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AMENDMENT NO. 1
Dated as of June 25, 2002
to
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2002
among
BEAR ▇▇▇▇▇▇▇ ASSET BACKED SECURITIES, INC.,
Depositor
EMC MORTGAGE CORPORATION,
Seller and Company
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator
and
BANK ONE, NATIONAL ASSOCIATION,
Trustee
______________________________________
BEAR ▇▇▇▇▇▇▇ ASSET BACKED SECURITIES TRUST 2002-AC1
ASSET-BACKED CERTIFICATES, SERIES 2002-AC1
______________________________________
THIS AMENDMENT NO. 1, dated as of June 25, 2002 (the "Amendment"), to
the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of January 1, 2002, among BEAR ▇▇▇▇▇▇▇ ASSET BACKED SECURITIES, INC., a
Delaware corporation, as depositor (the "Depositor"), EMC MORTGAGE CORPORATION,
a Delaware corporation, as seller (the "Seller") and company (the "Company"),
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator") and BANK ONE, NATIONAL
ASSOCIATION, a national banking association, as trustee (the "Trustee").
W I T N E S S E T H
WHEREAS, the Depositor, the Seller, the Company, the Master Servicer,
the Securities Administrator and the Trustee entered into the Pooling and
Servicing Agreement;
WHEREAS, the Depositor, the Seller, the Company, the Master Servicer,
the Securities Administrator and the Trustee desire to amend certain provisions
of the Pooling and Servicing Agreement to evidence that the servicing rights
with respect to certain of the Mortgage Loans and the Class XP Certificate has
been sold to CitiMortgage, Inc.
WHEREAS, Section 12.01 of the Pooling and Servicing Agreement provides
that the Pooling
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and Servicing Agreement may be amended by the Depositor, the Seller, the
Company, the Master Servicer, the Securities Administrator and the Trustee
without the consent of any of the Certificateholders to correct or supplement
any provisions contained in the Pooling and Servicing Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms.
For purposes of this Amendment, unless the context clearly requires
otherwise, all capitalized terms which are used but not otherwise defined herein
shall have the respective meanings assigned to such terms in the Pooling and
Servicing Agreement.
SECTION 2. The Amendments.
(a) Section 1.01 of the Pooling and Servicing Agreement is hereby
amended as follows:
(i) The following definitions are hereby added to Section 1.01
of the Pooling and Servicing Agreement:
COMPANY: Shall mean either (i) with respect to any EMC
Mortgage Loans for which the servicing rights related thereto
were sold by the Seller to CitiMortgage, Inc. pursuant to the
Purchase Agreement, CitiMortgage, Inc. and (ii) with respect
to any other EMC Mortgage Loan (including, without limitation,
EMC Mortgage Loans for which the servicing rights are required
to be repurchased or transferred pursuant to the Purchase
Agreement), EMC Mortgage Corporation.
INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the
Company and the Securities Administrator and their officers,
directors, agents and employees and, with respect to the
Trustee, any separate co-trustee and its officers, directors,
agents and employees.
LENDER PAID MORTGAGE INSURANCE POLICY or LPMI POLICY: A policy
of mortgage guaranty insurance issued by an insurer meeting
the requirements of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac in which the
servicer of the related Mortgage Loan is responsible for the
payment of the LPMI Fee thereunder from amounts collected on
the related Mortgage Loan.
LPMI FEE: Shall mean the fee payable to the insurer for each
Mortgage Loan subject to a LPMI Policy as set forth in such
LPMI Policy.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State
of Delaware, or any successor thereto.
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MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R)System.
MOM LOAN: With respect to any Mortgage Loan, MERS acting as
the mortgagee of such Mortgage Loan, solely as nominee for the
originator of such Mortgage Loan and its successors and
assigns, at the origination thereof.
PURCHASE AGREEMENT: Shall meant the Mortgage Servicing
Purchase and Sale Agreement, dated as of March 31, 2002, among
Bear, ▇▇▇▇▇▇▇ & Co., Inc., EMC Mortgage Corporation and
CitiMortgage, Inc.
