EXHIBIT 4.1
[EXECUTION VERSION]
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor,
OCWEN FEDERAL BANK FSB,
as Servicer,
CDC MORTGAGE CAPITAL INC.,
as Unaffiliated Seller,
and
Deutsche Bank National Trust Company,
as Trustee,
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2002
CDC MORTGAGE CAPITAL TRUST 2002-HE1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2002-HE1
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.............................................................................................5
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES..........................................37
Section 2.01 Conveyance of Mortgage Loans...............................................................37
Section 2.02 Acceptance by the Trustee of the Mortgage Loans............................................42
Section 2.03 Representations, Warranties and Covenants of the Unaffiliated Seller
and the Servicer...........................................................................43
Section 2.04 The Depositor and the Mortgage Loans.......................................................47
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and
Non-Qualified Mortgages....................................................................47
Section 2.06 Execution and Delivery of Certificates.....................................................47
Section 2.07 REMIC Matters..............................................................................48
Section 2.08 Representations and Warranties of the Depositor............................................48
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.......................................................49
Section 3.01 Servicer to Service Mortgage Loans.........................................................49
Section 3.02 Subservicing Agreements Between the Servicer and Subservicers..............................51
Section 3.03 Successor Subservicers.....................................................................52
Section 3.04 Liability of the Servicer..................................................................52
Section 3.05 No Contractual Relationship Between Subservicers and the Trustee...........................53
Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee............................53
Section 3.07 Collection of Certain Mortgage Loan Payments; Establishment of Certain Accounts............53
Section 3.08 Subservicing Accounts......................................................................56
Section 3.09 Collection of Taxes, Assessments and Similar Items; Escrow Accounts........................56
Section 3.10 Collection Account.........................................................................57
Section 3.11 Withdrawals from the Collection Account....................................................59
Section 3.12 Investment of Funds in the Account.........................................................60
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage.............61
Section 3.14 Enforcement of Due-On-Sale Clauses Assumption Agreements...................................63
Section 3.15 Realization Upon Defaulted Mortgage Loans..................................................64
Section 3.16 Release of Mortgage Files..................................................................65
Section 3.17 Title, Conservation and Disposition of REO Property........................................66
Section 3.18 Notification of Adjustments................................................................68
Section 3.19 Access to Certain Documentation and Information Regarding the Mortgage Loans...............68
Section 3.20 Documents, Records and Funds in Possession of the Servicer to be Held for the Trustee......68
Section 3.21 Servicing Compensation.....................................................................69
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Section 3.22 Annual Statement as to Compliance..........................................................69
Section 3.23 Annual Independent Public Accountants' Servicing Statement; Financial Statements...........70
Section 3.24 Trustee to Act as Servicer.................................................................70
Section 3.25 Compensating Interest......................................................................71
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act...................................................71
Section 3.27 Advance Facilities.........................................................................71
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER............................................................73
Section 4.01 Advances...................................................................................73
Section 4.02 Priorities of Distribution.................................................................74
Section 4.03 Monthly Statements to Certificateholders...................................................77
Section 4.04 Certain Matters Relating to the Determination of LIBOR.....................................81
Section 4.05 The Class A Insurance Policy...............................................................81
Section 4.06 Effect of Payments by the Class A Certificate Insurer; Subrogation.........................83
ARTICLE V THE CERTIFICATES.......................................................................................84
Section 5.01 The Certificates...........................................................................84
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates................84
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..........................................89
Section 5.04 Persons Deemed Owners......................................................................89
Section 5.05 Access to List of Certificateholders' Names and Addresses..................................90
Section 5.06 Maintenance of Office or Agency............................................................90
Section 5.07 Rights of the Class A Certificate Insurer to Exercise Rights of Class A
Certificateholders.........................................................................90
Section 5.08 Trustee To Act Solely with Consent of the Class A Certificate Insurer......................91
Section 5.09 Mortgage Loans, Trust Fund and Accounts Held for Benefit of the Class A
Certificate Insurer........................................................................91
Section 5.10 Class A Certificate Insurer Default........................................................92
ARTICLE VI THE DEPOSITOR AND THE SERVICER........................................................................92
Section 6.01 Respective Liabilities of the Depositor and the Servicer...................................92
Section 6.02 Merger or Consolidation of the Depositor or the Servicer...................................92
Section 6.03 Limitation on Liability of the Depositor, the Servicer and Others..........................93
Section 6.04 Limitation on Resignation of the Servicer..................................................94
Section 6.05 Additional Indemnification by the Servicer; Third Party Claims.............................94
ARTICLE VII DEFAULT..............................................................................................94
Section 7.01 Events of Default..........................................................................94
Section 7.02 Trustee to Act; Appointment of Successor...................................................96
Section 7.03 Notification to Certificateholders.........................................................97
ARTICLE VIII CONCERNING THE TRUSTEE..............................................................................98
Section 8.01 Duties of the Trustee......................................................................98
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Section 8.02 Certain Matters Affecting the Trustee......................................................99
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.....................................100
Section 8.04 Trustee May Own Certificates..............................................................100
Section 8.05 Trustee's Fees and Expenses...............................................................100
Section 8.06 Eligibility Requirements for the Trustee..................................................101
Section 8.07 Resignation and Removal of the Trustee....................................................101
Section 8.08 Successor Trustee.........................................................................102
Section 8.09 Merger or Consolidation of the Trustee....................................................102
Section 8.10 Appointment of Co-Trustee or Separate Trustee.............................................102
Section 8.11 Tax Matters...............................................................................104
Section 8.12 Periodic Filings..........................................................................106
Section 8.13 Tax Classification of Certain Accounts....................................................106
ARTICLE IX TERMINATION..........................................................................................107
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage Loans............................107
Section 9.02 Final Distribution on the Certificates....................................................107
Section 9.03 Additional Termination Requirements.......................................................108
ARTICLE X MISCELLANEOUS PROVISIONS..............................................................................109
Section 10.01 Amendment.................................................................................109
Section 10.02 Recordation of Agreement; Counterparts....................................................111
Section 10.03 Governing Law.............................................................................111
Section 10.04 Intention of Parties......................................................................111
Section 10.05 Notices...................................................................................112
Section 10.06 Severability of Provisions................................................................113
Section 10.07 Assignment................................................................................113
Section 10.08 Limitation on Rights of Certificateholders................................................113
Section 10.09 Inspection and Audit Rights...............................................................114
Section 10.10 Certificates Nonassessable and Fully Paid.................................................114
Section 10.11 The Class A Certificate Insurer Default...................................................114
Section 10.12 Third Party Beneficiary...................................................................115
Section 10.13 Waiver of Jury Trial......................................................................115
SCHEDULES
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Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of the Servicer
Schedule III Representations and Warranties as to the Unaffiliated Seller
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EXHIBITS
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Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Final Certification of Trustee
Exhibit G Form of Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Subsequent Transfer Agreement
Exhibit L Form of FDIC Claim
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THIS POOLING AND SERVICING AGREEMENT, dated as of April 1,
2002, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC., a Delaware corporation, as
depositor (the "DEPOSITOR"), OCWEN FEDERAL BANK FSB, a federally chartered
savings bank, as servicer (the "Servicer"), CDC MORTGAGE CAPITAL INC., a New
York corporation, as unaffiliated seller (the "UNAFFILIATED SELLER") and
DEUTSCHE BANK NATIONAL TRUST COMPANY (f/k/a Bankers Trust Company of California,
N.A.), a national banking association, as trustee (the "TRUSTEE"),
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that two segregated asset pools within
the Trust Fund be treated for federal income tax purposes as comprising two
REMICs (each a "REMIC" or, in the alternative, the Lower Tier REMIC and the
Upper Tier REMIC, respectively). Each Certificate, other than the Class P and
Class R Certificates, represents ownership of a regular interest in the Upper
Tier REMIC for purposes of the REMIC Provisions. The Class R Certificate
represents ownership of the sole class of residual interest in each of the Lower
Tier REMIC and the Upper Tier REMIC for purposes of the REMIC Provisions. The
Startup Day for each REMIC described herein is the Closing Date. The latest
possible maturity date for each regular interest is the date referenced for such
regular interests in this preliminary statement. The Upper Tier REMIC shall hold
as assets the several classes of uncertificated Lower Tier Regular Interests,
set out below. Each such Lower Tier Regular Interest is hereby designated as a
regular interest in the Lower Tier REMIC. Class LT-A, Class LT-M and Class LT-B
are hereby designated the LT Accretion Directed Classes. The Class P Certificate
represents beneficial ownership of the Prepayment Charges, which portion of the
Trust Fund shall be treated as a grantor trust.
CORRESPONDING
LOWER TIER LOWER TIER INITIAL LOWER TIER UPPER TIER LATEST POSSIBLE
CLASS DESIGNATION INTEREST RATE PRINCIPAL AMOUNT REMIC CLASS MATURITY DATE
----------------- ------------- ------------------------------------------ ------------ ----------------
Class LT-A (1) 1/2 initial Corresponding Upper Tier REMIC A January 25, 2033
initial principal balance
Class LT-M (1) 1/2 initial Corresponding Upper Tier REMIC M January 25, 2033
initial principal balance
Class LT-B (1) 1/2 initial Corresponding Upper Tier REMIC B January 25, 2033
initial principal balance
Class LT-Accrual (1) 1/2 Pool Balance plus 1/2 Subordinated Amount January 25, 2033
Class LT-R (2) (2)
(1) The interest rate with respect to any Distribution Date for these interests
is a per annum variable rate equal to the WAC Cap.
(2) The Class LT-R Interest is the sole class of residual interest in the Lower
Tier REMIC and it does not have a principal amount or an interest rate.
The Lower Tier REMIC shall hold as assets all of the assets
included in the Trust Fund other than Prepayment Charges, the Excess Reserve
Fund Account, and the Lower Tier Regular Interests.
On each Distribution Date, 50% of the increase in the
Subordinated Amount will be payable as a reduction of the principal balances of
the LT Accretion Directed Classes (each such Class will be reduced by an amount
equal to 50% of any increase in the Subordinated Amount that is attributable to
a reduction in the principal balance of its Corresponding Class) and will be
accrued and added to the principal balance of the LT Accrual Class. On each
Distribution Date, the increase in the principal balance of the LT Accrual Class
may not exceed interest accruals for such Distribution Date for the LT Accrual
Class. In the event that: (i) 50% of the increase in the Subordinated Amount
exceeds (ii) interest accruals on the LT Accrual Class for such Distribution
Date, the excess for such Distribution Date (accumulated with all such excesses
for all prior Distribution Dates) will be added to any increase in the
Subordinated Amount for purposes of determining the amount of interest accrual
on the LT Accrual Class payable as principal on the LT Accretion Directed
Classes on the next Distribution Date pursuant to the first sentence of this
paragraph. All payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans shall be allocated 50% to the LT Accrual Class,
and 50% to the LT Accretion Directed Classes (principal payments shall be
allocated among such LT Accretion Directed Classes in an amount equal to 50% of
the principal amounts allocated to their respective Corresponding Classes),
until paid in full. Notwithstanding the above, principal payments allocated to
the Class X Certificates that result in the reduction in the Subordinated Amount
shall be allocated to the LT Accrual Class (until paid in full). Realized losses
shall be applied so that after all distributions have been made on each
Distribution Date (i) the principal balances of each of the LT Accretion
Directed Class is equal to 50% of the principal balance of their Corresponding
Class, and (ii) the LT Accrual Class is equal to 50% of the aggregate principal
balance of the Mortgage Pool plus 50% of the Subordinated Amount.
The Upper Tier REMIC shall issue the following classes of
interests and each Upper Tier Interest, other than the Class UT-R Interest, is
hereby designated as a regular interest in the Upper Tier REMIC.
UPPER TIER
UPPER TIER INTEREST INITIAL UPPER TIER CORRESPONDING
CLASS DESIGNATION RATE PRINCIPAL AMOUNT CERTIFICATE LATEST POSSIBLE MATURITY DATE
------------------ ----------- ------------------- ------------- -----------------------------
Class A (1) $ 449,238,000 Class A(5) January 25, 2033
Class M (2) $ 25,381,000 Class M(5) January 25, 2033
Class B (2) $ 25,381,000 Class B(5) January 25, 2033
Class X (3) (3) Class X(3) January 25, 2033
Class UT-R (4) Class R January 25, 2033
(1) The Class A Interests will bear interest during each Interest Accrual Period
thereafter at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i)
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LIBOR plus 0.31%, (ii) 16%, and (iii) the WAC Cap or (b) after the Optional
Termination Date, the least of (i) LIBOR plus 0.62%, (ii) 16%, and (iii) the
WAC Cap.
(2) The Class M and Class B Interests will bear interest during each Interest
Accrual Period thereafter at a per annum rate equal to (a) on or prior to
the Optional Termination Date, the least of (i) LIBOR plus 1.25% and 2.75%,
respectively, (ii) 16%, and (iii) the WAC Cap or (b) after the Optional
Termination Date, the least of (i) LIBOR plus 1.875% and 4.125%,
respectively, (ii) 16%, and (iii) the WAC Cap.
(3) The Class X Interest has an initial principal balance of $7,614,113, but it
will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the principal balances of the Lower Tier Regular Interests as of the first
day of the related Interest Accrual Period. With respect to any Interest
Accrual Period, the Class X Interest shall bear interest at a rate equal to
the excess, if any, of the WAC Cap over the product of (i) 2 and (ii) the
weighted average Pass-Through Rate of the Lower Tier REMIC Interests, where
the LT Accrual Class is subject to a cap equal to zero and each LT Accretion
Directed Class is subject to a cap equal to the Pass-Through Rate on its
Corresponding Class. With respect to any Distribution Date, interest that so
accrues on the notional principal balance of the Class X Interest shall be
deferred in an amount equal to any increase in the Subordinated Amount on
such Distribution Date. Such deferred interest shall not itself bear
interest.
(4) The Class UT-R Interest is the sole class of residual interest in the Upper
Tier REMIC. The Class UT-R Interest does not have an interest rate.
(5) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account in respect of any
Basis Risk CarryForward Amounts. For federal income tax purposes, the
Trustee will treat a Certificateholder's right to receive payments from the
Excess Reserve Fund Account as payments made pursuant to an interest rate
cap contract written by the Class X Certificateholder.
The minimum denomination for each Class of Certificates, other
than the Class P, Class R and the Class X Certificates, will be $25,000. The
Class P, Class R and the Class X Certificates will each represent a 100%
Percentage Interest in such class.
Set forth below are designations of Classes of Certificates to
the categories used herein:
Book-Entry Certificates................. All Classes of Certificates other than the Physical
Certificates.
Subordinated Certificates............... Class M and Class B Certificates.
Delay Certificates...................... None.
ERISA-Restricted Certificates........... Class R Certificates, Class P Certificate and Class X
Certificate; any certificate with a rating below the lowest
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applicable permitted rating under the Underwriters'
Exemption.
Floating Rate Certificates.............. Class A and Subordinated Certificates.
LIBOR Certificates...................... Class A and Subordinated Certificates.
Non-Delay Certificates.................. Class A, Class X and Subordinated Certificates.
Offered Certificates.................... All Classes of Certificates other than the Private Certificates.
Physical Certificates................... Class P, Class X and Class R Certificates.
Private Certificates.................... Class P, Class X and Class R Certificates.
Rating Agencies......................... Moody's, Fitch, Inc. and Standard & Poor's.
Regular Certificates.................... All Classes of Certificates other than the Class P and Class R
Certificates.
Residual Certificates................... Class R Certificates.
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ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
60+ DAY DELINQUENT LOAN: Each Mortgage Loan with respect to
which any portion of a Scheduled Payment is, as of the last day of the prior Due
Period, two months or more past due (without giving effect to any grace period),
each Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for
which the Mortgagor has filed for bankruptcy.
ACCEPTED SERVICING PRACTICES: With respect to any Mortgage
Loan, those mortgage servicing practices set forth in Section 3.01 of this
Agreement.
ACCOUNT: Any of the Capitalized Interest Account, the
Collection Account, the Simple Interest Excess Sub-Account, the Distribution
Account, any Escrow Account, the Excess Reserve Fund Account, the Class A
Insurance Payment Account or the Pre-Funding Account. Each Account shall be an
Eligible Account.
ACCRUED CERTIFICATE INTEREST DISTRIBUTION AMOUNT: With respect
to any Distribution Date for each Class of Certificates (other than the Class X
Certificate), the amount of interest accrued during the related Interest Accrual
Period at the applicable Pass-Through Rate on the related Class Certificate
Balance immediately prior to such Distribution Date, as reduced by such Class's
share of Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
for the related Due Period allocated to such Class pursuant to Section 4.02.
ADDITION NOTICE: A written notice from the Unaffiliated Seller
to the Trustee, the Rating Agencies and the Class A Certificate Insurer that the
Unaffiliated Seller desires to make a Subsequent Transfer.
ADJUSTABLE RATE MORTGAGE LOAN: A Mortgage Loan bearing
interest at an adjustable rate.
ADJUSTED MORTGAGE RATE: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
ADJUSTED NET MORTGAGE RATE: As to each Mortgage Loan and at
any time, the per annum rate equal to the Mortgage Rate less the Expense Fee
Rate.
ADJUSTMENT DATE: As to any Mortgage Loan, the first Due Date
on which the related Mortgage Rate adjusts as set forth in the related Mortgage
Note and each Due Date thereafter on which the Mortgage Rate adjusts as set
forth in the related Mortgage Note.
ADVANCES: Collectively, the P&I Advances and Servicing
Advances.
ADVANCE FACILITY: As defined in Section 3.27.
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ADVANCE FACILITY TRUSTEE: As defined in Section 3.27.
ADVANCE REIMBURSEMENT AMOUNT: As defined in Section 3.27.
ADVANCING PERSON: As defined in Section 3.27.
AFFILIATE: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
AGREEMENT: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to the Certificates on
any Distribution Date, the aggregate amount held in the Collection Account at
the close of business on the related Determination Date on account of (i)
Principal Prepayments and Liquidation Proceeds on the Mortgage Loans received
after the end of the related Prepayment Period and (ii) all Scheduled Payments
on the Mortgage Loans due after the end of the related Due Period.
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class Certificate Balance of
the Regular Certificates after distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
APPRAISED VALUE: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
ASSIGNMENT AND RECOGNITION AGREEMENT: The BNC Assignment
Agreement, the CIT Assignment Agreement, the IFC Assignment Agreement, the NC
Assignment Agreement or the Superior Assignment Agreement, as applicable.
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form, (other than the
assignee's name and recording information not yet returned from the recording
office), reflecting the sale of the Mortgage to the Trustee.
BALLOON LOAN: Any Mortgage Loan that provided on the date of
origination for an amortization schedule extending beyond its stated maturity
date.
BASIC PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
BASIS RISK CARRYFORWARD AMOUNT: With respect to each Class of
Regular Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Regular Certificates is
based upon the WAC Cap, the excess
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of (i) the amount of interest such Class of Certificates would otherwise be
entitled to receive on such Distribution Date had such rate been calculated as
the sum of LIBOR and the applicable Pass-Through Margin on such Class of
Certificates for such Distribution Date, up to 16% over (ii) the amount of
interest payable on such Class of Certificates calculated at the WAC Cap for
such Distribution Date and (B) the Basis Risk CarryForward Amount for such Class
of Certificates for all previous Distribution Dates not previously paid,
together with interest thereon at a rate equal to the sum of LIBOR and the
applicable Pass-Through Margin for such Class of Certificates for such
Distribution Date, up to 16%.
BASIS RISK PAYMENT: For any Distribution Date, an amount equal
to any Basis Risk CarryForward Amount, provided, however, that with respect to
any Distribution Date, the payment cannot exceed the amounts otherwise
distributable on the Class X Certificates.
BEST'S: Best's Key Rating Guide, as the same shall be amended
from time to time.
BNC: BNC Mortgage, Inc., a Delaware corporation.
BNC ASSIGNMENT AGREEMENT: The Assignment and Recognition
Agreement, dated as of April 30, 2002, by and among the Unaffiliated Seller, the
Depositor and BNC, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and BNC in connection with any
Subsequent Transfer of BNC Mortgage Loans.
BNC MORTGAGE LOAN: A Mortgage Loan which was acquired from BNC
by the Unaffiliated Seller pursuant to the BNC Purchase Agreement, and which has
been acquired by the Trust Fund.
BNC PURCHASE AGREEMENT: The Mortgage Loan Purchase and
Warranties Agreement, dated as of February 26, 2002, by and between the
Unaffiliated Seller and BNC.
BOOK-ENTRY CERTIFICATES: As specified in the Preliminary
Statement.
BUSINESS DAY: Any day other than (i) Saturday or Sunday, or
(ii) a day on which banking and savings and loan institutions, in (a) the State
of New York, New Jersey and Florida, (b) the state in which the Servicer's
servicing operations are located, or (c) the State in which the Trustee's
operations are located, are authorized or obligated by law or executive order to
be closed.
