L.P., as Servicer and Special Servicer, Old
Kent Mortgage Company, as Servicer, DLJ Mortgage Capital, Inc., as
Seller, and the Trustee, as trustee for the Owners;
(b) the amount due under clause (i) of the definition of Deficiency
Amount for the Distribution Date occurring on [ ] (the
"Applicable Distribution Date") is $[ ];
(c) the amount due under clause (ii) of the definition of Deficiency
Amount for the Applicable Distribution Date is $[ ];
(d) the sum of the amounts listed in paragraphs (b) and (c) above is
$[ ] (the "Deficiency Amount");
(e) the amount of previously distributed payments on the Obligations that
is recoverable and sought to be recovered as a voidable preference by a
trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with
a final nonappealable order of a court having competent jurisdiction is
$[ ] (the "Preference Amount");
(f) the total Insured Payment due is $[ ], which amount
equals the sum of the Deficiency Amount and the Preference Amount;
(g) the Trustee is making a claim under and pursuant to the terms of the
Policy for the dollar amount of the Insured Payment set forth in (d)
above to be applied to the payment of the Deficiency Amount for the
Applicable Distribution Date in accordance with the Agreement and for the
dollar amount of the Insured Payment set forth in (e) above to be applied
to the payment of any Preference Amount; and
(h) the Trustee directs that payment of the Insured Payment be made to
the following account by bank wire transfer of federal or other
immediately available funds in accordance with the terms of the Policy:
[TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined herein
shall have the meaning assigned thereto in the Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance Company Or
Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A
Civil Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The
Claim For Each Such Violation.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the [ ] day of [_________________], [_____].
[NAME OF TRUSTEE], as Trustee
By
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Title
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