(ii) The definition of "Certificate Notional Balance" is
hereby deleted in its entirety and replaced with the following:
"CERTIFICATE NOTIONAL BALANCE: As to any Class X-1 Certificate
and any Distribution Date, the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group I. As to any Class X-2 Certificate and any
Distribution Date, the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group II. As to any Class X-3 Certificate and any Distribution Date, the
aggregate Certificate Principal Balance of the Subordinated Certificates,
provided, however, for federal income tax purposes, the equivalent of the
foregoing, stated as the Uncertificated Principal Balance of REMIC I Regular
Interest LTI-B."
(iii) The definition of "Class X-1 Pass-Through Rate" is
hereby deleted in its entirety and replaced with the following:
"CLASS X-1 PASS-THROUGH RATE: On any Distribution Date, the
weighted average of the excess of (a) the Net Mortgage Rate on each Non-Discount
Mortgage Loan in Loan Group I over (b) 8.00% per annum. For federal income tax
purposes, however, the Class X-1 Certificates will not have a Class X-1
Pass-Through Rate, and the Accrued Certificate Interest for the Class X-1
Certificates and any Distribution Date will be deemed to be 100% of the amount
distributed on REMIC I Regular Interest LTI-XI for such Distribution Date."
(iv) The definition of "Class X-2 Pass-Through Rate" is hereby
deleted in its entirety and replaced with the following:
"CLASS X-2 PASS-THROUGH RATE: On any Distribution Date, the
weighted average of the excess of (a) the Net Mortgage Rate on each Non-Discount
Mortgage Loan in Loan Group II over (b) 8.00% per annum. For federal income tax
purposes, however, the Class X-2 Certificates will not have a Class X-2
Pass-Through Rate, and the Accrued Certificate Interest for the Class X-2
Certificates and any Distribution Date will be deemed to be 100% of the amount
distributed on
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REMIC I Regular Interest LTI-XII for such Distribution Date."
(v) The definition of "EMC Loans" is hereby deleted in its
entirety and replaced with the following:
"EMC MORTGAGE LOANS: Shall mean those Mortgage Loans serviced
by the Company pursuant to the terms of this Agreement."
(vi) The definition of "Insurance Policy" is hereby amended by
adding the words "or LPMI Policy" after the word "policy" in the second line
thereof.
(vii) Clause (i)(a) of the definition of "Interest Funds" is
hereby amended by adding the words "and the LPMI Fee, if any" before the comma
at the end thereof.
(viii) The definition of "Net Mortgage Rate" is hereby deleted
in its entirety and replaced with the following:
"NET MORTGAGE RATE: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate less the sum of
(i) the related Servicing Fee Rate, (ii) the Master Servicing
Fee Rate and (iii) the rate at which the LPMI Fee is
calculated."
(ix) The definition of "Prepayment Interest Shortfall" is
hereby deleted in its entirety and replaced with the following:
"PREPAYMENT INTEREST SHORTFALL: With respect to any
Distribution Date, for each Mortgage Loan that was the subject
of a partial Principal Prepayment, a Principal Prepayment in
full, or that became a Liquidated Loan during the related
Prepayment Period, (other than a Principal Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03, 4.21 or 11.01 hereof), the amount, if any,
by which (i) one month's interest at the Mortgage Rate (net of
the related Servicing Fee and the LPMI Fee, if any) on the
Stated Principal Balance of such Mortgage Loan immediately
prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment
(or liquidation proceeds) exceeds (ii) the amount of interest
paid or collected in connection with such Principal Prepayment
or such liquidation proceeds less the sum of (a) any
Prepayment Charges, (b) the related Servicing Fee and (c) the
LPMI Fee, if any."
(x) Clause (ii) of the definition of "Servicing Advances" is
hereby amended by adding the following at the end thereof:
"and including any expenses incurred in relation to any such
proceedings that result from the Mortgage Loan being
registered in the MERS(R) System"
(xi) Clause (iv) of the definition of "Servicing Advances" is
hereby amended by
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substituting the words "Sections 3.05 and 3.07" for the words "Section 3.09" in
the second the last line thereof.
(b) Clause (ii) of the fourth paragraph of Section 2.01 of the Pooling
and Servicing Agreement is hereby deleted in its entirety and replaced with the
following:
"(ii) the original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language
indicating that such Mortgage Loan is a MOM Loan, which shall
have been recorded (or if the original is not available, a
copy), with evidence of such recording indicated thereon (or
if clause (x) in the proviso below applies, shall be in
recordable form),"
(c) Clause (iii) of the fourth paragraph of Section 2.01 of the Pooling
and Servicing Agreement is hereby amended by adding "unless the Mortgage Loan is
a MOM Loan," at the beginning thereof.