CAPITALIZED INTEREST ACCOUNT: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 3.07(e) in the name of
the Trustee for the benefit of the Offered Certificateholders and designated
"Deutsche Bank National Trust Company, in trust for registered holders of CDC
Mortgage Capital Trust 2002-HE1, Mortgage Pass-Through Certificates, Series
2002-HE1".
CAPITALIZED INTEREST REQUIREMENT: With respect to the
Distribution Dates occurring in May 2002, June 2002 and July 2002, the excess,
if any, of (x) the Accrued Certificate Interest Distribution Amounts for all
classes of the Offered Certificates for such Distribution Date over (y) the sum
of (i) all scheduled installments of interest (net of the related
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Expense Fees) due on the Mortgage Loans in the related Due Period plus (ii) the
Pre-Funding Earnings available for deposit to the Distribution Account on such
Distribution Date. In no event will the Capitalized Interest Requirement be less
than zero.
CERTIFICATE: Any one of the Certificates executed by the
Trustee in substantially the forms attached hereto as exhibits.
CERTIFICATE BALANCE: With respect to any Class of
Certificates, other than the Class R Certificate, at any date, the maximum
dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and in the case
of any Subordinated Certificates, reduced by any Applied Realized Loss Amounts
applicable to such Class of Subordinated Certificates. The Class R Certificate
has no Certificate Balance.
CERTIFICATE INSURANCE POLICY: The Financial Guaranty Insurance
Policy No. 51276-N, and all endorsements thereto dated the Closing Date, issued
by the Class A Certificate Insurer for the benefit of the Class A
Certificateholders.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate.
CERTIFICATE REGISTER: The register maintained pursuant to
Section 5.02.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor or any affiliate of the Depositor shall
be deemed not to be Outstanding and the Percentage Interest evidenced thereby
shall not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
PROVIDED, HOWEVER, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a particular
Class as a condition to the taking of any action hereunder. The Trustee is
entitled to rely conclusively on a certification of the Depositor or any
affiliate of the Depositor in determining which Certificates are registered in
the name of an affiliate of the Depositor.
CIT: Collectively, The CIT Group/Consumer Finance, Inc., a
Delaware corporation, The CIT Group/Consumer Finance, Inc. (NY), a New York
corporation, and The CIT Group/Consumer Finance, Inc. (TN), a Delaware
corporation.
CIT ASSIGNMENT AGREEMENT: The Assignment and Recognition
Agreement, dated as of April 30, 2002, by and among the Unaffiliated Seller, the
Depositor and CIT, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and CIT in connection with any
Subsequent Transfer of CIT Mortgage Loans.
CIT MORTGAGE LOAN: A Mortgage Loan which was acquired from CIT
by the Unaffiliated Seller pursuant to the CIT Purchase Agreement, and which has
been acquired by the Trust Fund.
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CIT PURCHASE AGREEMENT: The Mortgage Loan Purchase and
Warranties Agreement, dated as of February 23, 2002, by and between the
Unaffiliated Seller and CIT.
CLASS: All Certificates bearing the same class designation as
set forth in the Preliminary Statement.
CLASS A CERTIFICATE INSURER: Financial Security Assurance
Inc., a monoline stock insurance company organized and created under the laws of
the State of New York, and any successors thereto.
CLASS A CERTIFICATE INSURER DEFAULT: The existence and
continuance of any of the following:
(a) the Class A Certificate Insurer shall have failed to make
a required payment when due under the Class A Insurance Policy;
(b) the Class A Certificate Insurer shall have (i) filed a
petition or commenced any case or proceeding under any provision or
chapter of the United States Bankruptcy Code, the New York State
Insurance Law or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation, or reorganization,
(ii) made a general assignment for the benefit of its creditors or
(iii) had an order for relief entered against it under the United
States Bankruptcy Code, the New York State Insurance Law or any other
similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation, or reorganization that is final and
nonappealable; or
(c) a court of competent jurisdiction, the New York Department
of Insurance or any other competent regulatory authority shall have
entered a final and nonappealable order, judgment or decree (i)
appointing a custodian, trustee, agent, or receiver for the Certificate
Insurer or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, trustee, agent, or
receiver of the Certificate Insurer or of all or any material portion
of its property.
CLASS A CERTIFICATES: All Certificates bearing the class
designation of "Class A Certificates".
CLASS A DEFICIENCY: With respect to any Distribution Date and
the Class A Certificates, an amount equal to the excess of the sum of:
(i) the excess of (x) the Accrued Certificate Interest
Distribution Amount for the Class A Certificates on such Distribution Date, over
(y) the Interest Amount Available, less the Premium Amount and the Trustee Fee,
in each case for such Distribution Date; plus
(ii) the Class A Principal Parity Amount, if any, for such
Distribution Date.
9
CLASS A INSURANCE PAYMENT ACCOUNT: The separate Eligible
Account created and maintained by the Trustee pursuant to Section 4.05(c) in the
name of the Trustee for the benefit of the Class A Certificateholders and the
Class A Certificate Insurer, and designated "Deutsche Bank National Trust
Company, in trust for Financial Security Assurance Inc. and the registered
holders of CDC Mortgage Capital Trust 2002-HE1, Mortgage Pass-Through
Certificates, Series 2002-HE1."
CLASS A PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 77.00%, of the aggregate Stated Principal Balance of the
Mortgage Loans for that Distribution Date and (B) the Stated Principal Balances
of the Mortgage Loans for that Distribution Date minus the Floor Amount.
CLASS A PRINCIPAL PARITY AMOUNT: With respect to any
Distribution Date, the excess, if any, of (i) the aggregate Class Certificate
Balance of the Class A Certificates on that Distribution Date, after taking into
account any reduction therein on such Distribution Date from sources other than
the Class A Insurance Policy over (ii) the sum of the Pool Stated Principal
Balance plus the Pre-Funding Amount, as of the last day of the related Due
Period.
CLASS B CERTIFICATES: All Certificates bearing the class
designation of "Class B Certificates".
CLASS B PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M Certificates (after
taking into account distribution of the Class M Principal Distribution Amount on
such Distribution Date), and (C) the Class Certificate Balance of the Class B
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 97.00% of the aggregate Stated Principal Balance of the Mortgage Loans for
that Distribution Date and (B) the Stated Principal Balances of the Mortgage
Loans for that Distribution Date MINUS the Floor Amount; PROVIDED, HOWEVER, that
with respect to any Distribution Date on which the Class Certificate Balances of
the Class A and Class M Certificates have been reduced to zero, the Class B
Principal Distribution Amount is the lesser of (x) the Class Certificate Balance
of the Class B Certificates and (y) the Principal Distribution Amount.
CLASS CERTIFICATE BALANCE: With respect to any Class and as to
any date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
CLASS M CERTIFICATES: All Certificates bearing the class
designation of "Class M Certificates".
CLASS M PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), and (B) the Class Certificate Balance of the Class M Certificates
10
immediately prior to such Distribution Date over (ii) the lesser of (A) 87.00%
of the aggregate Stated Principal Balance of the Mortgage Loans for that
Distribution Date and (B) the Stated Principal Balances of the Mortgage Loans
for that Distribution Date minus the Floor Amount.
CLASS P CERTIFICATES: All Certificates bearing the class
designation of "Class P Certificates".
CLASS R CERTIFICATES: All Certificates bearing the class
designation of "Class R Certificates".
CLASS X CERTIFICATES: All Certificates bearing the designation
of "Class X Certificates".
CLASS X DISTRIBUTABLE AMOUNT: On any Distribution Date, the
sum of (i) the amount of interest that has accrued on the Class X Regular
Interest and not applied as an Extra Principal Distribution Amount on such
Distribution Date, plus any such accrued interest remaining undistributed from
prior Distribution Dates, and (ii) any portion of the principal balance of the
Class X Regular Interest which is distributable as a Subordination Reduction
Amount, less any amounts paid as a Basis Risk Payment.
CLOSING DATE: April 30, 2002.
CODE: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
COLLECTION ACCOUNT: As defined in Section 3.10(a).
COMPENSATING INTEREST: For any Distribution Date, the lesser
of (a) the Prepayment Interest Shortfall, if any, for the Distribution Date, and
(b) the amount of the Servicing Fee payable to the Servicer for such
Distribution Date.
CONDEMNATION PROCEEDS: All awards of settlements in respect of
a Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
CORPORATE TRUST OFFICE: The designated office of the Trustee
in the State of California at which at any particular time its corporate trust
business with respect to this Agreement is administered, which office at the
date of the execution of this Agreement is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Trust Administration-DC02M1, facsimile
no. (▇▇▇) ▇▇▇-▇▇▇▇ and which is the address to which notices to and
correspondence with the Trustee should be directed.
CORRESPONDING CLASS: The class of interests in any REMIC
created under this Agreement that correspond to the Class of interests in
another such REMIC or to a Class of Certificates in the manner set out below:
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LOWER TIER UPPER TIER CORRESPONDING
CLASS DESIGNATION INTEREST CERTIFICATE
------------------- -------------- ----------------
Class LT-A Class A Class A
Class LT-M Class M Class M
Class LT-B Class B Class B
CUMULATIVE LOSS PERCENTAGE: With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Applied Realized Loss Amounts incurred from the Cut-off Date
to the last day of the preceding calendar month and the denominator of which is
the Scheduled Principal Balance of the Mortgage Loans as of the Cut-off Date.
CUSTODIAL FILE: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (i) - (viii) of Section 2.01(c).
CUT-OFF DATE: With respect to the Initial Mortgage Loans,
April 1, 2002, and with respect to each Subsequent Mortgage Loan, the related
Subsequent Cut-off Date.
CUT-OFF DATE POOL PRINCIPAL BALANCE: The aggregate Stated
Principal Balances of all Mortgage Loans as of the Cut-off Date.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off
Date.
DATA TAPE INFORMATION: The information provided by the
Unaffiliated Seller as of April 1, 2002 to the Depositor setting forth the
following information with respect to each Mortgage Loan: (1) the Mortgagor's
name; (2) as to each Mortgage Loan, the Scheduled Principal Balance as of the
Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating
whether the Mortgaged Property is owner-occupied; (6) the type of Mortgaged
Property; (7) the first date on which the Monthly Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (8) the "paid through date" based on payments received
from the related Mortgagor; (9) the original principal amount of the Mortgage
Loan; (10) with respect to Adjustable Rate Mortgage Loans, the Maximum Mortgage
Rate; (11) the type of Mortgage Loan (I.E., fixed, adjustable, simple interest);
(12) a code indicating the purpose of the loan (I.E., purchase, rate and term
refinance, equity take-out refinance); (13) a code indicating the documentation
style (I.E., full, asset verification, income verification and no
documentation); (14) the credit risk score (FICO score); (15) the loan credit
grade classification (as described in the Underwriting Guidelines); (16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17)
the Mortgage Rate at origination; (18) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(19) the Value of the Mortgaged Property; (20) a code indicating the type of
Prepayment Charges applicable to such Mortgage Loan, if any; and (21) with
respect to each Adjustable Rate Mortgage Loan, the Periodic Mortgage Rate Cap.
With respect to the Mortgage Loans in the aggregate, the Data Tape Information
shall set forth the following information, as of the Cut-off Date: (1) the
number of Mortgage Loans; (2) the current aggregate outstanding principal
balance of the Mortgage Loans;
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(3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
DEFINITIVE CERTIFICATES: Any Certificate evidenced by a
Physical Certificate and any Certificate issued in lieu of a Book-Entry
Certificate pursuant to Section 5.02(e).
DELAY CERTIFICATES: As specified in the Preliminary Statement.
DELETED MORTGAGE LOAN: As defined in Section 2.03.
DELINQUENCY TRIGGER EVENT: With respect to a Distribution Date
after the Stepdown Date, the event that is in effect if the quotient (expressed
as a percentage) of (x) the three month rolling daily average of the Stated
Principal Balance of 60+ Day Delinquent Loans as of the last day of the related
Due Period, over (y) the Pool Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period exceeds 67% of the prior period's
Senior Enhancement Percentage.
DELINQUENT: A mortgage loan is "Delinquent" if any monthly
payment due on a due date is not made by the close of business on the next
scheduled due date for that mortgage loan (including all Mortgage Loans in
foreclosure, Mortgage Loans in respect of REO Properties and Mortgage Loans for
which the related Mortgagor has declared bankruptcy). A mortgage loan is "30
days Delinquent" if the monthly payment has not been received by the close of
business on the corresponding day of the month immediately succeeding the month
in which that monthly payment was due or, if there was no corresponding date
(E.G., as when a 30-day month follows a 31-day month in which the payment was
due on the 31st day of that month), then on the last day of that immediately
preceding month; and similarly for "60 days Delinquent" and "90 days
Delinquent," etc.
DELIVERY DATE: With respect to the Initial Mortgage Loans, the
Closing Date; with respect to any Subsequent Mortgage Loans, the related
Subsequent Transfer Date therefor.
DENOMINATION: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the Percentage Interest appearing on the face thereof.
DEPOSITOR: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., a Delaware
corporation, or its successor in interest.
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DEPOSITORY: The initial Depository shall be The Depository
Trust Company, the nominee of which is CEDE & Co., as the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
DETERMINATION DATE: With respect to each Remittance Date, the
Business Day immediately preceding such Remittance Date.
DISTRIBUTION ACCOUNT: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.07(d) in the name of the
Trustee for the benefit of the Certificateholders and designated "Deutsche Bank
National Trust Company, in trust for registered holders of CDC Mortgage Capital
Trust 2002-HE1, Mortgage Pass-Through Certificates, Series 2002-HE1".
DISTRIBUTION DATE: The 25th day of each calendar month after
the initial issuance of the Certificates, or if such day is not a Business Day,
the next succeeding Business Day, commencing in May 2002.
DOCUMENT EXCEPTION REPORT: The report attached to Exhibit F
hereto.
DUE DATE: The day of the month on which the Scheduled Payment
is due on a Mortgage Loan, exclusive of any days of grace.
DUE PERIOD: With respect to each Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
ELIGIBLE ACCOUNT: Either (i) a demand account maintained with
an Eligible Institution or (ii) a trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in its
fiduciary capacity or (iii) any other account acceptable to each Rating Agency.
Eligible Accounts may bear interest, and may include, if otherwise qualified
under this definition, accounts maintained with the Trustee.
ELIGIBLE INSTITUTION: A federal or state chartered depository
institution or trust company, which (x) with respect to any Eligible Account,
the amounts on deposit in which will be held for 30 days or less, the commercial
paper, short term debt obligations, or other short-term deposits of which are
rated at least A-1 by Fitch, A-1 by Standard & Poor's and "P-1" by Moody's (or a
comparable rating if another Rating Agency is specified by the Depositor by
written notice to the Servicer and the Trustee) or (y) with respect to any
Eligible Account, the amounts on deposit in which will be held for more than 30
days, the long-term unsecured debt obligations of which are rated at least AA-
by Fitch, AA- by Standard & Poor's and Aa3 by Moody's (or a comparable rating if
another Rating Agency is specified by the Depositor by written notice to the
Servicer and the Trustee).
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ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-QUALIFYING UNDERWRITING: A best efforts or firm
commitment underwriting or private placement that meets the requirements of
Prohibited Transaction Exemption 97-34, 62 Fed. Reg. 39021 (1997), as amended
(or any successor thereto), or any substantially similar administrative
exemption granted by the U.S. Department of Labor.
ERISA-RESTRICTED CERTIFICATE: As specified in the Preliminary
Statement.
ESCROW ACCOUNT: The Eligible Account or Accounts established
and maintained pursuant to Section 3.09(b).
ESCROW PAYMENTS: As defined in Section 3.09(b) of this
Agreement.
EVENT OF DEFAULT: As defined in Section 7.01.
EXCESS RESERVE FUND ACCOUNT: The separate Eligible Account
created and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c)
in the name of the Trustee for the benefit of the Offered Certificateholders and
designated "Deutsche Bank National Trust Company, in trust for registered
holders of CDC Mortgage Capital Trust 2002-HE1, Mortgage Pass-Through
Certificates, Series 2002-HE1".
EXCESS SUBORDINATED AMOUNT: With respect to any Distribution
Date, the excess, if any, of (a) the Subordinated Amount on such Distribution
Date over (b) the Specified Subordinated Amount for such Distribution Date.
EXPENSE FEES: As to each Mortgage Loan, the sum of the
Servicing Fee and the Trustee Fee.
EXPENSE FEE RATE: As to each Mortgage Loan, a per annum rate
equal to the sum of the Servicing Fee Rate and the Trustee Fee Rate.
EXTRA PRINCIPAL DISTRIBUTION AMOUNT: As of any Distribution
Date, the lesser of (x) the related Total Monthly Excess Spread for such
Distribution Date and (y) the Subordination Deficiency for such Distribution
Date.
▇▇▇▇▇▇ MAE: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ ▇▇▇ GUIDES: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the
▇▇▇▇▇▇ ▇▇▇ Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FDIC GUARANTY: The Amended Corporate Guaranty Agreement, dated
April 26, 2002, by the FDIC in favor of the Unaffiliated Seller with respect to
the FDIC's limited guarantee of the Superior Mortgage Loans, which guarantee was
assigned to the Trustee pursuant to the FDIC consent, dated April 26, 2002.
15
FDIC GUARANTY CLAIM LOAN: As defined in Section 2.03(d).
FDIC GUARANTY NOTICE DATE: The earlier to occur of (i)
February 21, 2005 and (ii) the date on which the FDIC has paid, in the
aggregate, an amount equal to 10% of the Cut-off Date Principal Balances of the
Superior Mortgage Loans pursuant to the terms of the FDIC Guaranty.
FDIC GUARANTY TERMINATION DATE: With respect to any FDIC
Guaranty Claim Loan, three years from the applicable FDIC Notice Date.
FDIC NOTICE DATE: As defined in Section 2.03(d).
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FINAL CERTIFICATION: A certification submitted by the Trustee
in substantially the form of Exhibit F hereto.
FINAL RECOVERY DETERMINATION: With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by an Originator as contemplated by the Assignment and Recognition
Agreements, a determination made by the Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery Determination made thereby.
FINAL SCHEDULED DISTRIBUTION DATE: The Final Scheduled
Distribution Date for each Class of Certificates is the Distribution Date in
each of the following months:
FINAL SCHEDULED
DISTRIBUTION DATE
-------------------
Class A Certificates................................. January 25, 2033
Class M Certificates................................. January 25, 2033
Class B Certificates................................. January 25, 2033
Class X Certificates................................. January 25, 2033
Class P Certificates................................. January 25, 2033
Class R Certificates................................. January 25, 2033
FITCH: Fitch, Inc. If Fitch is designated as a Rating Agency
in the Preliminary Statement, for purposes of Section 10.05(b) the address for
notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Residential Mortgage Surveillance Group - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. 2002-HE1, or such other address as Fitch may hereafter furnish to
the Depositor and the Servicer
FIXED RATE MORTGAGE LOAN: A Mortgage Loan bearing interest at
a fixed rate.
FLOATING RATE CERTIFICATES: As specified in the Preliminary
Statement.
16
FLOOR AMOUNT: An amount equal to the product of (x) 0.50% and
(y) the Maximum Pool Principal Balance.
GROSS MARGIN: With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note to be
added to the applicable Index to determine the Mortgage Rate.
IFC: IMPAC Funding Corporation, a California corporation.
IFC ASSIGNMENT AGREEMENT: The Assignment and Recognition
Agreement, dated as of April 30, 2002, by and among the Unaffiliated Seller, the
Depositor and IFC, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and IFC in connection with any
Subsequent Transfer of IFC Mortgage Loans.
IFC MORTGAGE LOAN: A Mortgage Loan which was acquired from IFC
by the Unaffiliated Seller pursuant to the IFC Purchase Agreement, and which has
been acquired by the Trust Fund.
IFC PURCHASE AGREEMENT: The Mortgage Loan Purchase and
Warranties Agreement, dated as of July 10, 2001 by and between the Unaffiliated
Seller and IFC.
I&I PAYMENTS: Payments due and owing under the Insurance and
Indemnity Agreement.
INITIAL CUT-OFF DATE: The close of business on April 1, 2002.
INITIAL MORTGAGE LOANS: The Mortgage Loans delivered by the
Depositor on the Startup Date.
INSURANCE AND INDEMNITY AGREEMENT: The Insurance and Indemnity
Agreement dated as of April 1, 2002 among the Class A Certificate Insurer, the
Servicer and the Unaffiliated Seller, as such agreement may be amended or
supplemented in accordance with the provisions thereof.
INSURED PAYMENT: With respect to any Distribution Date, the
Class A Deficiency for that Distribution Date.
INDEX: As to each Adjustable Rate Mortgage Loan, the index
from time to time in effect for the adjustment of the Mortgage Rate set forth as
such on the related Mortgage Note.