(d) The proviso contained in the fourth paragraph of Section 2.01 of
the Pooling and Servicing Agreement is hereby deleted in its entirety and
replaced with the following:
; provided that the Seller need not cause to be recorded any
assignment if MERS is identified on the Mortgage or on a
properly recorded assignment of the Mortgage as the mortgagee
of record solely as nominee for Seller and its successor and
assigns."
(e) Section 2.01 of the Pooling and Servicing Agreement is hereby
amended by adding the following paragraph to the end thereof:
"In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Seller further agrees
that it will cause, at the Seller's own expense, on or before
the Transfer Date (as defined in the Purchase Agreement, the
MERS(R) System to indicate that such Mortgage Loans have been
assigned by the Seller to the Depositor and by the Depositor
to the Trustee in accordance with this Agreement for the
benefit of the Certificateholders by including (or deleting,
in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files (a) the
code in the field which identifies the specific Trustee and
(b) the code in the field "Pool Field" which identifies the
series of the Certificates issued in connection with such
Mortgage Loans. The Seller further agrees that it will not,
and will not permit any Subservicer or the Master Servicer to,
and the Master Servicer agrees that it will not, alter the
codes referenced in this paragraph with respect to any
Mortgage Loan during the term of this Agreement unless and
until such Mortgage Loan is repurchased in accordance with the
terms of this Agreement. With respect to any EMC Mortgage Loan
serviced by CitiMortgage, Inc. pursuant to the terms hereof,
the Seller shall notify MERS that CitiMortgage, Inc. is to be
added as servicer of record with respect thereto."
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(f) Section 2.03(b)(vii)(MM) of the Pooling and Servicing Agreement is
hereby amended by adding the words "from the date of origination of such
Mortgage Loan" to the end thereof.
(g) Section 2.03(b)(vii) of the Pooling and Servicing Agreement is
hereby amended by adding the following additional clauses to the end thereof:
"(NN) To the best of the Seller's knowledge, the subservicer
for each Mortgage Loan in Loan Group I has accurately and fully
reported its borrower credit files to each of the credit repositories
in a timely manner.
(OO) None of the proceeds of any Mortgage Loan in Loan Group I
were used to finance the purchase of single premium credit insurance
policies."
(h) The second paragraph of clause (c) of Section 2.03 of the Pooling
and Servicing Agreement is hereby amended by adding the following to the end
thereof:
"; provided, however, that this paragraph shall not apply to
CitiMortgage, Inc. in its capacity as Company if CitiMortgage, Inc. is the
Holder of the Class XP Certificate."
(i) The last sentence of the first paragraph of Section 3.01 of the
Pooling and Servicing Agreement is hereby amended by adding the following to the
end thereof:
"; provided, however, that this sentence shall not apply to
CitiMortgage, Inc. in its capacity as Company if CitiMortgage, Inc. is the
Holder of the Class XP Certificate."
(j) The last paragraph of Section 5.01(b) of the Pooling and Servicing
Agreement shall be amended by adding the following after the first sentence
thereof:
"In addition, notwithstanding clause (i) above, for so long as
CitiMortgage, Inc. is the Holder of the Class XP Certificate,
it shall be entitled to retain any Prepayment Charges
collected on the Mortgage Loans which it is servicing pursuant
hereto in its capacity as Company."
(k) Clause (b)(ii) of Section 5.01 of the Pooling and Servicing
Agreement is hereby deleted in its entirety and replaced with the following:
"(ii) all payments on account of interest on the EMC Mortgage
Loans, net of the related Servicing Fee Rate, any Prepayment
Charges and the LPMI Fee, if any;"
(l) The last sentence of the second to last paragraph of Section 5.02
of the Pooling and Servicing Agreement is hereby amended by adding the following
to the end thereof:
"; provided, however, that this sentence shall not apply to
CitiMortgage, Inc. in its capacity as Company if CitiMortgage, Inc. is the
Holder of the Class XP Certificate."