INSURANCE POLICY: With respect to any Mortgage Loan included
in the Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect, including any replacement policy or policies for any
Insurance Policies.
INSURANCE PROCEEDS: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
17
INTEREST ACCRUAL PERIOD: With respect to each Class of
Non-Delay Certificates and the Corresponding Class of Lower Tier Regular
Interests and any Distribution Date, the period commencing on the 25th day of
the immediately preceding month and ending on the 24th day of the current month
(or in the case of the first Distribution Date, the period from and including
the Closing Date to but excluding such first Distribution Date). For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
INTEREST AMOUNT AVAILABLE: With respect to any Distribution
Date, the sum of (i) the Interest Remittance Amount received by the Trustee from
the Servicer on the related Remittance Date, (ii) the Pre-Funding Earnings, if
any, deposited to the Distribution Account on such Distribution Date and (iii)
the Capitalized Interest Requirement, if any, deposited to the Distribution
Account on such Distribution Date.
INTEREST RATE ADJUSTMENT DATE: With respect to each Adjustable
Rate Mortgage Loan, the date, specified in the related Mortgage Note and the
Mortgage Loan Schedule, on which the Mortgage Rate is adjusted.
INTEREST REMITTANCE AMOUNT: With respect to any Remittance
Date, the sum, without duplication, of:
(i) all scheduled installments of interest due on the
Mortgage Loans during the related Due Period (other than Simple
Interest Excess, if any) and received or advanced by the Servicer on or
prior to the related Remittance Date;
(ii) Compensating Interest paid by the Servicer on such
Remittance Date;
(iii) the interest component of all related Substitution
Adjustment Amounts and Repurchase Prices;
(iv) the interest component of all Condemnation Proceeds,
Insurance Proceeds and Liquidation Proceeds received by the Servicer
during the related Prepayment Period (in each case, net (but not to be
reduced below zero) of unreimbursed expenses incurred in connection
with a liquidation or foreclosure and unreimbursed Advances, if any);
(v) any amounts withdrawn from the Simple Interest Excess
Sub-Account to pay interest on the Certificates with respect to such
Remittance Date; and
(vi) the interest component of the proceeds of any
termination of the Trust Fund.
REDUCED by the Servicing Fee for the related Due Period, together with amounts
in reimbursement for Advances previously made with respect to the Mortgage Loans
and other amounts as to which the Servicer is entitled to be reimbursed pursuant
to the Agreement.
INVESTMENT ACCOUNT: As defined in Section 3.12(a).
18
LATE COLLECTIONS: With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent to the Determination Date
immediately following such Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
LATE PAYMENT RATE: Has the meaning ascribed thereto in the
Insurance and Indemnity Agreement.
LIBOR: With respect to any Interest Accrual Period for the
LIBOR Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Servicer, at
approximately 11:00 a.m. (New York City time) on such date for one-month U.S.
dollar loan to leading European banks.
LIBOR CERTIFICATES: As specified in the Preliminary Statement.
LIBOR DETERMINATION DATE: With respect to any Interest Accrual
Period (other than the initial Interest Accrual Period) for the LIBOR
Certificates, the second London Business Day preceding the commencement of such
Interest Accrual Period.
LIQUIDATED MORTGAGE LOAN: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property) which was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the Servicer has certified (in accordance with this Agreement)
that it has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan including the final disposition of an REO
Property.
LIQUIDATION EVENT: With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is removed from coverage under this Agreement by reason of its being
purchased, sold or replaced pursuant to or as contemplated by this Agreement.
With respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from coverage under this Agreement by reason of its being
purchased pursuant to this Agreement.
19
LIQUIDATION PROCEEDS: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through trustee's sale,
foreclosure sale or otherwise.
LOAN-TO-VALUE RATIO or LTV: With respect to any Mortgage Loan,
the ratio (expressed as a percentage) of the original outstanding principal
amount of the Mortgage Loan as of the Cut-off Date (unless otherwise indicated),
to the lesser of (a) the Appraised Value of the Mortgaged Property at
origination, and (b) if the Mortgage Loan was made to finance the acquisition of
the related Mortgaged Property, the purchase price of the Mortgaged Property.
LONDON BUSINESS DAY: Any day on which dealings in deposits of
United States dollars are transacted in the London interbank market.
LOSS TRIGGER EVENT: With respect to any Distribution Date, the
event that is in effect if the aggregate amount of Applied Realized Loss Amounts
incurred since the related Cut-off Date through the last day of the related
Prepayment Period divided by the Stated Principal Balance of the Mortgage Loans
as of the related Cut-off Date exceeds the applicable percentage as follows with
respect to such Distribution Date: (a) 3.50% commencing with the first
Distribution Date, plus an additional 1/12th of 1.75% for each month after May
2005 for Distribution Dates occurring from May 2005 to April 2006; (b) 5.25% for
the first month, plus an additional 1/12th of 1.00% for each month thereafter
for the Distribution Dates occurring from May 2006 to April 2007; (c) 6.25% for
the first month, plus an additional 1/12th of 0.75% for each month thereafter
for Distribution Dates occurring from May 2007 to April 2008; (d) 7.00% for the
first month, plus an additional 1/12th of 0.25% for each month thereafter for
Distribution Dates occurring from May 2008 to April 2009; and (e) 7.25% for
Distribution Dates occurring in May 2009 and thereafter.
LOWER TIER REGULAR INTEREST: Each of the Class LT-A, Class
LT-M, Class LT-B and Class LT-Accrual Interests as described in the Preliminary
Statement.
LOWER TIER REMIC: As described in the Preliminary Statement
MAXIMUM MORTGAGE RATE: With respect to each Adjustable Rate
Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in
the related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Mortgage Loan.
MAXIMUM POOL PRINCIPAL BALANCE: The aggregate Stated Principal
Balances of all Mortgage Loans (both Initial Mortgage Loans and Subsequent
Mortgage Loans) as of their respective Cut-off Dates.
MINIMUM MORTGAGE RATE: With respect to each Adjustable Rate
Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in
the related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Mortgage Loan.
MONTHLY STATEMENT: The statement delivered to the
Certificateholders pursuant to Section 4.03.
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MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc. If ▇▇▇▇▇'▇ is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to Moody's shall be ▇▇▇▇▇'▇ Investors
Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Residential Mortgage Pass-Through Group, or such other address as Moody's may
hereafter furnish to the Depositor and the Servicer.
MORTGAGE: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
MORTGAGE FILE: The items pertaining to a particular Mortgage
Loan contained in either the Servicing File or Custodial File.
MORTGAGE LOAN PURCHASE AGREEMENT: The BNC Purchase Agreement,
the CIT Purchase Agreement, the IFC Purchase Agreement, the NC Purchase
Agreement or the Superior Purchase Agreement, as applicable.
MORTGAGE LOANS: An individual Mortgage Loan which is the
subject of this Agreement, each Mortgage Loan originally sold and subject to
this Agreement being identified on the Mortgage Loan Schedule, which Mortgage
Loan includes, without limitation, the Mortgage File, the Scheduled Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan, excluding
replaced or repurchased Mortgage Loans.
MORTGAGE LOAN SCHEDULE: A schedule of Mortgage Loans annexed
hereto as Schedule I, such schedule setting forth the following information with
respect to each Mortgage Loan: (1) the Unaffiliated Seller's Mortgage Loan
number; (2) the city, state and zip code of the Mortgaged Property; (3) a code
indicating whether the Mortgaged Property is a single family residence,
two-family residence, three-family residence, four-family residence, PUD or
condominium; (4) the current Mortgage Interest Rate; (5) the current net
Mortgage Rate; (6) the current Monthly Payment; (7) the Gross Margin; (8) the
original term to maturity; (9) the scheduled maturity date; (10) the principal
balance of the Mortgage Loan as of the Cut-off Date after deduction of payments
of principal due on or before the Cut-off Date whether or not collected; (11)
the Loan-to-Value Ratio; (12) the next Interest Rate Adjustment Date; (13) the
lifetime Mortgage Interest Rate Cap; (14) whether the Mortgage Loan is
convertible or not; (15) a code indicating the mortgage guaranty insurance
company; (16) the Servicing Fee; (17) the identity of the related Originator of
such Mortgage Loan; (18) the Mortgagor's name; (19) whether such Mortgage Loan
is a Simple Interest Mortgage Loan; and (20) the "paid-through" date (based on
payments received from the related Mortgagor) as of the Cut-off Date.
MORTGAGE NOTE: The note or other evidence of the indebtedness
of a Mortgagor under a Mortgage Loan.
MORTGAGE RATE: The annual rate of interest borne on a Mortgage
Note, which shall be adjusted from time to time with respect to Adjustable Rate
Mortgage Loans.
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MORTGAGE RATE CAPS: With respect to an Adjustable Rate
Mortgage Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and
the Minimum Mortgage Rate for such Mortgage Loan.
MORTGAGED PROPERTY: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
MORTGAGOR: The obligor(s) on a Mortgage Note.
NC: NC Capital Corporation, a California corporation.
NC ASSIGNMENT AGREEMENT: The Assignment and Recognition
Agreement, dated as of April 30, 2002, by and among the Unaffiliated Seller, the
Depositor and NC, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and NC in connection with any
Subsequent Transfer of NC Mortgage Loans.
NC MORTGAGE LOAN: A Mortgage Loan which was acquired from NC
by the Unaffiliated Seller pursuant to the NC Purchase Agreement, and which has
been acquired by the Trust Fund.
NC PURCHASE AGREEMENT: The Mortgage Loan Purchase and
Warranties Agreement, dated as of February 26, 2002, by and between the
Unaffiliated Seller and NC.
NET MONTHLY EXCESS CASH FLOW: For any Distribution Date the
amount remaining for distribution pursuant to subsection 4.02(iii) (before
giving effect to distributions pursuant to such subsection).
NET PREPAYMENT INTEREST SHORTFALL: For any Distribution Date,
the amount by which the sum of the Prepayment Interest Shortfalls exceeds the
sum of the Compensating Interest payments made on such Distribution Date.
NET SIMPLE INTEREST EXCESS: As of any Determination Date, the
excess, if any, of the aggregate amount of Simple Interest Excess (net of
reimbursement to the Servicer for Advances on Simple Interest Mortgage Loans)
over the amount of Simple Interest Shortfall.
NET SIMPLE INTEREST SHORTFALL: As of any Determination Date,
the excess, if any, of the aggregate amount of Simple Interest Shortfall over
the amount of Simple Interest Excess.
NIMS TRUST: CDC Mortgage Capital Inc. NIM Trust 2002-HE1N, a
Delaware business trust.
NON-DELAY CERTIFICATES: As specified in the Preliminary
Statement.
NONRECOVERABLE ADVANCE: Any Servicing Advances previously made
or proposed to be made in respect of a Mortgage Loan or REO Property, which, in
the good faith business judgment of the Servicer, will not or, in the case of a
proposed Servicing Advance, would not, be ultimately recoverable from related
Insurance Proceeds, Liquidation Proceeds or otherwise. The
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determination by the Servicer that it has made a Nonrecoverable Advance or that
any proposed Servicing Advances, if made, would constitute a Nonrecoverable
Advance, shall be evidenced by an Officers' Certificate delivered to the
Trustee.
NONRECOVERABLE P&I ADVANCE: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related late
payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.
NOTICE OF FINAL DISTRIBUTION: The notice to be provided
pursuant to Section 9.02 to the effect that final distribution on any of the
Certificates shall be made only upon presentation and surrender thereof.
OFFERED CERTIFICATES: As specified in the Preliminary
Statement.
OFFICER'S CERTIFICATE: A certificate signed by an officer of
the Servicer with responsibility for the servicing of the Mortgage Loans and
listed on a list delivered to the Trustee pursuant to this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may be
in-house counsel for the Servicer or the Subservicer, reasonably acceptable to
the Trustee and to the Class A Certificate Insurer, provided that any Opinion of
Counsel relating to (a) qualification of the Mortgage Loans in a REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of the
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Servicer of the Mortgage Loans or in an
affiliate of either and (iii) is not connected with the Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
OPTIONAL TERMINATION DATE: means:
(i) For so long as the Class X Certificates are 100%
owned, either directly or indirectly, by the Unaffiliated Seller or any
Affiliate thereof, then the Servicer may cause the Optional Termination
Date to occur on any Distribution Date when the aggregate Stated
Principal Balance of the Mortgage Loans is 10.00% or less of the
Maximum Pool Principal Balance; and
(ii) If the Class X Certificates are not 100% owned,
either directly or indirectly, by the Unaffiliated Seller or any
Affiliate thereof, then the Holders of a majority in Class Certificate
Balance of the Class X Certificates may cause the Optional Termination
Date to occur on any Distribution Date when the aggregate Stated
Principal Balance of the Mortgage Loans is 10.00% or less of the
Maximum Pool Principal Balance, and, if such Class X Certificateholders
do not do so, then the Servicer shall also have such right.
ORIGINAL PRE-FUNDED AMOUNT: $82,870,341.68.
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ORIGINATOR: The party that originated or acquired a Mortgage
Loan and, more specifically, (i) with respect to any BNC Mortgage Loan, BNC,
(ii) with respect to any IFC Mortgage Loan, IFC, (iii) with respect to any
Superior Mortgage Loan, Superior, (iv) with respect to any NC Mortgage Loan, NC
and (v) with respect to any CIT Mortgage Loan, CIT.
OTS: Office of Thrift Supervision, and any successor thereto.
OUTSTANDING: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of
which other Certificates have been executed and delivered by the
Trustee pursuant to this Agreement.
OUTSTANDING MORTGAGE LOAN: As of any Due Date, a Mortgage Loan
with a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
OWNERSHIP INTEREST: As to any Residual Certificate, any
ownership interest in such Certificate including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial.
P&I ADVANCE: As to any Mortgage Loan or REO Property, any
advance made by the Servicer in respect of any Remittance Date representing (i)
with respect to any Mortgage Loan other than a Simple Interest Mortgage Loan,
the aggregate of all payments of principal and interest on such Mortgage Loan,
and (ii) with respect to any Simple Interest Mortgage Loan, the aggregate of all
payments of interest on such Simple Interest Mortgage Loan, in each case, net of
the related Servicing Fee, that were due, or in the case of Simple Interest
Mortgage Loans, accrued, during the related Due Period on such Mortgage Loan and
that were delinquent or unpaid on the related Determination Date, plus certain
amounts representing assumed payments not covered by any current net income on
the Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure
as determined pursuant to Section 4.01.
PASS-THROUGH MARGIN: With respect to each Class of Regular
Certificates, prior to the first Distribution Date after the Optional
Termination Date the following percentages: Class A Certificates, 0.31%; Class M
Certificates, 1.25% and Class B Certificates, 2.75%. On the first Distribution
Date after the Optional Termination Date, the Pass-Through Margins shall
increase to: Class A Certificates, 0.62%, Class M Certificates, 1.875% and Class
B Certificates, 4.125%.
PASS-THROUGH RATE: For each Class of Certificates and each
Lower Tier Regular Interest, the per annum rate set forth or calculated in the
manner described in the Preliminary Statement.
PERCENTAGE INTEREST: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related
Class, such percentage interest being
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set forth on the face thereof or equal to the percentage obtained by dividing
the Denomination of such Certificate by the aggregate of the Denominations of
all Certificates of the same Class.
PERIODIC MORTGAGE RATE CAP: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Interest Rate adjustment as
set forth in the related Mortgage Note.
PERMITTED INVESTMENTS: Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Servicer, the Trustee or any of their
respective Affiliates:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by, the
United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United
States;
(ii) demand and time deposits in, certificates of deposit
of, or bankers' acceptances (which shall each have an original maturity
of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or a
remaining maturity of more than 30 days) denominated in United States
dollars and issued by, any Eligible Institution;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Eligible Institution
(acting as principal);
(iv) securities bearing interest or sold at a discount
that are issued by any corporation incorporated under the laws of the
United States of America or any state thereof and that are rated by
each Rating Agency that rates such securities in its highest long-term
unsecured rating categories at the time of such investment or
contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by each Rating Agency that rates
such securities in its highest short-term unsecured debt rating
available at the time of such investment;
(vi) units of money market funds, including money market
funds advised by the Depositor or an Affiliate thereof, that have been
rated "Aaa" by Moody's, "AAA" by Fitch and "AAA" by Standard & Poor's;
and
(vii) if previously confirmed in writing to the Trustee and
to the Class A Certificate Insurer, any other demand, money market or
time deposit, or any other obligation, security or investment, as may
be acceptable to the Rating Agencies as a permitted investment of funds
backing "Aaa" or "AAA" rated securities;
PROVIDED, HOWEVER, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the
25
interest and principal payments with respect to such instrument provide a yield
to maturity at par greater than 120% of the yield to maturity at par of the
underlying obligations.
PERMITTED TRANSFEREE: Any person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in section 521 of the Code) which is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in section 860E(c)(1) of
the Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) a
Person that is not a U.S. Person, (vi) an "electing large partnership" within
the meaning of section 775 of the Code and (vii) any other Person so designated
by the Depositor based upon an Opinion of Counsel that the Transfer of an
Ownership Interest in a Residual Certificate to such Person may cause the REMIC
hereunder to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States," "State" and "International Organization"
shall have the meanings set forth in section 7701 of the Code or successor
provisions. A corporation will not be treated as an instrumentality of the
United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such government unit.
PERSON: Any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
PHYSICAL CERTIFICATES: As specified in the Preliminary
Statement.
POOL STATED PRINCIPAL BALANCE: As to any Distribution Date,
the aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date which were Outstanding Mortgage Loans as of the last day of
the related Due Period.
PREFERENCE AMOUNT: Any amounts distributed in respect of the
Class A Certificates which are recovered from any Holder of a Class A
Certificate as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code or other similar law in accordance with a final,
nonappealable order of a court having competent jurisdiction and which have not
theretofore been repaid to such Holder.
PREFERENCE CLAIM: As defined in Section 4.05(f) hereof.
PRE-FUNDING ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(f) in the name of the Trustee
for the benefit of the Certificateholders, and designated "Deutsche Bank
National Trust Company, in trust for registered holders of CDC Mortgage Capital
Trust 2002-HE1, Mortgage Pass-Through Certificates, Series 2002-HE1".
PRE-FUNDING AMOUNT: With respect to any date, the amount on
deposit in the Pre-Funding Account.
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PRE-FUNDING EARNINGS: The actual investment earnings realized
on amounts deposited in the Pre-Funding Account.
PRE-FUNDING PERIOD: The period commencing on the Startup Date
and ending on the earliest to occur of (i) the date on which the amount on
deposit in the Pre-Funding Account (exclusive of any investment earnings) is
less than $100,000, (ii) the date on which any Event of Default occurs and (iii)
July 24, 2002.
PREMIUM AMOUNT: The product of the Premium Rate and the
Certificate Balance of the Class A Certificates immediately prior to such
Distribution Date.
PREMIUM RATE: The rate at which the "Premium" is determined as
described in the letter dated April 30, 2002 between the Unaffiliated Seller and
the Class A Certificate Insurer.
PREPAYMENT CHARGE: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment in full pursuant to the terms
of the related Mortgage Note.
PREPAYMENT INTEREST SHORTFALL: With respect to any Remittance
Date, the sum of, for each Mortgage Loan that was during the related Prepayment
Period the subject of a Principal Prepayment in Full that was applied by the
Servicer to reduce the outstanding principal balance of such Mortgage Loan on a
date preceding the Due Date in the succeeding Prepayment Period, an amount equal
to the product of (a) the Mortgage Rate net of the Servicing Fee Rate for such
Mortgage Loan, (b) the amount of the Principal Prepayment for such Mortgage
Loan, (c) 1/360 and (d) the number of days commencing on the date on which such
Principal Prepayment was applied and ending on the last day of the related
Prepayment Period.
PREPAYMENT PERIOD: With respect to any Distribution Date, the
calendar month preceding the calendar month in which such Distribution Date
occurs.
PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
sum of (i) the Basic Principal Distribution Amount for such Distribution Date
and (ii) the Extra Principal Distribution Amount for such Distribution Date.
PRINCIPAL PREPAYMENT: Any full or partial payment or other
recovery of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan) which is received in advance of its scheduled Due Date, excluding
any prepayment penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
PRINCIPAL PREPAYMENT IN FULL: Any Principal Prepayment made by
a Mortgagor of the entire principal balance of a Mortgage Loan.
PRINCIPAL REMITTANCE AMOUNT: With respect to any Remittance
Date, the sum, without duplication, of:
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(i) uring the related Due Period and received or advanced
by the Servicer on or prior to the related Remittance Date;
(ii) the principal component of all Condemnation Proceeds,
Insurance Proceeds and Liquidation Proceeds during the related
Prepayment Period (in each case, net of remaining (I.E., not deducted
from the Interest Remittance Amount) unreimbursed expenses incurred in
connection with a liquidation or foreclosure and unreimbursed Advances,
if any);
(iii) all partial or full prepayments on the Mortgage Loans
received during the related Prepayment Period;
(iv) the principal component of all related Substitution
Adjustment Amounts or Repurchase Prices;
(v) proceeds received by the Servicer or the Trustee
under the FDIC Guaranty during the related Prepayment Period; and
(vi) the principal component of the proceeds of any
termination of the Trust Fund.
reduced by remaining amounts (I.E., not deducted from the Interest Remittance
Amount) in reimbursement for Advances previously made with respect to the
Mortgage Loans and other amounts as to which the Servicer is entitled to be
reimbursed pursuant to this Agreement.
PRIVATE CERTIFICATES: As specified in the Preliminary
Statement.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement, dated April
22, 2002, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: Planned Unit Development.
QUALIFIED INSURER: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
FNMA- or FHLMC-approved mortgage insurer or having a claims paying ability
rating of at least "AA" or equivalent rating by a nationally recognized
statistical rating organization. Any replacement insurer with respect to a
Mortgage Loan must have at least as high a claims paying ability rating as the
insurer it replaces had on the Closing Date.
RATING AGENCY: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is
28
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating or rating category of a Rating
Agency shall mean such rating category without giving effect to any modifiers.
For purposes of Section 10.05(b), the addresses for notices to each Rating
Agency shall be the address specified therefor in the definition corresponding
to the name of such Rating Agency, or such other address as either such Rating
Agency may hereafter furnish to the Depositor and the Servicer.
RECORD DATE: With respect to any Distribution Date, the close
of business on the Business Day immediately preceding such Distribution Date;
PROVIDED, HOWEVER, that for any Certificate issued in Definitive Form, the
Record Date shall be the close of business on the last Business Day of the month
immediately preceding such applicable Distribution Date.
REFERENCE BANK: As defined in Section 4.04.
REGULAR CERTIFICATES: As specified in the Preliminary
Statement.
REIMBURSEMENT AMOUNT: As of any Distribution Date, the sum of
(a)(i) all Insured Payments previously received by the Trustee and all
Preference Amounts previously paid by the Class A Certificate Insurer and in
each case not previously repaid to the Class A Certificate Insurer pursuant to
Sections 6.05(a)(ii) hereof plus (ii) interest accrued on each such Insured
Payment and Preference Amounts not previously repaid calculated at the Late
Payment Rate from the date the Trustee received the related Insured Payment or
Preference Amounts were paid by the Class A Certificate Insurer and (b)(i) any
amounts then due and owing to the Class A Certificate Insurer under the
Insurance and Indemnity Agreement (excluding the Premium Amount due on such
Distribution Date), as certified to the Trustee by the Class A Certificate
Insurer plus (ii) interest on such amounts at the rate specified in the
Insurance and Indemnity Agreement. The Class A Certificate Insurer shall notify
the Trustee and the Unaffiliated Seller of the amount of any Reimbursement
Amount.
REMIC TRUST: The segregated pool of assets consisting of the
Trust Fund, exclusive of Prepayment Charges and the Excess Reserve Fund Account.
RELIEF ACT INTEREST SHORTFALL: With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended Due Period as a
result of the application of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.
REMIC PROVISIONS: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
REMITTANCE DATE: The 18th day (or if such 18th day is not a
Business Day, the first Business Day immediately preceding) of any month.
29
REO DISPOSITION: The final sale by the Servicer of any REO
Property.
REO IMPUTED INTEREST: As to any REO Property, for any period,
an amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO PROPERTY: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
REPRESENTATIVE: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, as
representative on behalf of itself, ▇▇▇▇▇▇ Brothers and Bear ▇▇▇▇▇▇▇ & Co.
REPURCHASE PRICE: With respect to any Mortgage Loan, an amount
equal to the sum of (i) the unpaid principal balance of such Mortgage Loan as of
the date of repurchase and (ii) (x) if such Mortgage Loan is being repurchased
by the Unaffiliated Seller, the sum of (A) interest on such unpaid principal
balance of such Mortgage Loan at the Mortgage Rate from the last date through
which interest has been paid and distributed to the Trustee to the last day of
the month in which such repurchase occurs, (B) all unreimbursed Servicing
Advances and (C) all expenses reasonably incurred by the Servicer, the Trustee,
the Class A Certificate Insurer or the Unaffiliated Seller, as the case may be,
in respect of a breach or defect, including, without limitation, expenses
arising out of any such party's enforcement of the Originator's repurchase
obligation, to the extent not included in (B), or (y) if such Mortgage Loan is
being repurchased by the related Originator, all other amounts payable by such
Originator in accordance with the terms of the related Mortgage Loan Purchase
Agreement.
REQUEST FOR RELEASE: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit J.
RESIDUAL CERTIFICATES: As specified in the Preliminary
Statement.
RESPONSIBLE OFFICER: When used with respect to the Trustee,
any Vice President, any Assistant Vice President, any Assistant Secretary, any
Assistant Treasurer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers who
at such time shall be officers to whom, with respect to a particular matter,
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject and who shall have direct responsibility for the
administration of this Agreement.
RULE 144A LETTER: As defined in Section 5.02(b).
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan which, unless otherwise specified herein, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount of
the monthly payment due on such Mortgage Loan.
30
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding principal balance of such
Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion of each Monthly Payment due on or
before such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii) all Principal Prepayments received before such Due Date but after
the Cut-off Date, (iii) the principal portion of all Liquidation Proceeds and
Insurance Proceeds received before such Due Date but after the Cut-off Date, net
of any portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any reduction in the principal balance of such Mortgage Loan incurred with
respect thereto as a result of a Deficient Valuation occurring before such Due
Date, but only to the extent such reduction in principal balance represents a
reduction in the portion of principal of such Mortgage Loan not yet due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) as of the date of such Deficient Valuation; and (c) as of any Due Date
subsequent to the occurrence of a Liquidation Event with respect to such
Mortgage Loan, zero.
SECURITIES ACT: The Securities Act of 1933, as amended.
SENIOR ENHANCEMENT PERCENTAGE: With respect to any
Distribution Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class Certificate Balance of the Subordinated Certificates and (ii)
the Subordinated Amount (in each case after taking into account the
distributions of the Principal Distribution Amount for such Distribution Date)
by (y) the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period.
SENIOR SPECIFIED ENHANCEMENT PERCENTAGE: As of any date of
determination, 23.00%.
SERVICER: Ocwen Federal Bank FSB, a federally chartered
savings bank, and its successors and assigns, in its capacity as servicer
hereunder.
SERVICER TERMINATION TEST: With respect to any Distribution
Date, the Servicer Termination Test will be failed with respect to the Servicer
if either:
(a) the Cumulative Loss Percentage exceeds (i) in months 1
through 24, 2.50%, (ii) in months 25 through 36, 4.00%, (iii) in months 37
through 48, 5.25% and (iv) in month 49 and thereafter, 6.70%; or
(b) the quotient (expressed as a percentage) of (x) the Stated
Principal Balance of Mortgage Loans 60 days Delinquent or more as of the end of
the related Due Period (including Mortgage Loans in bankruptcy, foreclosure or
represented by an REO Property) over (y) the aggregate Stated Principal Balance
of the Mortgage Loans as of the end of the related Due Period, exceeds 20%.
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SERVICING ADVANCES: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the performance of
its servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures and litigation, in
respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property and
(iv) the performance of its obligations under Section 3.01, Section 3.09,
Section 3.13 and Section 3.15 hereof. The Servicer shall not be required to make
any Nonrecoverable Advances.
SERVICING FEE: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the same principal amount
on which interest on such Mortgage Loan accrues for such calendar month. Such
fee shall be payable monthly, and shall be pro rated for any portion of a month
during which the Mortgage Loan is serviced by the Servicer under this Agreement.
The Servicing Fee is payable solely from, the interest portion (including
recoveries with respect to interest from Liquidation Proceeds and proceeds
received with respect to REO Properties, to the extent permitted by Section
3.11) of such Monthly Payment collected by the Servicer, or as otherwise
provided under Section 3.11.
SERVICING FEE RATE: With respect to each Mortgage Loan, 0.50%
per annum.
SERVICING FILE: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Trustee in the Custodial File
and copies of each of the other Mortgage Loan documents required to be delivered
by the related Originator pursuant to the terms of the related Mortgage Loan
Purchase Agreement.
SERVICING OFFICER: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
SIMILAR LAW: As defined in Section 5.02(b).
SIMPLE INTEREST EXCESS: As of any Remittance Date for each
Simple Interest Qualifying Loan, the excess, if any, of (i) the portion of the
monthly payment received from the Mortgagor for such Mortgage Loan allocable to
interest with respect to the related Due Period, over (ii) 30 days' interest on
the Stated Principal Balance of such Mortgage Loan at the Mortgage Rate for such
Mortgage Loan.
SIMPLE INTEREST EXCESS SUB-ACCOUNT: The sub-account of the
Collection Account established by the Servicer pursuant to Section 3.10(b). The
Simple Interest Excess Sub-Account shall be an Eligible Account.
32
SIMPLE INTEREST MORTGAGE LOAN: Any Mortgage Loan for which the
interest due thereon is calculated based on the actual number of days elapsed
between the date on which interest was last paid through the date on which the
most current payment is received.
SIMPLE INTEREST QUALIFYING LOAN: As of any Determination Date,
any Simple Interest Mortgage Loan that was neither prepaid in full during the
related Due Period, nor delinquent with respect to a payment that became due
during the related Due Period as of the close of business on the Determination
Date following such Due Period.
SIMPLE INTEREST SHORTFALL: As of any Distribution Date for
each Simple Interest Qualifying Loan, the excess, if any, of (i) 30 days'
interest on the Stated Principal Balance of such Mortgage Loan at the Mortgage
Rate for such Mortgage Loan, over (ii) the portion of the monthly payment
received from the Mortgagor for such Mortgage Loan allocable to interest with
respect to the related Due Period.
SPECIFIED SUBORDINATED AMOUNT: Prior to the Stepdown Date, an
amount equal to 1.50% of the Maximum Pool Principal Balance plus the Pre-Funding
Amount, if any, on the applicable date of determination, and on and after the
Stepdown Date, an amount equal to 3.00% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period,
subject to a minimum amount equal to the Floor Amount; PROVIDED, HOWEVER, that
if, on any Distribution Date, a Trigger Event has occurred, the Specified
Subordinated Amount shall not be reduced to the applicable percentage of the
then current aggregate Stated Principal Balance of the Mortgage Loans until the
Distribution Date on which a Trigger Event is no longer occurring.
STANDARD & POOR'S: Standard & Poor's Ratings Services, a
division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. If Standard & Poor's is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the address for notices to Standard & Poor's shall be ▇▇▇▇▇▇▇▇ &
▇▇▇▇'▇, ▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage
Surveillance Group - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. 2002-HE1, or such other
address as Standard & Poor's may hereafter furnish to the Depositor and the
Servicer.
STARTUP DAY: The Closing Date.
STATED PRINCIPAL BALANCE: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Trustee with
respect to the related Mortgage Loan representing payments or recoveries of
principal, including Advances in respect of scheduled payments of principal. For
purposes of any Distribution Date, the Stated Principal Balance of any Mortgage
Loan will give effect to any scheduled payments of principal received or
advanced prior to the related Remittance Date and any unscheduled principal
payments and other unscheduled principal collections received during the related
Prepayment Period.
STEPDOWN DATE: The later to occur of (i) the earlier to occur
of (a) the Distribution Date in May 2005 and (b) the Distribution Date on which
the aggregate Class Certificate Balances of the Class A Certificates is less
than $32,995,000 and (ii) the first
33
Distribution Date on which the Senior Enhancement Percentage (calculated for
this purpose only after taking into account payments of principal on the
Mortgage Loans on the last day of the related Due Period but prior to any
applications of Principal Distribution Amount to the Certificates) is greater
than or equal to the Senior Specified Enhancement Percentage.
SUBORDINATED AMOUNT: As of any Distribution Date, the excess,
if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
that Distribution Date plus the Pre-Funding Amount, if any, on such Distribution
Date (after taking into account any withdrawals therefrom on such Distribution
Date), over (b) the aggregate of the Class Certificate Balances of the Class A
and Subordinated Certificates as of such Distribution Date (after giving effect
to the payment of the Principal Remittance Amount on such Certificates on such
Distribution Date).
SUBORDINATED CERTIFICATES: As specified in the Preliminary
Statement.
SUBORDINATION DEFICIENCY: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Subordinated Amount applicable to
such Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
SUBORDINATION REDUCTION AMOUNT: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess Subordinated
Amount and (b) the Total Monthly Excess Spread.
SUBSERVICER: As defined in Section 3.02(a).
SUBSERVICING ACCOUNT: As defined in Section 3.08.
SUBSERVICING AGREEMENT: As defined in Section 3.02 hereof.
SUBSEQUENT CUT-OFF DATE: As to any Subsequent Mortgage Loans,
the date specified in the Addition Notice delivered in connection therewith,
which date shall be the close of business on the first day of the month in which
such Subsequent Mortgage Loans will be conveyed to the Trust Fund.
SUBSEQUENT MORTGAGE LOANS: The Mortgage Loans hereafter
transferred and assigned to the Trust Fund pursuant to Section 2.01(d), each of
which shall have been purchased by the Unaffiliated Seller under a Mortgage Loan
Purchase Agreement.
SUBSEQUENT TRANSFER: The transfer and assignment by the
Depositor to the Trust of the Subsequent Mortgage Loans pursuant to the terms
hereof.
SUBSEQUENT TRANSFER AGREEMENT: A subsequent transfer agreement
in substantially the form of Exhibit K.
SUBSEQUENT TRANSFER DATE: The Business Day on which a
Subsequent Transfer occurs.
34
SUBSTITUTE MORTGAGE LOAN: A Mortgage Loan substituted by the
Unaffiliated Seller or an Originator for a Deleted Mortgage Loan in accordance
with the terms of this Agreement or the related Mortgage Loan Purchase
Agreement, which must, on the date of such substitution, as confirmed in a
Request for Release, substantially in the form of Exhibit J, (i) have a Stated
Principal Balance, after deduction of the principal portion of the Scheduled
Payment due in the month of substitution, not in excess of, and not more than
10% less than, the Stated Principal Balance of the Deleted Mortgage Loan; (ii)
be accruing interest at a rate no lower than and not more than 1% per annum
higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio
no higher than that of the Deleted Mortgage Loan; (iv) have a remaining term to
maturity no greater than (and not more than one year less than that of) the
Deleted Mortgage Loan; and (v) comply with each representation and warranty set
forth in the Unaffiliated Seller's Agreement (if applicable) or the applicable
Mortgage Loan Purchase Agreement.
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such
term pursuant to Section 2.03.
SUPERIOR: Superior Federal Bank FSB, a federal savings bank.
SUPERIOR ASSIGNMENT AGREEMENT: The Assignment and Recognition
Agreement, dated as of April 30, 2002, by and among the Unaffiliated Seller, the
Depositor and Superior, and each other Assignment and Recognition Agreement by
and among the Unaffiliated Seller, the Depositor and Superior in connection with
any Subsequent Transfer of Superior Mortgage Loans.
SUPERIOR MORTGAGE LOAN: A Mortgage Loan which was acquired
from Superior by the Unaffiliated Seller pursuant to the Superior Purchase
Agreement, and which has been acquired by the Trust Fund.
SUPERIOR PURCHASE AGREEMENT: The Mortgage Loan Purchase and
Warranties Agreement, dated as of February 1, 2002, by and between the
Unaffiliated Seller and Superior.
TAX SERVICE CONTRACT: As defined in Section 3.09(a).
TELERATE PAGE 3750: The display page currently so designated
on the Bridge Telerate Service (or such other page as may replace that page on
that service for displaying comparable rates or prices).
TOTAL MONTHLY EXCESS SPREAD: As to any Distribution Date, an
amount equal to the excess if any, of (i) the interest collected (prior to the
Remittance Date) or advanced on the Mortgage Loans for Due Dates during the
related Due Period (net of Expense Fees, Premium Amount and Reimbursement
Amounts, if any) over (ii) the sum of the interest payable to the Classes of
Floating Rate Certificates on such Distribution Date.
TRANSFER: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
TRANSFER AFFIDAVIT: As defined in section 5.02(b).
35
TRANSFEROR CERTIFICATE: As defined in Section 5.02(b).
TRIGGER EVENT: The occurrence of either a Delinquency Trigger
Event or a Loss Trigger Event.
TRUST FUND: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and principal received on
or with respect thereto after the related Cut-off Date, other than such amounts
which were due on the Mortgage Loans on or before the related Cut-off Date; (ii)
each Account, and all amounts deposited therein pursuant to the applicable
provisions of this Agreement; (iii) property that secured a Mortgage Loan and
has been acquired by foreclosure, deed-in-lieu of foreclosure or otherwise; (iv)
all rights of the Depositor against the Unaffiliated Seller under the
Unaffiliated Seller's Agreement; (v) all rights of the Depositor against each
Originator under the related Assignment and Recognition Agreement and the
related Mortgage Loan Purchase Agreement; (vi) the Class A Insurance Policy;
(vii) the FDIC Guaranty; and (viii) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing.
TRUSTEE: Deutsche Bank National Trust Company and its
successors and, if a successor trustee is appointed hereunder, such successor.
TRUSTEE FEE: As to any Distribution Date, an amount equal to
the sum of (a) the product of one-twelfth of the Trustee Fee Rate times the sum
of (i) the aggregate Stated Principal Balances of the Mortgage Loans at the end
of the prior Due Period, and (ii) the amount on deposit in the Pre-Funding
Account at the end of such prior Due Period and (b) any reasonable compensation
and expenses of a separate trustee or co-trustee to be paid pursuant to Section
8.10(d).
TRUSTEE FEE RATE: With respect to each Mortgage Loan, 0.0055%
per annum.
UNAFFILIATED SELLER'S AGREEMENT: The Unaffiliated Seller's
Agreement, dated as of the date hereof, among the Unaffiliated Seller and the
Depositor relating to the sale of the Mortgage Loans from the Unaffiliated
Seller to the Depositor.
UNPAID INTEREST AMOUNTS: As of any Distribution Date and any
Class of Certificates, the sum of (a) the excess of (i) the sum of the Accrued
Certificate Interest Distribution Amount for such Distribution Date and any
portion of such Accrued Certificate Interest Distribution Amount from prior
Distribution Dates remaining unpaid over (ii) the amount in respect of interest
on such Class of Certificates actually distributed on the preceding Distribution
Date and (b) 30 days' interest on such excess at the applicable Pass-Through
Rate (to the extent permitted by applicable law).
UNPAID REALIZED LOSS AMOUNT: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
Applied Realized Loss Amounts with respect to such Class over (ii) the sum of
all distributions in reduction of such Applied Realized Loss Amounts on all
previous Distribution Dates. Any amounts distributed to a Class of Subordinated
Certificates in respect of any Unpaid Realized Loss Amount will not be applied
to reduce the Class Certificate Balance of such Class.
36
UPPER TIER REGULAR INTEREST: As described in the Preliminary
Statement.
UPPER TIER REMIC: As described in the Preliminary Statement.
U.S. PERSON: Shall mean (i) a citizen or resident of the
United States; (ii) a corporation (or entity treated as a corporation for tax
purposes) created or organized in the United States or under the laws of the
United States or of any state thereof, including, for this purpose, the District
of Columbia; (iii) a partnership (or entity treated as a partnership for tax
purposes) organized in the United States or under the laws of the United States
or of any state thereof, including, for this purpose, the District of Columbia
(unless provided otherwise by future Treasury regulations); (iv) an estate whose
income is includible in gross income for United States income tax purposes
regardless of its source; or (v) a trust, if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more U.S. Persons have authority to control all substantial decisions of
the trust. Notwithstanding the last clause of the preceding sentence, to the
extent provided in Treasury regulations, certain trusts in existence on August
20, 1996, and treated as U.S. Persons prior to such date, may elect to continue
to be U.S. Persons.
VOTING RIGHTS: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC CAP: With respect to the Mortgage Loans as of any
Distribution Date, the product of (i) the weighted average of the Adjusted Net
Mortgage Rates then in effect on the beginning of the related Due Period on the
Mortgage Loans, minus in the case of the WAC Cap as it applies to the Class A
Certificates only, the Premium Rate, and (ii) a fraction, the numerator of which
is 30 and the denominator of which is the actual number of days in the Interest
Accrual Period related to such Distribution Date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF MORTGAGE LOANS.