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(m) Clause (c)(i) of Section 5.04 of the Pooling and Servicing
Agreement is hereby deleted in its entirety and replaced with the following:
"(ii) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the Company or the
Servicers pursuant to the Servicing Agreements which were due
on or before the related Due Date, net of the amount thereof
comprising the Servicing Fees and the LPMI Fees, if any;"
(n) Clause (c)(ii) of Section 5.04 of the Pooling and Servicing
Agreement is hereby deleted in its entirety and replaced with the following:
"(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the Company or the Servicers with respect to such Mortgage Loans in
the related Prepayment Period, with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the Servicing Fees and the
LPMI Fees, if any;"
(o) Article XI of the Pooling and Servicing is hereby amended to
replace references therein to "the Company" to "EMC".
SECTION 3. Tax Reporting.
CitiMortgage, Inc., by its agreement and acknowledgment hereof, hereby
agrees to report, on an annual basis, the amount of Prepayment Charges collected
and retained by CitiMortgage with respect to the EMC Mortgage Loans which
obligation will continue for so long as CitiMortgage is the holder of the Class
XP Certificate.
SECTION 4. CitiMortgage, Inc. bound by Pooling and Servicing Agreement.
CitiMortgage, Inc., by its agreement and acknowledgment hereof, hereby
agrees to service and administer the EMC Mortgage Loans serviced by it pursuant
to the terms and conditions of the Pooling and Servicing Agreement as amended
pursuant to the terms hereof and agrees to be bound as "Company" by the
provisions of the Pooling and Servicing Agreement, as amended pursuant to the
terms hereof, as if it were originally named Company thereunder.
SECTION 5. Fair Credit Reporting Act.
Each of EMC Mortgage Corporation and CitiMortgage, Inc., by its
execution of this Amendment, hereby covenants to furnish, on a monthly basis, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete borrower credit files to Equifax, Experian and the
TransUnion Credit Information Company with respect to each EMC Mortgage Loan
subject to the Pooling and Servicing Agreement.
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SECTION 6. Effect of Amendment.
Upon execution of this Amendment, the Pooling and Servicing Agreement
shall be, and be deemed to be, modified and amended in accordance herewith and
the respective rights, limitations, obligations, duties, liabilities and
immunities of the Seller, the Company, the Master Servicer, the Depositor, the
Trustee and the Securities Administrator shall hereafter be determined,
exercised and enforced subject in all respects to such modifications and
amendments, and all the terms and conditions of this Amendment shall be deemed
to be part of the terms and conditions of the Pooling and Servicing Agreement
for any and all purposes. Except as modified and expressly amended by this
Amendment, the Pooling and Servicing Agreement is in all respects ratified and
confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.
SECTION 7. Binding Effect.
The provisions of this Amendment shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Seller, the Company, the
Master Servicer, the Depositor, the Trustee and the Securities Administrator.
SECTION 8. Governing Law.
This Amendment shall be construed in accordance with the substantive
laws of the State of New York (without regard to conflict of law principles) and
the obligations, rights and remedies of the parties hereto shall be determined
in accordance with such laws.
SECTION 9. Severability of Provisions.
If any one or more of the provisions or terms of this Amendment shall
be for any reason whatsoever held invalid, then such provisions or terms shall
be deemed severable from the remaining provisions or terms of this Amendment and
shall in no way affect the validity or enforceability of the other provisions or
terms of this Amendment.
SECTION 10. Section Headings.
The section headings herein are for convenience of reference only, and
shall not limit or otherwise affect the meaning hereof.
SECTION 11. Counterparts.
This Amendment may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
[signature pages follow]
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IN WITNESS WHEREOF, the Depositor, the Company, the Seller, the Master
Servicer, the Trustee and the Securities Administrator have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
BEAR ▇▇▇▇▇▇▇ ASSET BACKED
SECURITIES, INC.,
as Depositor
By:/s/: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
EMC MORTGAGE CORPORATION,
as Seller and Company
By: /s/:▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Master Servicer and
Securities Administrator
By:/s/: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
BANK ONE, NATIONAL ASSOCIATION
as Trustee
By: /s/: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
ACKNOWLEDGED AND AGREED:
CITIMORTGAGE, INC.
By: /s/: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President