(a) The Depositor, concurrently with the execution and
delivery hereof, hereby sells, transfers, assigns, sets over and otherwise
conveys to the Trustee for the benefit of the Certificateholders, without
recourse, all the right, title and interest of the Depositor in and to the Trust
Fund, other than any Subsequent Mortgage Loans, which will be so sold,
transferred, assigned, set-over and conveyed on the related Subsequent Transfer
Date.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Unaffiliated Seller has delivered or caused to be delivered
to the Trustee for the benefit of the
37
Certificateholders the following documents or instruments with respect to each
Mortgage Loan so assigned (to the extent such documents or instruments are
required to be delivered by the related Originator under each Mortgage Loan
Purchase Agreement):
(i) the original Mortgage Note bearing all intervening
endorsements evidencing a complete chain of assignment from the
originator to the related Originator, endorsed "Pay to the order of
_________, without recourse" and signed in the name of the related
Originator by an authorized officer. To the extent that there is no
room on the face of the Mortgage Notes for endorsements, the
endorsement may be contained on an allonge, if state law so allows and
the Trustee is so advised by the related Originator that state law so
allows. If the Mortgage Loan was acquired by an Originator in a merger,
the endorsement must be by "[related Originator], successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or
originated by the related Originator while doing business under another
name, the endorsement must be by "[related Originator], formerly known
as [previous name]";
(ii) the original of any guarantee executed in connection
with the Mortgage Note;
(iii) the original Mortgage with evidence of recording
thereon. If in connection with any Mortgage Loan, the original Mortgage
with evidence of recording thereon can not be delivered on or prior to
the related Delivery Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation
or because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, then the related
Originator, as required by the terms of the related Mortgage Loan
Purchase Agreement, will be required to deliver to the Trustee a
photocopy of such Mortgage and (i) the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a
true and complete copy of the original recorded Mortgage promptly upon
receipt thereof by the related Originator (but in any event within 360
days from the related Delivery Date); or (ii) in the case of a Mortgage
where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original
recorded Mortgage;
(iv) the originals of all assumption, modification,
consolidation or extension agreements, if any, with evidence of
recording thereon;
(v) the original Assignment of Mortgage for each Mortgage
Loan, in form and substance acceptable for recording;
(vi) the originals of all intervening assignments of
mortgage, evidencing a complete chain of assignment from the originator
to the related Originator, with evidence of recording thereon or if any
such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage;
38
(vii) the original mortgagee policy of title insurance or,
in the event such original title policy is unavailable, a certified
true copy of the related policy binder or commitment for title
certified to be true and complete by the title insurance company; and
(viii) the security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage, if any.
From time to time, the Servicer shall forward to the Trustee
additional original documents, additional documents evidencing an assumption,
modification, consolidation or extension of a Mortgage Loan approved by the
Servicer, in accordance with the terms of this Agreement. All such mortgage
documents held by the Trustee as to each Mortgage Loan shall constitute the
"CUSTODIAL FILE".
On or prior to the related Delivery Date, the Unaffiliated
Seller shall deliver, or cause the related Originator to deliver, to the Trustee
Assignments of Mortgages, in blank, for each Mortgage Loan. The Trustee shall
promptly forward such Assignments of Mortgage to the Servicer for recording. No
later than thirty (30) Business Days following the later of the related Delivery
Date and the date of receipt by the Servicer of the recording information for a
Mortgage, the Servicer shall promptly submit or cause to be submitted for
recording, at the expense of the Unaffiliated Seller (the Unaffiliated Seller to
seek reimbursement from the related Originator under the applicable Mortgage
Loan Purchase Agreement) in the appropriate public office for real property
records, each Assignment of Mortgage referred to in Section 2.01(b)(v). The
Mortgage shall be assigned from the related Originator, to "Deutsche Bank
National Trust Company, as trustee under the Pooling and Servicing Agreement
dated as of April 1, 2002, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2002-HE1." In
the event that any such assignment is lost or returned unrecorded because of a
defect therein, the Unaffiliated Seller shall cause the related Originator to
promptly prepare a substitute assignment to cure such defect and thereafter
cause each such assignment to be duly recorded. In the event the Unaffiliated
Seller does not pay or otherwise reimburse the Servicer for any of the foregoing
costs of recording any such Assignment of Mortgage, the Servicer shall be
entitled to be reimbursed from the Trust Fund from amounts on deposit in the
Collection Account. In the event the related Originator fails to reimburse the
Unaffiliated Seller for the recording costs described above, upon receipt of
written direction from the Unaffiliated Seller, the Trustee shall assign its
rights under the applicable Mortgage Loan Purchase Agreement solely with respect
to payment of such expenses to the Unaffiliated Seller.
On or prior to the Closing Date, the Unaffiliated Seller shall
deliver to the Trustee a copy of the Data Tape Information in electronic,
machine readable medium in a form mutually acceptable to the Trustee.
In the event that such original or copy of any document
submitted for recordation to the appropriate public recording office is not so
delivered to the Trustee within 90 days following the related Delivery Date, and
in the event that the Originator does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Depositor,
the Trustee or the Class A Certificate Insurer, the Trustee shall notify the
related Originator to repurchase the Mortgage Loan pursuant to the related
Mortgage Loan Purchase
39
Agreement, upon the request of the Depositor, the Trustee or the Class A
Certificate Insurer, at the Repurchase Price and in the manner specified in
Section 2.03. The foregoing repurchase provision shall not apply in the event
that the related Originator cannot deliver such original or copy of any document
submitted for recordation to the appropriate public recording office within the
specified period due to a delay caused by the recording office in the applicable
jurisdiction; PROVIDED that the related Originator shall instead be required to
deliver a recording receipt of such recording office or, if such recording
receipt is not available, an officer's certificate of a servicing officer of the
Originator confirming that such document has been accepted for recording.
(c) PURCHASE AND SALE OF SUBSEQUENT MORTGAGE LOANS. (i)
Subject to the satisfaction of the conditions set forth in paragraph (ii) below,
and upon the Trustee's receipt of a Subsequent Transfer Agreement executed by
all other parties thereto, in consideration of the Trustee's delivery on the
related Subsequent Transfer Dates to or upon the order of the Depositor of all
or a portion of the balance of funds in the Pre-Funding Account, the Depositor
shall on any Subsequent Transfer Date sell, transfer, assign, set over and
convey to the Trustee without recourse but subject to terms and provisions of
this Agreement, all of the right, title and interest of the Depositor in and to
the Subsequent Mortgage Loans, including the outstanding principal of and
interest due on such Subsequent Mortgage Loans, and all other related assets
included or to be included in the Trust Fund with respect thereto.
The amount released from the Pre-Funding Account with respect
to a transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%)
of the aggregate Stated Principal Balances as of the related Subsequent Cut-off
Date of the Subsequent Mortgage Loans so transferred.
(ii) The Subsequent Mortgage Loans and the other property and
rights related thereto described in paragraph (a) above shall be transferred by
the Depositor to the Trust Fund only upon the satisfaction of each of the
following conditions on or prior to the related Subsequent Transfer Date:
(a) the Unaffiliated Seller shall have provided the
Depositor, the Trustee, the Rating Agencies and the Class A Certificate
Insurer with a timely Addition Notice, which shall include a Mortgage
Loan Schedule, listing the Subsequent Mortgage Loans and shall have
provided any other information reasonably requested by any of the
foregoing with respect to the Subsequent Mortgage Loans;
(b) the Servicer shall have deposited in the Collection
Account all collections of (x) principal in respect of the Subsequent
Mortgage Loans received and due after the related Subsequent Cut-off
Date and (y) interest due on the Subsequent Mortgage Loans after the
related Subsequent Cut-off Date;
(c) as of each Subsequent Transfer Date, the Unaffiliated
Seller was not insolvent nor will be made insolvent by such transfer
nor is the Unaffiliated Seller aware of any pending insolvency;
40
(d) such addition will not result in a "prohibited
transaction" (as defined in the REMIC Provisions) for any REMIC held by
the Trust Fund, and will not cause any REMIC held by the Trust Fund to
cease to qualify as a REMIC, as evidenced by an Opinion of Counsel with
respect to such matters (which may be a blanket opinion dated the
Closing Date);
(e) the Pre-Funding Period shall not have terminated;
(f) the Unaffiliated Seller shall have delivered to the
Trustee an executed Assignment and Recognition Agreement with respect
to each related Originator of Subsequent Mortgage Loans to be added to
the Trust Fund on such Subsequent Transfer Date;
(g) the Unaffiliated Seller shall have delivered to the
Trustee an Officer's Certificate confirming the satisfaction of each
condition precedent specified in this paragraph (ii), and the Opinion
of Counsel referenced in clause (d); and
(h) the Unaffiliated Seller and the Depositor shall have
delivered to the Trustee an executed copy of a Subsequent Transfer
Agreement, substantially in the form of Exhibit L hereto.
(iii) The obligation of the Trust Fund to purchase the
Subsequent Mortgage Loans on a Subsequent Transfer Date is subject to
the requirements that, following the purchase of such Subsequent
Mortgage Loans, and with respect to the entire mortgage loan pool:
(a) no more than 6% may be second liens;
(b) no more than 43% may be Fixed Rate Mortgage Loans;
(c) the weighted average original term to maturity may
not exceed 360 months;
(d) the weighted average gross Mortgage Rate must not be
less than 8.75%, or more than 9.25%;
(e) the weighted average LTV must not exceed 80%, and no
more than 47% of the Mortgage Loans may have LTVs in excess of 80%;
(f) no Mortgage Loan may have a Stated Principal Balance
in excess of $725,000 as of the related Cut-off Date;
(g) at least 80% of the Mortgage Loans must have
prepayment penalties;
(h) the weighted average Gross Margin for the Adjustable
Rate Mortgage Loans must be at least 6.25%; and
(i) the weighted average credit score (FICO score) must
be at least 590, and not more than 3% of the Mortgage Loans may have
credit scores below 500.
41
Any of the above requirements may be waived or modified in any
respect by the Class A Certificate Insurer.
(iv) In connection with the transfer and assignment of the
Subsequent Mortgage Loans, the Unaffiliated Seller shall satisfy the document
delivery requirements set forth in Section 2.01(b).
Section 2.02 ACCEPTANCE BY THE TRUSTEE OF THE MORTGAGE
LOANS.
The Trustee shall acknowledge, on each Delivery Date, receipt
of the documents identified in the Initial Certification in the form annexed
hereto as Exhibit E, and declares that it holds and will hold such documents and
the other documents delivered to it pursuant to Section 2.01, and that it holds
or will hold such other assets as are included in the Trust Fund, in trust for
the exclusive use and benefit of all present and future Certificateholders and
the Class A Certificate Insurer. The Trustee acknowledges that it will maintain
possession of the related Mortgage Notes in the State of California, unless
otherwise permitted by the Rating Agencies and the Class A Certificate Insurer.
In connection with each Delivery, the Trustee shall deliver
via facsimile (with original to follow the next Business Day) to the Depositor,
the Unaffiliated Seller and the Class A Certificate Insurer an Initial
Certification on or prior to the related Delivery Date, certifying receipt of
the related Mortgage Notes and Assignments of Mortgage for each related Mortgage
Loan. The Trustee shall not be responsible to verify the validity, sufficiency
or genuineness of any document in any Custodial File.
Within 90 days after the related Delivery Date, the Trustee
shall ascertain that all documents required to be delivered to it are in its
possession, and shall deliver to the Depositor, the Unaffiliated Seller and the
Class A Certificate Insurer a Final Certification to the effect that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in such certification
as an exception and not covered by such certification): (i) all documents
required to be delivered to it are in its possession; (ii) such documents have
been reviewed by it and appear regular on their face and relate to such Mortgage
Loan; (iii) based on its examination and only as to the foregoing documents, the
information set forth in items (1), (2) and (18) of the Mortgage Loan Schedule
and items (1), (9) and (17) of the Data Tape Information respecting such
Mortgage Loan is correct; and (iv) each Mortgage Note has been endorsed as
provided in Section 2.01 of this Agreement. The Trustee shall not be responsible
to verify the validity, sufficiency or genuineness of any document in any
Custodial File. Upon receipt of such Final Certification, if the Depositor, the
Unaffiliated Seller or the Class A Certificate Insurer determines that any
noncompliance identified by the Trustee is a breach of a representation or
warranty relating to such Mortgage Loan , such party shall give written notice
to the Trustee thereof.
The Trustee shall retain possession and custody of each
Custodial File in accordance with and subject to the terms and conditions set
forth herein. The Servicer shall promptly deliver to the Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Custodial File as come into the possession of the
Servicer from time to time.
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Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE UNAFFILIATED SELLER AND THE SERVICER.
(a) The Servicer hereby makes the representations and
warranties set forth in Schedule II hereto to the Depositor and the Trustee, as
of the Closing Date.
(b) CDC Mortgage Capital Inc., in its capacity as the
Unaffiliated Seller, hereby makes the representations and warranties set forth
in Schedule III hereto, as of the Closing Date.
(c) It is understood and agreed by the Servicer and the
Unaffiliated Seller that the representations and warranties set forth in Section
2.03 shall survive the transfer of the Mortgage Loans to the Trust Fund, and
shall inure to the benefit of the Trust Fund notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or failure to examine any Mortgage File. Upon discovery by any of
the Depositor, the Unaffiliated Seller, the Class A Certificate Insurer, the
Trustee or the Servicer of a breach by the Unaffiliated Seller of any of the
foregoing representations or any of the representations and warranties made
pursuant to the Unaffiliated Seller's Agreement or by any Originator of the
representations and warranties made pursuant to the related Assignment and
Recognition Agreement, the party discovering such breach shall give prompt
written notice to the others.
(d) Within 90 days of the earlier of either discovery by or
notice to the Unaffiliated Seller of any breach of a representation or warranty
set forth in the Unaffiliated Seller's Agreement that materially and adversely
affects the value of the Mortgage Loans or the interest of the Trustee, the
Class A Certificate Insurer or the Certificateholders therein, the Unaffiliated
Seller shall use its best efforts to cure such breach in all material respects
and, if such breach cannot be remedied, the Unaffiliated Seller shall, (i) if
such 90 day period expires prior to the second anniversary of the related
Delivery Date, remove such Mortgage Loan (a "DELETED MORTGAGE LOAN") from the
Trust Fund and substitute in its place a Substitute Mortgage Loan, in the manner
and subject to the conditions set forth in this Section 2,03; or (ii) repurchase
such Mortgage Loan at the Repurchase Price; PROVIDED, HOWEVER, that any such
substitution pursuant to (i) above shall not be effected prior to the delivery
to the Trustee of the Opinion of Counsel required by Section 2.05, if any, and a
Request for Release substantially in the form of Exhibit K, and the Mortgage
File for any such Substitute Mortgage Loan
With respect to any Substitute Mortgage Loan or Loans, the
Unaffiliated Seller shall deliver to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related Assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No substitution is permitted to be made in any calendar month
after the Determination Date for such month. Scheduled Payments due with respect
to Substitute Mortgage Loans in the Due Period of substitution shall not be part
of the Trust Fund and will be retained by the related Originator on the next
succeeding Distribution Date. For the Due Period of substitution, distributions
to Certificateholders will include the monthly payment due on any Deleted
Mortgage Loan for such Due Period and thereafter the related Originator shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan.
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For any month in which the Unaffiliated Seller substitutes one
or more Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (after application of the scheduled principal portion of the monthly
payments due in the Due Period of substitution). The Unaffiliated Seller shall
deposit the amount of such shortage (the "SUBSTITUTION ADJUSTMENT AMOUNT") plus,
an amount equal to the aggregate of any unreimbursed Advances and accrued and
unpaid Servicing Fees with respect to such Deleted Mortgage Loans into the
Collection Account on or before the Distribution Account Deposit Date for the
Distribution Date in the month succeeding the calendar month during which the
related Mortgage Loan became required to be purchased or replaced hereunder.
Upon discovery that any document does not comply with the
requirements set forth in clauses (i) through (iv) of the Trustee's review of
the Custodial Files pursuant to Section 2.02 or receipt of written notice of a
breach of a representation and warranty or written notice that a Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the Trustee shall in turn promptly notify the applicable
Originator (with a copy to the Servicer, the Class A Certificate Insurer and the
Unaffiliated Seller) in writing of such non compliance or breach and request
that the related Originator cure such non compliance or breach within the time
period set forth in the applicable Mortgage Loan Purchase Agreement (but in any
event, within 60 days from the date the related Originator is notified of such
non compliance or breach) and if the related Originator does not cure such non
compliance or breach in all material respects during such period, the Trustee
shall notify such Originator to repurchase such Mortgage Loan from the Trust
Fund at the Repurchase Price, and such repurchase must occur no later than the
90th day following the Trustee's original notice of such noncompliance or breach
if such noncompliance or breach is a failure of the Mortgage Loan to constitute
a "qualified mortgage" within the meaning of Section 860G(a)(3) of the Code;
PROVIDED, HOWEVER, that notwithstanding anything to the contrary set forth in
this Agreement and notwithstanding the FDIC Guaranty, if Superior fails to
repurchase any Superior Mortgage Loan that does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code within 30 days of
receiving notice of such noncompliance or breach, the Unaffiliated Seller shall
use commercially reasonable efforts to sell such Superior Mortgage Loan prior to
the 90th day following the Trustee's original notice of such noncompliance or
breach. If the Unaffiliated Seller does not sell such Superior Mortgage Loan
prior to such 90th day, the Unaffiliated Seller shall repurchase from the Trust
Fund such Superior Mortgage Loan on such 90th day by depositing the Repurchase
Price into the Collection Account on such date. The Unaffiliated Seller shall
not be liable to the Trustee, the Certificateholders or any other party for any
failure to maximize proceeds with respect to any Superior Mortgage Loan for
which it is required to sell pursuant to this Agreement, provided such sale is
conducted in a commercially reasonable manner.
Upon delivery of the Final Certification with respect to each
Mortgage Loan, the Trustee will notify the related Originator within 5 Business
Days of such delivery of any missing documents from the Custodial File and if
the related Originator does not deliver such missing documents within 60 days
from the date the related Originator is notified of such noncompliance or
breach, the Trustee shall notify such Originator to repurchase such Mortgage
Loan from the Trust Fund at the Repurchase Price.
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If the missing document, non compliance or breach is
discovered prior to the FDIC Guaranty Notice Date and if the Originator is
Superior and Superior fails or is unable to deliver the missing documents or
correct or cure the non compliance or breach within 30 days of notice of such
missing document, non compliance or breach, the Trustee shall promptly notify
the Depositor, the Servicer, the Class A Certificate Insurer, the Unaffiliated
Seller and the FDIC (in accordance with the terms of the FDIC Guaranty) in
writing of such failure to correct or cure such missing document, non compliance
or breach (the date of such notice to the FDIC, the "FDIC NOTICE DATE"). The
Trustee shall pursue all legal remedies available to the Trustee against the
related Originator (excluding Superior until subsequent to the FDIC Guaranty
Termination Date) under the related Mortgage Loan Purchase Agreement if the
Trustee has received written notice from the Depositor, the Class A Certificate
Insurer or the Unaffiliated Seller directing the Trustee to pursue such remedies
and received reasonable indemnity satisfactory to the Trustee in accordance with
Sections 6.03 and 8.02.
With respect to any Mortgage Loan for which the FDIC has been
notified of Superior's failure to cure or repurchase such Mortgage Loan (an
"FDIC GUARANTY CLAIM LOAN"), the Trustee shall notify the Servicer, the
Unaffiliated Seller and the Class A Certificate Insurer in writing on the 90th
day prior to the FDIC Guaranty Termination Date that the FDIC Guaranty with
respect to such Mortgage Loan will expire within 90 days. With respect to any
FDIC Guaranty Claim Loan that is a non-performing Mortgage Loan (i.e., 60 days
or more Delinquent as of the beginning of such period), the Servicer shall use
commercially reasonable efforts to sell or liquidate such Mortgage Loan within
such 90 day period. The Servicer shall not be liable to the Trustee, the
Certificateholders or any other party for any failure to maximize proceeds with
respect to any FDIC Guaranty Claim Loan for which it is required to sell prior
to the FDIC Guaranty Termination Date pursuant to this Agreement, provided such
sale is conducted in a commercially reasonable manner. With respect to any FDIC
Guaranty Claim Loan that is a performing Mortgage Loan (i.e., 59 days or less
Delinquent as of the beginning of such period), the Unaffiliated Seller shall
use commercially reasonable efforts to sell such Mortgage Loan within such 90
day period. The Unaffiliated Seller shall not be liable to the Trustee, the
Certificateholders or any other party for any failure to maximize proceeds with
respect to any FDIC Guaranty Claim Loans for which it is required to sell prior
to the FDIC Guaranty Termination Date pursuant to this Agreement, provided such
sale is conducted in a commercially reasonable manner. If the Unaffiliated
Seller fails to sell the FDIC Guaranty Claim Loan within such 90 day period, the
Unaffiliated Seller shall repurchase the FDIC Guaranty Claim Loan at the
Repurchase Price. In connection with such repurchase, the Unaffiliated Seller
shall deposit the Repurchase Price with respect to such FDIC Guaranty Claim Loan
into the Collection Account on or prior to the Remittance Date immediately
following the applicable FDIC Guaranty Termination Date. If the Unaffiliated
Seller (or any successor thereto) is no longer in business or has otherwise
ceased its operations as in effect on the Closing Date, the Class A Certificate
Insurer may direct the Servicer to sell the performing FDIC Guaranty Claim Loan
(giving the Servicer at least 90 days written notice to execute such sale). Any
sale of any Superior Mortgage Loan by the Servicer or the Unaffiliated Seller,
as applicable, shall in all circumstances, be without recourse to the Trust
Fund. The Class A Certificate Insurer, in its sole discretion, may direct either
the Servicer or the Unaffiliated Seller in writing not to sell or liquidate (in
the case of the Servicer) any FDIC Guaranty Claim Loan. The Unaffiliated Seller
45
will not be liable to deposit the Repurchase Price with respect to any FDIC
Guaranty Claim Loan that the Class A Certificate Insurer has directed the
Unaffiliated Seller not to sell.
Upon the sale or liquidation of any such Superior Mortgage
Loan prior to the FDIC Guaranty Termination Date, the Servicer or the
Unaffiliated Seller, as applicable, shall promptly deliver an officer's
certificate to the Trustee as to any loss that has occurred with respect to such
sale or liquidation, the amount of such loss, if any (taking into account
unreimbursed Advances and accrued and unpaid Servicing Fees with respect to such
Mortgage Loan, and the expenses of such sale), and the supporting calculations
with respect thereto. Upon receipt of such officer's certificate, the Trustee
shall promptly, but in any event prior to the FDIC Guaranty Termination Date,
make a claim for reimbursement of such loss pursuant to the terms of the FDIC
Guaranty by submitting a claim substantially in the form of Exhibit L attached
hereto. All payments received by the Trustee in immediately available funds
under the FDIC Guaranty by the Business Day immediately preceding a Distribution
Date shall be distributed on such Distribution Date. In no event shall the
Trustee be obligated to advance all or any portion of such loss or any amounts
to be received if not received by the close of business on the Business Day
immediately preceding such Distribution Date.
Based solely on information received with respect to any
Substitute Mortgage Loan from the Unaffiliated Seller or the related Originator,
as applicable, the Servicer shall amend the Mortgage Loan Schedule to reflect
the removal of such Deleted Mortgage Loan and the substitution of the Substitute
Mortgage Loan or Loans and the Servicer shall deliver the amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, the Substitute Mortgage Loan or
Loans shall be subject to the terms of this Agreement in all respects, and the
Unaffiliated Seller shall be deemed to have made with respect to such Substitute
Mortgage Loan or Loans, as of the date of substitution, the representations and
warranties (if any) made pursuant to the Unaffiliated Seller's Agreement with
respect to such Mortgage Loan. Upon any such substitution and the deposit to the
Collection Account of the amount required to be deposited therein in connection
with such substitution as described in the following paragraph, the Trustee
shall release the Mortgage File relating to such Deleted Mortgage Loan to the
Unaffiliated Seller or the related Originator, as applicable, and shall execute
and deliver at the Unaffiliated Seller's or the related Originator's direction
such instruments of transfer or assignment prepared by such party, in each case
without recourse, as shall be necessary to vest title in the Unaffiliated Seller
or the related Originator, or its designee, as applicable, the Trustee's
interest in any Deleted Mortgage Loan substituted for pursuant to this Section
2.03.
Subject to the foregoing paragraphs with respect to the
Superior Mortgage Loans, in the event that the Unaffiliated Seller or the
related Originator, as applicable, shall have repurchased a Mortgage Loan, the
Repurchase Price therefor shall be deposited in the Collection Account pursuant
to Section 3.10 on or before the Remittance Date for the Distribution Date in
the month following the month during which the Unaffiliated Seller or the
related Originator became obligated hereunder to repurchase or replace such
Mortgage Loan and upon such deposit of the Repurchase Price, the delivery of the
Opinion of Counsel required by Section 2.05 and receipt of a Request for Release
in the form of Exhibit J hereto, the Trustee shall release the related Custodial
File to such Person as directed by the Servicer, and the Trustee shall execute
and deliver at such Person's direction such instruments of transfer or
assignment prepared by such Person, in each case without recourse, as shall be
necessary to transfer title from the
46
Trustee. It is understood and agreed that the obligation under this Agreement of
any Person to cure, repurchase or replace any Mortgage Loan (other than Superior
Mortgage Loans) as to which a breach has occurred and is continuing shall
constitute the sole remedy against such Persons respecting such breach available
to Certificateholders, the Depositor, the Unaffiliated Seller, the Class A
Certificate Insurer or the Trustee on their behalf. In the event such required
repurchase or replacement does not occur, the Trustee shall take such actions as
directed upon written direction from the Depositor or the Class A Certificate
Insurer and the provision of reasonable indemnity satisfactory to the Trustee in
accordance with Sections 6.03 and 8.02.
If the Unaffiliated Seller is required to repurchase or
replace a Mortgage Loan pursuant to the terms hereof, upon receipt of written
direction from the Unaffiliated Seller the Trustee shall assign to the
Unaffiliated Seller its rights under the related Mortgage Loan Purchase
Agreement solely with respect to such Mortgage Loan.
The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the respective Custodial Files to the
Trustee.
Section 2.04 THE DEPOSITOR AND THE MORTGAGE LOANS.
The Depositor hereby represents and warrants to the Trustee
and to the Class A Certificate Insurer with respect to each Mortgage Loan as of
the date hereof or such other date set forth herein that as of the related
Delivery Date, and following the transfer of the Mortgage Loans to it by the
Unaffiliated Seller, the Depositor had good title to the Mortgage Loans and the
Mortgage Notes were subject to no offsets, defenses or counterclaims.
The Depositor hereby assigns, transfers and conveys to the
Trustee all of its rights with respect to the Initial Mortgage Loans and shall,
on each subsequent Transfer Date, convey all of its right, title and interest
with respect to the related subsequent Mortgage Loans.
Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION
WITH SUBSTITUTIONS AND NON-QUALIFIED MORTGAGES.
Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.03 shall be made more than 30 days after the
related Delivery Date unless the Unaffiliated Seller delivers, or causes the
related Originator to deliver, to the Trustee an Opinion of Counsel, at the
expense of the Unaffiliated Seller, addressed to the Trustee, to the effect that
such substitution will not (i) result in the imposition of the tax on
"prohibited transactions" on the Trust Fund or contributions after the Startup
Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively or
(ii) cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Section 2.06 EXECUTION AND DELIVERY OF CERTIFICATES.
The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has executed
and delivered to or upon the order of the Depositor, the Certificates in
authorized denominations evidencing directly or indirectly the entire ownership
of the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise
47
the rights referred to above for the benefit of all present and future Holders
of the Certificates, and for the benefit of the Class A Certificate Insurer.
Section 2.07 REMIC MATTERS.
The Preliminary Statement sets forth the designations for
federal income tax purposes of all interests created hereby. The "Startup Day"
for purposes of the REMIC Provisions shall be the Closing Date. The "latest
possible maturity date" is January 25, 2033, which is the sixth Distribution
Date following the latest Mortgage Loan maturity date.
Section 2.08 REPRESENTATIONS AND WARRANTIES OF THE
DEPOSITOR.
The Depositor hereby represents, warrants and covenants to the
Trustee, the Servicer and to the Class A Certificate Insurer and the that as of
the date of this Agreement or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to
convey the Mortgage Loans and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor, all requisite corporate action having
been taken, and, assuming the due authorization, execution and delivery hereof
by the other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or
48
encumbrance which would have a material adverse effect upon the Mortgage Loans
or any documents or instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or
against or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's reasonable
judgment, might materially and adversely affect the performance by the Depositor
of its obligations under this Agreement, or the validity or enforceability of
this Agreement;
(g) The Depositor is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee, the Depositor had, or, with respect to the subsequent
Mortgage Loans, will have, good title to, and was, or will be, the sole owner of
each Mortgage Loan, free of any interest of any other Person, and the Depositor
has transferred, or shall transfer, all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders and
for the benefit of the Class A Certificate Insurer, all right, title, and
interest of the Depositor thereto as note holder and mortgagee or (ii) to grant
to the Trustee, for the benefit of the Certificateholders and for the benefit of
the Class A Certificate Insurer, the security interest referred to in Section
10.04 hereof.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.08 shall survive delivery
of the respective Custodial Files to the Trustee or to a custodian, as the case
may be, and shall inure to the benefit of the Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 SERVICER TO SERVICE MORTGAGE LOANS.
(a) For and on behalf of the Certificateholders and for the
benefit of the Class A Certificate Insurer, the Servicer shall service and
administer the Mortgage Loans in accordance with the terms of this Agreement and
the respective Mortgage Loans and, to the extent consistent with such terms, in
the same manner in which it services and administers similar mortgage loans for
its own portfolio, giving due consideration to customary and usual standards of
practice of mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Servicer, any Subservicer
or any Affiliate of the Servicer or any Subservicer may have with the
related Mortgagor;
49
(ii) the ownership or non-ownership of any Certificate by
the Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or
Servicing Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any
particular transaction.
To the extent consistent with the foregoing, the Servicer
shall seek to maximize the timely and complete recovery of principal and
interest on the Mortgage Notes. Subject only to the above-described servicing
standards and the terms of this Agreement and of the respective Mortgage Loans,
the Servicer shall have full power and authority, acting alone or through
Subservicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Servicer in its own name or in the name of a Subservicer is hereby authorized
and empowered by the Trustee when the Servicer believes it appropriate in its
best judgment in accordance with the servicing standards set forth above, to
execute and deliver any and all instruments of satisfaction or cancellation, or
of partial or full release or discharge, and all other comparable instruments,
with respect to the Mortgage Loans and the Mortgaged Properties and to institute
foreclosure proceedings or obtain a deed-in-lieu of foreclosure so as to convert
the ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. The Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Servicer shall also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.15, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and any Subservicer
such documents as are necessary or appropriate to enable the Servicer or any
Subservicer to carry out their servicing and administrative duties hereunder,
and the Trustee hereby grants to the Servicer, and this Agreement shall
constitute, a power of attorney to carry out such duties including a power of
attorney to take title to Mortgaged Properties after foreclosure on behalf of
the Trustee. The Trustee shall execute a separate power of attorney in favor of
the Servicer for the purposes described herein to the extent necessary or
desirable to enable the Servicer to perform its duties hereunder. The Trustee
shall not be liable for the actions of the Servicer or any Subservicers under
such powers of attorney.
(b) Subject to Section 3.09(b) hereof, in accordance with the
standards of the preceding paragraph, the Servicer shall advance or cause to be
advanced funds as necessary for the purpose of effecting the timely payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09(b), and further as provided in
Section 3.11. Any cost incurred by the Servicer or by Subservicers in effecting
the timely payment of taxes and assessments on a Mortgaged Property shall not be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
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(c) Notwithstanding anything in this Agreement to the
contrary, the Servicer may not make any future advances with respect to a
Mortgage Loan (except as provided in Section 4.01) and the Servicer shall not
(i) permit any modification with respect to any Mortgage Loan that would change
the Mortgage Rate, reduce or increase the principal balance (except for
reductions resulting from actual payments of principal) or change the final
maturity date on such Mortgage Loan or (ii) permit any modification, waiver or
amendment of any term of any Mortgage Loan that would both (A) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or
final, temporary or proposed Treasury regulations promulgated thereunder) and
(B) cause any REMIC to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or "contributions after the
startup date" under the REMIC Provisions, or (iii) except as provided in Section
3.07(a), waive any Prepayment Charges.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
Section 3.02 SUBSERVICING AGREEMENTS BETWEEN THE SERVICER
AND SUBSERVICERS.
(a) The Servicer may enter into Subservicing Agreements with
Subservicers, for the servicing and administration of the Mortgage Loans.
Each Subservicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Subservicing Agreement and will be familiar with
the terms thereof. The terms of any Subservicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The Servicer and the
Subservicers may enter into and make amendments to the Subservicing Agreements
or enter into different forms of Subservicing Agreements; PROVIDED, HOWEVER,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Trustee, without the consent of
the Trustee. Any variation without the consent of the Trustee from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee, the Unaffiliated Seller, the Class A Certificate Insurer and the
Depositor copies of all Subservicing Agreements, and any amendments or
modifications thereof, promptly upon the Servicer's execution and delivery of
such instruments.
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(b) As part of its servicing activities hereunder, the
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee, shall enforce the obligations of each
Subservicer under the related Subservicing Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Subservicing Agreement. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Subservicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as the Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. The Servicer shall pay the costs of such enforcement at its own expense,
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 3.03 SUCCESSOR SUBSERVICERS.
The Servicer shall be entitled to terminate any Subservicing
Agreement and the rights and obligations of any Subservicer pursuant to any
Subservicing Agreement in accordance with the terms and conditions of such
Subservicing Agreement. In the event of termination of any Subservicer, all
servicing obligations of such Subservicer shall be assumed simultaneously by the
Servicer without any act or deed on the part of such Subservicer or the
Servicer, and the Servicer either shall service directly the related Mortgage
Loans or shall enter into a Subservicing Agreement with a successor Subservicer
which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that
such agreement may be immediately terminated by the Depositor or the Trustee
without fee, in accordance with the terms of this Agreement, in the event that
the Servicer shall, for any reason, no longer be the Servicer (including
termination due to an Event of Default).
Section 3.04 LIABILITY OF THE SERVICER.
Notwithstanding any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and a Subservicer or reference to actions taken through a Subservicer
or otherwise, the Servicer shall remain obligated and primarily liable to the
Trustee for the servicing and administering of the Mortgage Loans in accordance
with the provisions of Section 3.01 without diminution of such obligation or
liability by virtue of such Subservicing Agreements or arrangements or by virtue
of indemnification from the Subservicer and to the same extent and under the
same terms and conditions as if the Servicer alone were servicing and
administering the Mortgage Loans. The Servicer shall be entitled to enter into
any agreement with a Subservicer for indemnification of the Servicer by such
Subservicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
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Section 3.05 NO CONTRACTUAL RELATIONSHIP BETWEEN SUBSERVICERS
AND THE TRUSTEE.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor Servicer) shall not be deemed
a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 ASSUMPTION OR TERMINATION OF SUBSERVICING
AGREEMENTS BY TRUSTEE.
In the event the Servicer at any time shall for any reason no
longer be the Servicer (including by reason of the occurrence of a Event of
Default), the Trustee or its designee shall thereupon assume all of the rights
and obligations of the Servicer under each Subservicing Agreement that the
Servicer may have entered into, with copies thereof provided to the Trustee
prior to the Trustee assuming such rights and obligations, unless the Trustee
elects to terminate any Subservicing Agreement in accordance with its terms as
provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the
successor servicer shall be deemed, subject to Section 3.03, to have assumed all
of the Servicer's interest therein and to have replaced the Servicer as a party
to each Subservicing Agreement to the same extent as if each Subservicing
Agreement had been assigned to the assuming party, except that (i) the Servicer
shall not thereby be relieved of any liability or obligations under any
Subservicing Agreement that arose before it ceased to be the Servicer and (ii)
none of the Depositor, the Trustee, their designees or any successor Servicer
shall be deemed to have assumed any liability or obligation of the Servicer that
arose before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Subservicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Subservicing Agreements to the assuming party.
Section 3.07 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS;
ESTABLISHMENT OF CERTAIN ACCOUNTS.
(a) The Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Servicer may (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) extend the due dates for the Scheduled
Payments due on a Mortgage Note for a period of not greater than 180 days;
provided that any extension pursuant to clause (ii) above shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii)
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above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding the foregoing, the Servicer may not waive, in whole or in part,
a Prepayment Charge, except under the following circumstances: (i) such waiver
relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of the Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan,
and doing so is standard and customary in servicing mortgage loans similar to
the Mortgage Loans (including any waiver of a Prepayment Charge in connection
with a refinancing of a Mortgage Loan that is related to a default or a
reasonably foreseeable default), and in no event will the Servicer waive a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
not related to a default or a reasonably foreseeable default or (ii) such
Prepayment Charge is not permitted to be collected by applicable law. If a
Prepayment Charge is waived other than as permitted by the prior sentence, then
the Servicer is required to pay the amount of such waived Prepayment Charge, for
the benefit of the Holders of the Class P Certificates, by depositing such
amount into the Collection Account together with and at the time that the amount
prepaid on the related Mortgage Loan is required to be deposited into the
Collection Account.
(b) (i) The Trustee shall establish and maintain the
Excess Reserve Fund Account, on behalf of the Class X Certificateholders, to
secure their limited recourse obligation to pay to the Floating Rate
Certificateholders Basis Risk CarryForward Amounts.
(ii) On each Distribution Date, the Trustee shall
deposit the amount of any Basis Risk Payment for such date into the
Excess Reserve Fund Account.
(c) (i) On each Distribution Date on which there
exists a Basis Risk CarryForward Amount on any Class of Certificates, the
Trustee shall (1) withdraw from the Distribution Account and deposit in the
Excess Reserve Fund Account, as set forth in Section 4.02(a)(iii)(f), the lesser
of the Class X Distributable Amount (without regard to the reduction in the
definition thereof with respect to the Basis Risk CarryForward Amount) (to the
extent remaining after the distributions specified in Sections
4.02(a)(iii)(a)-(e)) and the Basis Risk CarryForward Amount and (2) withdraw
from the Excess Reserve Fund Account amounts necessary to pay to such Class or
Classes of Certificates the Basis Risk CarryForward Amount. Such payments shall
be allocated to those Classes on a pro rata basis based upon the amount of Basis
Risk CarryForward Amount owed to each such Class and shall be paid in the
priority set forth in Section 4.02(a)(iii)(g) hereof.
(ii) The Trustee shall account for the Excess
Reserve Fund Account as an outside reserve fund within the meaning of
Treasury regulation 1.860G-2(h) and not as an asset of any REMIC
created pursuant to this Agreement. The beneficial owner of the Excess
Reserve Fund Account is the Class X Certificateholder. For all federal
tax purposes, amounts transferred by the Upper Tier REMIC to the Excess
Reserve Fund Account shall be treated as distributions by the Trustee
to the Class X Certificateholder.
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(iii) Any Basis Risk CarryForward Amounts paid by
the Trustee to the Floating Rate Certificateholders shall be accounted
for by the Trustee as amounts paid first to the Holders of the Class X
Certificate and then to the respective Class or Classes of Floating
Rate Certificates. In addition, the Trustee shall account for the
Floating Rate Certificateholders' rights to receive payments of Basis
Risk CarryForward Amounts as rights in a limited recourse interest rate
cap contract written by the Class X Certificateholders in favor of the
Floating Rate Certificateholders.
(iv) Notwithstanding any provision contained in
this Agreement, the Trustee shall not be required to make any payments
from the Excess Reserve Fund Account except as expressly set forth in
this Section 3.07(c).
(d) The Trustee shall establish and maintain the
Distribution Account on behalf of the Certificateholders. The Trustee shall,
promptly upon receipt, deposit in the Distribution Account and retain therein
the following:
(i) the aggregate amount remitted by the
Servicer to the Trustee pursuant to 3.11;
(ii) any amount deposited by the Servicer
pursuant to Section 3.10 in connection with any losses on Permitted
Investments; and
(iii) any other amounts deposited hereunder which
are required to be deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not
required to be remitted, it may at any time direct the Trustee in writing to
withdraw such amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
notice to the Trustee which describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 4.02. In
no event shall the Trustee incur liability for withdrawals from the Distribution
Account at the direction of the Servicer.
(e) The Trustee shall establish and maintain the
Capitalized Interest Account, on behalf of the Certificateholders. On the
Closing Date, the Trustee shall deposit $348,382 to the Capitalized Interest
Account from the proceeds of the sale of the Offered Certificates. Withdrawals
from the Capitalized Interest Account shall be made in accordance with Sections
4.02(c) and (d) hereof. The Trustee shall account for the Capitalized Interest
Account as an outside reserve fund within the meaning of Treasury Regulation
1.860G-2(h) and not as an asset of any REMIC created pursuant to this Agreement.
The beneficial owner of the Capitalized Interest Account shall be the
Unaffiliated Seller.
(f) The Trustee shall establish and maintain the
Pre-Funding Account, on behalf of the Certificateholders. On the Closing Date,
the Trustee shall deposit the Original Pre-Funded Amount to the Pre-Funding
Account from the proceeds of the sale of the Offered Certificates. Withdrawals
from the Pre-Funding Account shall be made in accordance with Sections 4.02(e),
(f) and (g) hereof.
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(g) The Trustee may invest the funds in the Accounts if
directed in writing by the Servicer, with respect to the Collection Account and
the Distribution Account or by the Unaffiliated Seller, with respect to the
Pre-Funding Account and the Capitalized Interest Account in each case, in
Permitted Investments, which directions shall be in accordance with Section
3.12.
(h) The Servicer shall give notice to the Trustee, each
Rating Agency and the Depositor of any proposed change of the location of the
Collection Account not later than 30 days and not more than 45 days prior to any
change thereof.
Section 3.08 SUBSERVICING ACCOUNTS.
In those cases where a Subservicer is servicing a Mortgage
Loan pursuant to a Subservicing Agreement, the Subservicer will be required to
establish and maintain one or more accounts (collectively, the "SUBSERVICING
ACCOUNT"). The Subservicing Account shall be an Eligible Account and shall
otherwise be acceptable to the Servicer. The Subservicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Subservicer's receipt thereof, all proceeds
of Mortgage Loans received by the Subservicer less its servicing compensation to
the extent permitted by the Subservicing Agreement, and shall thereafter deposit
such amounts in the Subservicing Account, in no event more than two Business
Days after the deposit of such funds into the clearing account. The Subservicer
shall thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Subservicing Account.
For purposes of this Agreement, the Servicer shall be deemed to have received
payments on the Mortgage Loans when the Subservicer receives such payments.
Section 3.09 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR
ITEMS; ESCROW ACCOUNTS.
(a) The Servicer shall ensure that each of the Mortgage
Loans shall be covered by a paid-in-full, life-of-the-loan tax service contract
with a nationally recognized provider acceptable to the Servicer (each, a "TAX
SERVICE CONTRACT"). Each Tax Service Contract shall be assigned to the Trustee,
or its designee, at the Servicer's expense in the event that the Servicer is
terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this
paragraph (b) are not otherwise provided pursuant to the Tax Service Contracts
described in paragraph (a) hereof, the Servicer undertakes to perform such
functions. The Servicer shall establish and maintain, or cause to be established
and maintained, one or more accounts (the "ESCROW ACCOUNTS"), which shall be
Eligible Accounts. The Servicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer's receipt thereof, all collections from the Mortgagors (or related
advances from Subservicers) for the payment of taxes, assessments,
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hazard insurance premiums and comparable items for the account of the Mortgagors
("ESCROW PAYMENTS") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the Servicer (or a Subservicer to
the extent provided in the related Subservicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay interest, if required and as described below, to Mortgagors on balances in
the Escrow Account; (v) clear and terminate the Escrow Account at the
termination of the Servicer's obligations and responsibilities in respect of the
Mortgage Loans under this Agreement or (vi) recover amounts deposited in error.
As part of its servicing duties, the Servicer or Subservicers shall pay to the
Mortgagors interest on funds in Escrow Accounts, to the extent required by law
and, to the extent that interest earned on funds in the Escrow Accounts is
insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Servicer shall determine whether any such payments are made
by the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The Servicer
assumes full responsibility for the payment of all such bills within such time
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments; PROVIDED,
HOWEVER, that such advances are deemed to be Servicing Advances.
Section 3.10 COLLECTION ACCOUNT.
(a) On behalf of the Trustee, the Servicer shall
establish and maintain, or cause to be established and maintained, one or more
Eligible Accounts (such account or accounts, the "COLLECTION ACCOUNT"), held in
trust for the benefit of the Trustee. On behalf of the Trustee, the Servicer
shall deposit or cause to be deposited in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it
subsequent to the related Cut-off Date (other than in respect of principal or
interest on the related Mortgage Loans due on or before the related Cut-off
Date, and except for $633,421.80 in interest, which is being retained by the
Unaffiliated Seller), or payments (other than Principal Prepayments) received by
it on or prior to the related Cut-off Date but allocable to a Due Period
subsequent thereto:
(i) all payments on account of principal,
including Principal Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of
the related Servicing Fee) on each Mortgage Loan;
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(iii) all Insurance Proceeds to the extent such
Insurance Proceeds are not to be applied to the restoration of the
related Mortgaged Property or released to the related Mortgagor in
accordance with the express requirements of law or in accordance with
prudent and customary servicing practices and Liquidation Proceeds;
(iv) any amounts required to be deposited
pursuant to Section 3.12 in connection with any losses realized on
Permitted Investments with respect to funds held in the Collection
Account;
(v) any amounts required to be deposited by the
Servicer pursuant to the second paragraph of Section 3.13(a) in respect
of any blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan
repurchased or purchased in accordance with this Agreement; and
(vii) all Prepayment Charges collected by the
Servicer.
The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, NSF fees, reconveyance fees, assumption fees and other similar fees and
charges need not be deposited by the Servicer in the Collection Account and
shall, upon collection, belong to the Servicer as additional compensation for
its servicing activities. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
(b) No later than the Closing Date, the Servicer, on
behalf of the Trustee, shall establish and maintain a sub-account of the
Collection Account, in the name of the Trustee for the benefit of the
Certificateholders and designated "Deutsche Bank National Trust Company in trust
for registered holders of CDC Date Mortgage Capital Trust 2002-HE1, Mortgage
Pass-Through Certificates, Series 2002-HE1". On behalf of the Trustee, the
Servicer shall, on each Determination Date transfer from the Collection Account
to the Simple Interest Excess Sub-Account all Net Simple Interest Excess, if
any, pursuant to Section 3.11(a)(x), and shall maintain a record of all such
deposits. On behalf of the Trustee, the Servicer shall withdraw amounts on
deposit in the Simple Interest Excess Sub-Account on each Remittance Date for
deposit to the Distribution Account in an amount equal to the lesser of (i) the
amount on deposit therein, and (ii) the Net Simple Interest Shortfall for such
Remittance Date.
(c) The Servicer shall remit to the Trustee, which shall
thereupon distribute to the Class X Certificateholder, 90% of the balance in the
Simple Interest Excess Sub-Account on the Remittance Date occurring in October
of each year, commencing in October 2002, after making any other distributions
therefrom on such Remittance Date. Such distributions shall be deemed to be made
on a first-in, first-out basis.
(d) Funds in the Collection Account and the Simple
Interest Excess Sub-Account may be invested in Permitted Investments in
accordance with the provisions set forth in Section 3.12. The Servicer shall
give notice to the Trustee and the Depositor of the
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location of the Collection Account maintained by it when established and prior
to any change thereof.
Section 3.11 WITHDRAWALS FROM THE COLLECTION ACCOUNT.
(a) The Servicer shall, from time to time, make
withdrawals from the Collection Account or, to the extent specifically set forth
herein, the Simple Interest Excess Sub-Account, as applicable, for any of the
following purposes or as described in Section 4.01:
(i) On or prior to the Remittance Date, to remit
to the Trustee (i) the Trustee Fee with respect to such Distribution
Date and (ii) the Interest Remittance Amount and the Principal
Remittance Amount in respect of the related Distribution Date together
with all amounts representing Prepayment Charges from the Mortgage
Loans received during the related Prepayment Period;
(ii) to reimburse the Servicer for P&I Advances,
but only to the extent of amounts received which represent Late
Collections (net of the related Servicing Fees) of Monthly Payments on
Mortgage Loans with respect to which such P&I Advances were made in
accordance with the provisions of Section 4.01;
(iii) to pay the Servicer or any Subservicer (a)
any unpaid Servicing Fees or (b) any unreimbursed Servicing Advances
with respect to each Mortgage Loan, but only to the extent of any Late
Collections, Liquidation Proceeds, Insurance Proceeds or other amounts
as may be collected by the Servicer from a Mortgagor, or otherwise
received with respect to such Mortgage Loan (or the related REO
Property);
(iv) to pay to the Servicer as servicing
compensation (in addition to the Servicing Fee) on the Remittance Date
any interest or investment income earned on funds deposited in the
Collection Account and the Simple Interest Excess Sub-Account;
(v) to pay to the Unaffiliated Seller or the
related Originator, as applicable, with respect to each Mortgage Loan
that has previously been purchased or replaced by the Unaffiliated
Seller or such Originator, as applicable, pursuant to this Agreement,
all amounts received thereon subsequent to the date of purchase or
substitution, as the case may be;
(vi) to reimburse the Servicer for any P&I
Advance or Servicing Advance previously made which the Servicer has
determined to be a Nonrecoverable P&I Advance or Nonrecoverable
Servicing Advance in accordance with the provisions of Section 4.01;
(vii) to pay, or to reimburse the Servicer for
advances in respect of, expenses incurred in connection with any
Mortgage Loan pursuant to Section 3.15;
(viii) to reimburse the Servicer, the Depositor or
the Trustee for expenses incurred by or reimbursable to the Servicer,
the Depositor or the Trustee, as the case may be, pursuant to Section
6.03;
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(ix) to reimburse the Servicer, the Unaffiliated
Seller, the Depositor, the Class A Certificate Insurer or the Trustee,
as the case may be, for expenses reasonably incurred in respect of the
breach or defect giving rise to the purchase obligation under Section
2.03 of this Agreement that were included in the Repurchase Price of
the Mortgage Loan, including any expenses arising out of the
enforcement of the purchase obligation to the extent not otherwise paid
pursuant to the terms hereof;
(x) to deposit to the Simple Interest Excess
Sub-Account any amount required to be deposited therein pursuant to
Section 3.10(b);
(xi) to withdraw any amounts deposited in the
Collection Account or the Simple Interest Excess Sub-Account in error;
and
(xii) to clear and terminate the Collection
Account and the Simple Interest Excess Sub-Account upon termination of
this Agreement.
(b) The Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii)
and (ix) above. The Servicer shall provide written notification to the Trustee,
on or prior to the next succeeding Remittance Date, upon making any withdrawals
from the Collection Account pursuant to subclause (a)(vii) above.
Section 3.12 INVESTMENT OF FUNDS IN THE ACCOUNT.
(a) The Servicer may direct the Trustee to invest the
funds in the Collection Account, the Simple Interest Excess Sub-Account and the
Distribution Account, and the Unaffiliated Seller may direct the Trustee to
invest the funds in the Pre-Funding Account and the Capitalized Interest Account
(each of such Accounts, for purposes of this Section 3.12, an "INVESTMENT
ACCOUNT"), in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name of the Trustee. The Trustee
shall be entitled to sole possession (except with respect to investment
direction of funds held in the related Account and any income and gain realized
thereon) over each such investment, and any certificate or other instrument
evidencing any such investment shall be delivered directly to the Trustee or its
agent, together with any document of transfer necessary to transfer title to
such investment to the Trustee. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Trustee may:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
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(y) demand payment of all amounts due thereunder that
such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter
on deposit in the Investment Account.
(b) (i) All income and gain realized from the
investment of funds deposited in the Collection Account, the Simple Interest
Excess Sub-Account and the Distribution Account held by or on behalf of the
Servicer, shall be for the benefit of the Servicer and shall be subject to its
withdrawal in the manner set forth in Section 3.11 in the case of income in the
Collection Account or the Simple Interest Excess Sub-Account, and on each
Distribution Date, the Trustee shall withdraw from the Distribution Account, and
remit to the Servicer all amounts in respect of such income and gain in the
Distribution Account. Whether in regard to the Collection Account, the Simple
Interest Excess Sub-Account or the Distribution Account, the Servicer shall
deposit in the Collection Account, the Simple Interest Excess Sub-Account or the
Distribution Account, as applicable, the amount of any loss of principal
incurred in respect of any such Permitted Investment made with funds in such
accounts immediately upon realization of such loss.
(ii) All income and gain realized from the
investment of funds deposited in the Pre-Funding Account and the
Capitalized Interest Account held by or on behalf of the Unaffiliated
Seller shall be retained in such Investment Account, subject to
withdrawal as provided in Section 4.02. Whether in regard to the
Pre-Funding Account or the Capitalized Interest Account, the
Unaffiliated Seller shall deposit in the Pre-Funding Account or the
Capitalized Interest Account, as applicable, the amount of any loss of
principal incurred in respect of any such Permitted Investment made
with funds in such accounts immediately upon realization of such loss.
(c) Except as otherwise expressly provided in this
Agreement, if any default occurs in the making of a payment due under any
Permitted Investment, or if a default occurs in any other performance required
under any Permitted Investment, the Trustee shall take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings. The Trustee shall not be liable for
the amount of any loss incurred in respect of any investment or lack of
investment of funds held in any Investment Account or the Distribution Account
if made in accordance with this Section 3.12.
Section 3.13 MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND
OMISSIONS AND FIDELITY COVERAGE.
(a) The Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (iii) the maximum insurable value of
the improvements which are a part of such Mortgaged Property, in each case in an
amount not less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. The
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the
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outstanding principal balance of the related Mortgage Loan at the time it became
an REO Property, plus accrued interest at the Mortgage Rate and related
Servicing Advances. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11. Any cost incurred by
the Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Trustee, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards and flood
insurance has been made available, the Servicer will cause to be maintained a
flood insurance policy in respect thereof. Such flood insurance shall be in an
amount equal to the lesser of (i) the unpaid principal balance of the related
Mortgage Loan and (ii) the maximum amount of such insurance available for the
related Mortgaged Property under the national flood insurance program (assuming
that the area in which such Mortgaged Property is located is participating in
such program).
In the event that the Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of A:X or better
in Best's (or such other rating that is comparable to such rating) insuring
against hazard losses on all of the Mortgage Loans, it shall conclusively be
deemed to have satisfied its obligations as set forth in the first two sentences
of this Section 3.13, it being understood and agreed that such policy may
contain a deductible clause, in which case the Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property or REO
Property a policy complying with the first two sentences of this Section 3.13,
and there shall have been one or more losses which would have been covered by
such policy, deposit to the Collection Account from its own funds the amount not
otherwise payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of itself, the
Trustee claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) The Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of
the Mortgage Loans, unless the Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall also maintain a
fidelity bond in the form and amount that would meet the requirements of ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac, unless the Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall provide the
Trustee with copies of any such insurance policies and fidelity bond. The
Servicer shall be deemed to have complied with this provision if an Affiliate of
the Servicer has such
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errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Servicer. Any such errors and omissions policy and fidelity bond shall by
its terms not be cancelable without thirty days' prior written notice to the
Trustee. The Servicer shall also cause each Subservicer to maintain a policy of
insurance covering errors and omissions and a fidelity bond which would meet
such requirements.
Section 3.14 ENFORCEMENT OF DUE-ON-SALE CLAUSES ASSUMPTION
AGREEMENTS.
The Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; PROVIDED, HOWEVER,
that the Servicer shall not be required to take such action if, in its sole
business judgment, the Servicer believes it is not in the best interests of the
Trust Fund and shall not exercise any such rights if prohibited by law from
doing so. If the Servicer reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause or if any of the other conditions set forth
in the proviso to the preceding sentence apply, the Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note, provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Servicer, has a credit risk rating at
least equal to that of the original Mortgagor. In connection with any
assumption, modification or substitution, the Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Servicer shall not take or enter
into any assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Servicer in respect of an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including, but not limited to, the related Mortgage Rate and the
amount of the Scheduled Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Trustee
that any such substitution, modification or assumption agreement has been
completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its
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obligations hereunder by reason of any assumption of a Mortgage Loan by
operation of law or by the terms of the Mortgage Note or any assumption which
the Servicer may be restricted by law from preventing, for any reason whatever.
For purposes of this Section 3.14, the term "assumption" is deemed to also
include a sale (of the Mortgaged Property) subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.
Section 3.15 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
The Servicer shall use its best efforts, consistent with
customary servicing practices as described in Section 3.01, to foreclose upon or
otherwise comparably convert (which may include an acquisition of REO Property)
the ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.07, and which are not
released from this Agreement pursuant to any other provision hereof. The
Servicer shall use reasonable efforts to realize upon such defaulted Mortgage
Loans in such manner as will maximize the receipt of principal and interest by
the Trustee, taking into account, among other things, the timing of foreclosure
proceedings. The foregoing is subject to the provisions that, in any case in
which Mortgaged Property shall have suffered damage from an uninsured cause, the
Servicer shall not be required to expend its own funds toward the restoration of
such property unless it shall determine in its sole discretion (i) that such
restoration will increase the net proceeds of liquidation of the related
Mortgage Loan to the Trustee, after reimbursement to itself for such expenses,
and (ii) that such expenses will be recoverable by the Servicer through
Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property,
as contemplated in Section 3.11. The Servicer shall be responsible for all other
costs and expenses incurred by it in any such proceedings; PROVIDED, HOWEVER,
that it shall be entitled to reimbursement thereof from the related property, as
contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as
any recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds or any income from an REO Property, will be applied in the
following order of priority: first, to reimburse the Servicer or any Subservicer
for any related unreimbursed Servicing Advances, pursuant to Section 3.11 or
3.17; second, to accrued and unpaid interest on the Mortgage Loan or REO Imputed
Interest, at the Mortgage Rate, to the date of the liquidation or REO
Disposition, or to the Due Date prior to the Remittance Date on which such
amounts are to be distributed if not in connection with a liquidation or REO
Disposition; third, to reimburse the Servicer for any related ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇
Advances, pursuant to Section 3.11; and fourth, as a recovery of principal of
the Mortgage Loan. If the amount of the recovery so allocated to interest is
less than a full recovery thereof, that amount will be allocated as follows:
first, to unpaid Servicing Fees; and second, as interest at the Mortgage Rate
(net of the Servicing Fee Rate). The portion of the recovery so allocated to
unpaid Servicing Fees shall be reimbursed to the Servicer or any Subservicer
pursuant to Section 3.11 or 3.17. The portions of the recovery so allocated to
interest at the Mortgage Rate (net of the Servicing Fee Rate) and to principal
of the Mortgage Loan shall be applied as follows: first, to reimburse the
Servicer or any Subservicer for any related unreimbursed Servicing Advances in
accordance with Section 3.11 or 3.17, and second, to the Trustee in accordance
with the provisions of Section 4.02, subject to the last paragraph of Section
3.17 with respect to certain excess recoveries from an REO Disposition.
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Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee with a written report of the
environmental inspection.
After reviewing the environmental inspection report, the
Servicer shall determine how to proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Servicer determines to proceed with foreclosure or acceptance of a
deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable
costs associated with such foreclosure or acceptance of a deed in lieu of
foreclosure and any related environmental clean-up costs, as applicable, from
the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Servicer, the Servicer shall be entitled to
be reimbursed from amounts in the Collection Account pursuant to Section 3.11
hereof. In the event the Servicer determines not to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
from general collections for all Servicing Advances made with respect to the
related Mortgaged Property from the Collection Account pursuant to Section 3.11
hereof.
Section 3.16 RELEASE OF MORTGAGE FILES.
(a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Servicer will, within five (5)
Business Days of the payment in full, notify the Trustee by a certification
(which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Collection Account pursuant to Section 3.10 have been or
will be so deposited) of a Servicing Officer and shall request delivery to it of
the Custodial File. Upon receipt of such certification and request, the Trustee
shall promptly release the related Custodial File to the Servicer within two (2)
Business Days. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account.
(b) From time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan, including, for this purpose,
collection under any insurance policy relating to the Mortgage Loans, the
Trustee shall, upon request of the Servicer and delivery to the Trustee, of a
Request for Release, release the related Custodial File to the Servicer, and the
Trustee shall, at the direction of the Servicer, execute such documents as shall
be necessary to the prosecution of any such proceedings and the Servicer shall
retain the Mortgage File in trust for the benefit of the Trustee. Such Request
for Release shall obligate the Servicer to return each and every document
previously requested from the Custodial File to the Trustee when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Collection Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
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proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Servicer has delivered to the Trustee a certificate of a
Servicing Officer certifying as to the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the Collection Account have been so deposited, or that such Mortgage Loan
has become an REO Property, a copy of the Request for Release of Documents shall
be released by the Trustee to the Servicer or its designee.
Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Servicer any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 TITLE, CONSERVATION AND DISPOSITION OF REO
PROPERTY.
(a) This Section shall apply only to REO Properties
acquired for the account of the Trustee and shall not apply to any REO Property
relating to a Mortgage Loan which was purchased or repurchased from the Trustee
pursuant to any provision hereof. In the event that title to any such REO
Property is acquired, the deed or certificate of sale shall be issued to the
Servicer, or to its nominee, on behalf of the Trustee.
(b) The Servicer shall manage, conserve, protect and
operate each REO Property for the Trustee solely for the purpose of its prompt
disposition and sale. The Servicer, either itself or through an agent selected
by the Servicer, shall manage, conserve, protect and operate the REO Property in
the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. The Servicer shall
attempt to sell the same (and may temporarily rent the same for a period not
greater than one year, except as otherwise provided below) on such terms and
conditions as the Servicer deems to be in the best interest of the Trustee. The
Servicer shall notify the Trustee from time to time as to the status of each REO
Property.
(c) The Servicer shall use its best efforts to dispose of
the REO Property as soon as possible (subject to the Trustee's right to veto any
proposed sale of REO Property) and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless the
Servicer determines, and gives an appropriate notice to the Trustee to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a
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period longer than one year is permitted under the foregoing sentence and is
necessary to sell any REO Property, the Servicer shall report monthly to the
Trustee as to the progress being made in selling such REO Property.
Notwithstanding its veto rights, the Trustee has no obligation with respect to
REO dispositions.
(d) [Reserved].
(e) The Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall deposit such
funds in the Collection Account.
(f) The Servicer shall deposit net of reimbursement to
the Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11 hereof, or cause to be deposited, on a daily basis
in the Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(g) The Servicer, upon an REO Disposition, shall be
entitled to reimbursement for any related unreimbursed Servicing Advances as
well as any unpaid Servicing Fees from proceeds received in connection with the
REO Disposition, as further provided in Section 3.11.
(h) Any net proceeds which are in excess of the
applicable Stated Principal Balance plus all unpaid REO Imputed Interest thereon
through the date of the REO Disposition shall be retained by the Servicer as
additional servicing compensation.
(i) The Servicer shall use its reasonable best efforts to
sell, or cause the Subservicer to sell, any REO Property as soon as possible,
but in no event later than the conclusion of the third calendar year beginning
after the year of its acquisition by the REMIC unless (i) the Servicer applies
for an extension of such period from the Internal Revenue Service pursuant to
the REMIC Provisions and Code Section 856(e)(3), in which event such REO
Property shall be sold within the applicable extension period, or (ii) the
Servicer obtains for the Trustee an Opinion of Counsel, addressed to the
Depositor, the Trustee and the Servicer, to the effect that the holding by the
REMIC of such REO Property subsequent to such period will not result in the
imposition of taxes on "prohibited transactions" as defined in Section 860F of
the Code or cause the REMIC to fail to qualify as a REMIC under the REMIC
Provisions or comparable provisions of relevant state laws at any time. The
Servicer shall manage, conserve, protect and operate each REO Property for the
Trustee solely for the purpose of its prompt disposition and sale in a manner
which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) or result in the receipt by
the REMIC of any "income from non-permitted assets" within the meaning of
Section 860F(a)(2)(B) of the Code or any "net income from foreclosure property"
which is subject to taxation under Section 860G(a)(1) of the Code. Pursuant to
its efforts to sell such REO Property, the Servicer shall either itself or
through an agent selected by the Servicer protect and conserve such REO Property
in the same manner and to such extent as is customary in the locality where such
REO Property is located and may, incident to its conservation and protection of
the interests of the Trustee on behalf of the Certificateholders, rent the same,
or any part thereof, as the Servicer
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deems to be in the best interest of the Trustee on behalf of the
Certificateholders for the period prior to the sale of such REO Property;
provided, however, that any rent received or accrued with respect to such REO
Property qualifies as "rents from real property" as defined in Section 856(d) of
the Code.
Section 3.18 NOTIFICATION OF ADJUSTMENTS.
With respect to each Adjustable Rate Mortgage Loan, the
Servicer shall adjust the Mortgage Rate on the related Interest Rate Adjustment
Date and shall adjust the Scheduled Payment on the related mortgage payment
adjustment date, if applicable, in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. The Servicer shall
execute and deliver any and all necessary notices required under applicable law
and the terms of the related Mortgage Note and Mortgage regarding the Mortgage
Rate and Scheduled Payment adjustments. The Servicer shall promptly, upon
written request therefor, deliver to the Trustee such notifications and any
additional applicable data regarding such adjustments and the methods used to
calculate and implement such adjustments. Upon the discovery by the Servicer or
the receipt of notice from the Trustee that the Servicer has failed to adjust a
Mortgage Rate or Scheduled Payment in accordance with the terms of the related
Mortgage Note, the Servicer shall deposit in the Collection Account from its own
funds the amount of any interest loss caused as such interest loss occurs.
Section 3.19 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE MORTGAGE LOANS.
The Servicer shall provide, or cause the Subservicer to
provide, to the Depositor, the Unaffiliated Seller, the Class A Certificate
Insurer, the Trustee, the OTS or the FDIC and the examiners and supervisory
agents thereof access to the documentation regarding the Mortgage Loans in its
possession. Such access shall be afforded without charge, but only upon
reasonable and prior written request and during normal business hours at the
offices of the Servicer or any Subservicer. Nothing in this Section shall
derogate from the obligation of any such party to observe any applicable law
prohibiting disclosure of information regarding the Mortgagors and the failure
of any such party to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
Section 3.20 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF
THE SERVICER TO BE HELD FOR THE TRUSTEE.
The Servicer shall account fully to the Trustee for any funds
received by the Servicer or which otherwise are collected by the Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan. All
Mortgage Files and funds collected or held by, or under the control of, the
Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including but not
limited to, any funds on deposit in the Collection Account, shall be held by the
Servicer for and on behalf of the Trustee and shall be and remain the sole and
exclusive property of the Trustee, subject to the applicable provisions of this
Agreement. The Servicer also agrees that it shall not create, incur or subject
any Mortgage File or any funds that are deposited in any Account, or any funds
that otherwise are or may become due or payable to the Trustee for the benefit
of the
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Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage File or any funds collected on, or
in connection with, a Mortgage Loan, except, however, that the Servicer shall be
entitled to set off against and deduct from any such funds any amounts that are
properly due and payable to the Servicer under this Agreement.
Section 3.21 SERVICING COMPENSATION.
(a) As compensation for its activities hereunder, the
Servicer shall, with respect to each Mortgage Loan, be entitled to retain from
deposits to the Collection Account and from Liquidation Proceeds, Insurance
Proceeds and REO Proceeds related to such Mortgage Loan, the Servicing Fee with
respect to each Mortgage Loan (less any portion of such amounts retained by any
Subservicer). In addition, the Servicer shall be entitled to recover unpaid
Servicing Fees out of related late collections to the extent permitted in
Section 3.11. The right to receive the Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement; PROVIDED, HOWEVER, that
the Servicer may pay from the Servicing Fee any amounts due to a Subservicer
pursuant to a Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of
assumption or modification fees, late payment charges, NSF fees, reconveyance
fees and other similar fees and charges (other than Prepayment Charges) shall be
retained by the Servicer only to the extent such fees or charges are received by
the Servicer. The Servicer shall also be entitled pursuant to Section
3.11(a)(iv) to withdraw from the Collection Account and the Distribution
Account, as additional servicing compensation, interest or other income earned
on deposits therein.
(c) The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder (including
payment of premiums for any blanket policy insuring against hazard losses
pursuant to Section 3.13, servicing compensation of the Subservicer to the
extent not retained by it and the fees and expenses of independent accountants
and any agents appointed by the Servicer), and shall not be entitled to
reimbursement therefor except as specifically provided in Section 3.11.
Section 3.22 ANNUAL STATEMENT AS TO COMPLIANCE.
The Servicer will deliver or cause to be delivered to the
Depositor, the Rating Agencies, the Unaffiliated Seller, the Class A Certificate
Insurer, and the Trustee on or before April 15 of each calendar year, commencing
in 2003, an Officers' Certificate stating, as to each signatory thereof, that
(i) a review of the activities of the Servicer during the preceding calendar
year and of performance under this Agreement or a similar agreement has been
made under such officers' supervision, and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officers and the nature and status thereof.
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Section 3.23 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
STATEMENT; FINANCIAL STATEMENTS.
Not later than April 15th of each calendar year commencing in
2003, the Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Depositor, the
Unaffiliated Seller, the Class A Certificate Insurer, the Rating Agencies and
the Trustee a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Servicer which includes an
assertion that the Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by
Subservicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Subservicers.
Section 3.24 TRUSTEE TO ACT AS SERVICER.
In the event that the Servicer shall for any reason no longer
be the Servicer hereunder (including by reason of an Event of Default), the
Trustee or its successor shall thereupon assume all of the rights and
obligations of the Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of the Servicer pursuant to Section
3.10 or any acts or omissions of the predecessor Servicer hereunder, (ii)
obligated to make Advances if it is prohibited from doing so by applicable law,
(iii) obligated to effectuate repurchases or substitutions of Mortgage Loans
hereunder, including but not limited to repurchases or substitutions pursuant to
Section 2.03, (iv) responsible for expenses of the Servicer pursuant to Section
2.03 or (v) deemed to have made any representations and warranties of the
Servicer hereunder). Any such assumption shall be subject to Section 7.02.
Every subservicing agreement entered into by the Servicer
shall contain a provision giving the successor Servicer the option to terminate
such agreement in the event a successor Servicer is appointed.
If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any subservicing agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession.
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The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement (if any) and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
Section 3.25 COMPENSATING INTEREST.
The Servicer shall remit to the Trustee on each Remittance
Date an amount from its own funds equal to the lesser of (a) the Prepayment
Interest Shortfall, if any, for such Remittance Date, and (b) the amount of the
Servicing Fee payable to the Servicer for such Remittance Date.
Section 3.26 CREDIT REPORTING; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ACT.
(a) The Servicer agrees to accurately and fully report
its borrower credit files with respect to the Mortgage Loans to all three credit
repositories in a timely manner.
(b) The Servicer shall comply with Title V of the
▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans and the related borrowers and shall
provide all required notices thereunder.
Section 3.27 ADVANCE FACILITIES.
With the prior written consent of the Class A Certificate
Insurer, the Servicer is hereby authorized to enter into a financing or other
facility (an "ADVANCE FACILITY") under which (l) the Servicer sells, assigns or
pledges to another Person (an "ADVANCING PERSON") the Servicer's rights under
this Agreement to be reimbursed for any Advances and/or (2) an Advancing Person
agrees to fund some or all P&I Advances or Servicing Advances required to be
made by the Servicer pursuant to this Agreement. Except as provided in the
preceding sentence, no consent of any party is required before the Servicer may
enter into an Advance Facility. Notwithstanding the existence of any Advance
Facility under which an Advancing Person agrees to fund P&I Advances and/or
Servicing Advances on the Servicer's behalf, the Servicer shall remain obligated
pursuant to this Agreement to make P&I Advances and Servicing Advances pursuant
to and as required by this Agreement, and shall not be relieved of such
obligations by virtue of such Advance Facility.
Reimbursement amounts ("ADVANCE REIMBURSEMENT AMOUNTS") shall
consist solely of amounts in respect of P&I Advances and/or Servicing Advances
made with respect to the Mortgage Loans for which the Servicer would be
permitted to reimburse itself in accordance with this Agreement, assuming the
Servicer had made the related P&I Advance(s) and/or Servicing Advance(s).
The Servicer shall maintain and provide to any successor
Servicer a detailed accounting on a loan-by-loan basis as to amounts advanced
by, pledged or assigned to, and reimbursed to any Advancing Person. The
successor Servicer shall be entitled to rely on any such information provided by
the predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
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An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall
require that Advance Reimbursement Amounts distributed with respect to each
Mortgage Loan be allocated to outstanding ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing
Advances (as the case may be) made with respect to that Mortgage Loan on a
"first-in, first out" (FIFO) basis. Such documentation shall also require the
Servicer to provide to the related Advancing Person or its designee loan-by-loan
information with respect to each Advance Reimbursement Amount distributed to
such Advancing Person or to a trustee or custodian (an "ADVANCE FACILITY
TRUSTEE") on each Distribution Date, to enable the Advancing Person or Advance
Facility Trustee to make the FIFO allocation of each Advance Reimbursement
Amount with respect to each Mortgage Loan. The Servicer shall remain entitled to
be reimbursed pursuant to the Advance Facility by the Advancing Person or
Advance Facility Trustee for all P&I Advances and Servicing Advances funded by
the Servicer to the extent the related rights to be reimbursed therefor have not
been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 3.27 or to any other provision
of this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 3.27, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, the Unaffiliated Seller and the Servicer
without the consent of any Certificateholder, but with the consent of the Class
A Certificate Insurer, notwithstanding anything to the contrary in this
Agreement. Prior to entering into an Advance Facility, the Servicer shall notify
the lender under such facility in writing that: (a) the Advances financed by
and/or pledged to the lender are obligations owed to the Servicer on a
non-recourse basis payable only from the cash flows and proceeds received under
this Agreement for reimbursement of such Advances only to the extent provided
herein, and the Trustee is not otherwise obligated or liable to repay any
Advances financed by the lender; (b) the Servicer will be responsible for
remitting to the lender the applicable amounts collected by it as reimbursement
for Advances funded by the lender, subject to the restrictions and priorities
created in this Agreement; (c) the Trustee shall not have any responsibility to
track or monitor the administration of the financing arrangement between the
Servicer and the lender; (d) if the Servicer is replaced by a successor
servicer, the lender shall continue to be entitled to receive reimbursements as
provided in clause (a) above but shall have no further right to make advances
with respect to the transaction subject to this Agreement; and (e) (i) the
pledge, if any, of Servicer's rights to the lender under the facility conveys no
rights (such as a right to fees after the removal of the Servicer or the right
to become a substitute servicer) under this Agreement, or against the Trust
Fund, any investor in or guarantor of securities issued hereunder, or any person
other than the Servicer, (ii) the Servicer is only pledging assets and rights
that it owns and any purported pledge of any assets or rights that are not
property of the Servicer shall be of force and effect and will not be deemed to
create any additional rights or assets of either the lender or the Servicer and
(iii) the lender shall take such steps as are reasonably necessary to confirm to
a successor servicer that it has no rights in any collateral due or payable on
or after the date of servicing transfer other than the Servicer's rights to
reimbursement of Advances (to be repaid pursuant to the terms of this Agreement)
for Advances made prior to such servicing transfer.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 ADVANCES.
(a) The amount of P&I Advances to be made by the Servicer
for any Remittance Date shall equal, subject to Section 4.01(c), the sum of (i)
(a) with respect to the Mortgage Loans, other than Simple Interest Mortgage
Loans, the aggregate amount of Scheduled Payments (with each interest portion
thereof net of the related Servicing Fee), due on the Due Date immediately
preceding such Remittance Date in respect of such Mortgage Loans, and (b) with
respect to the Simple Interest Mortgage Loans, 30 days' interest on each such
Mortgage Loan (net of the related Servicing Fee), which Scheduled Payments or
interest payment, as applicable, were not received as of the close of business
on the last Business Day of the immediately preceding calendar month, plus (ii)
with respect to each REO Property, which REO Property was acquired during or
prior to the related Prepayment Period and as to which such REO Property an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the Scheduled Payments (with each interest portion
thereof net of the related Servicing Fee) (or with respect to an REO Property
related to a Simple Interest Mortgage Loan, 30 days' interest thereon net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Collection Account for distribution on such
Remittance Date.
(b) On the Remittance Date, the Servicer shall remit in
immediately available funds to the Trustee an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties for the related Remittance Date either (i) from its own funds,
(ii) with respect to Simple Interest Mortgage Loans, from the Simple Interest
Sub-Account, in accordance with Section 3.10(b), or (iii) from the Collection
Account, to the extent of funds held therein for future distribution (in which
case, it will cause to be made an appropriate entry in the records of Collection
Account that Amounts Held For Future Distribution have been, as permitted by
this Section 4.01, used by the Servicer in discharge of any such P&I Advance) or
(iv) in the form of any combination of (i), (ii) and (iii) aggregating the total
amount of P&I Advances to be made by the Servicer with respect to the Mortgage
Loans and REO Properties. Any Amounts Held For Future Distribution and so used
shall be appropriately reflected in the Servicer's records and replaced by the
Servicer by deposit in the Collection Account on or before any future Remittance
Date to the extent required.
(c) The obligation of the Servicer to make such P&I
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no
P&I Advance
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or Servicing Advance shall be required to be made hereunder by the Servicer if
such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Advance. The determination by the
Servicer that it has made a Nonrecoverable P&I Advance or a Nonrecoverable
Advance or that any proposed P&I Advance or Servicing Advance, if made, would
constitute a Nonrecoverable P&I Advance or a Nonrecoverable Advance,
respectively, shall be evidenced by an Officers' Certificate of the Servicer
delivered to the Trustee.
(e) Except as otherwise provided herein, the Servicer
shall be entitled to reimbursement pursuant to Section 3.11 hereof for Servicing
Advances from recoveries from the related Mortgagor or from all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds and
Condemnation Proceeds) with respect to the related Mortgage Loan.
Section 4.02 PRIORITIES OF DISTRIBUTION.
(a) On each Distribution Date, the Trustee will make the
disbursements and transfers from amounts then on deposit in the Distribution
Account in the following order of priority:
(i) (x) from the Interest Amount Available, to
the Class A Certificate Insurer, the Premium Amount and to the Trustee
the Trustee Fee, in each case for such Distribution Date; to the
holders of each Class of Certificates, in the following order of
priority:
(y) from the remaining Interest Amount
Available, plus in the case of clause (a) below, the related portion of
any Insured Payment,
(a) to the Class A Certificates, the Accrued
Certificate Interest Distribution Amount for such Class and
any Unpaid Interest Amounts for such Class for such
Distribution Date, as described in Section 4.02(a);
(b) to the Class A Certificate Insurer, the
amount of any Reimbursement Amount then owing to it on account
of a prior drawing relating to interest on the Class A
Certificates;
(c) to the Class M Certificates, the Accrued
Certificate Interest Distribution Amount for such Class on
such Distribution Date;
(d) to the Class B Certificates, the Accrued
Certificate Interest Distribution Amount for such Class on
such Distribution Date;
(ii) (A) on each Distribution Date (1)
before the Stepdown Date or (2) with respect to which a Trigger Event
is in effect, to the holders of the related Class or Classes of Offered
Certificates then entitled to distributions of principal as set forth
below, from the amounts remaining on deposit in the Distribution
Account after making distributions pursuant to clause (i) above, an
amount equal to the Principal Distribution Amount in the following
order of priority:
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(a) to the Class A Certificates, until the Class
Certificate Balance thereof is reduced to zero;
(b) to the Class A Certificate Insurer, the
amount of any Reimbursement Amount then owing to it on account
of a prior drawing relating to principal on the Class A
Certificates; and
(c) sequentially to the Class M and Class B
Certificates, in that order, until the respective Class
Certificate Balances are reduced to zero;
(B) on each Distribution Date (1) on
and after the Stepdown Date and (2) as long as a Trigger Event is not in effect,
to the holders of the related Class or Classes of Offered Certificates then
entitled to distribution of principal, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i) above, an
amount equal to, in the aggregate, the Principal Distribution Amount in the
following amounts and order of priority:
(a) the lesser of (x) the Principal Distribution
Amount and (y) the Class A Principal Distribution Amount to
the Class A Certificates, until the Class Certificate Balance
thereof is reduced to zero;
(b) the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the amount distributed
to the Class A Certificateholders in clause (ii)(B)(a) above
and (y) the amount of any Reimbursement Amount then owing to
the Class A Certificate Insurer on account of a prior drawing
relating to principal on the Class A Certificates;
(c) the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the amount distributed
to the Class A Certificateholders in clause (ii)(B)(a) above
and to the Class A Certificate Insurer in clause (ii)(B)(b)
above and (y) the Class M Principal Distribution Amount to the
Class M Certificateholders, until the Class Certificate
Balance thereof has been reduced to zero;
(d) the lesser of (x) the excess of (i) the
Principal Distribution Amount over (ii) the amount distributed
to the Class A Certificateholders in clause (ii)(B)(a) above,
to the Class A Certificate Insurer in clause (ii)(B)(b) above,
and to the Class M Certificates in clause (ii)(B)(c) above and
(y) the Class B Principal Distribution Amount to the Class B
Certificateholders, until the Class Certificate Balance
thereof has been reduced to zero;
(iii) any amount remaining in the Distribution
Account after the distributions in clauses (i) and (ii) above, plus as
specifically indicated below, from amounts on deposit in the Excess
Reserve Fund Account, shall be distributed in the following order of
priority:
(a) to the Class A Certificate Insurer, to the
extent of any remaining Reimbursement Amount then owing to it;
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(b) to the holders of the Class M Certificates,
any Unpaid Interest Amounts for such Class;
(c) to the holders of the Class M Certificates,
any Unpaid Realized Loss Amount for such Class;
(d) to the holders of the Class B Certificates,
any Unpaid Interest Amounts for such Class;
(e) to the holders of the Class B Certificates,
any Unpaid Realized Loss Amount for such Class;
(f) to the Excess Reserve Fund Account, the
amount of any Basis Risk Payment for such Distribution Date;
(g) from amounts on deposit in the Excess
Reserve Fund Account, an amount equal to any Basis Risk
CarryForward Amount with respect to any Floating Rate
Certificate for such Distribution Date to the Floating Rate
Certificates in the same order and priority in which Accrued
Certificate Interest Distribution Amount is allocated among
those Classes of Certificates;
(h) to the holders of the Class X Certificates,
the remainder of the Class X Distributable Amount not
distributed pursuant to Sections 4.02(a)(iii)(a)-(g); and
(iv) to the holders of the Class R Certificates,
any remaining amount.
(b) On each Distribution Date, all amounts representing
Prepayment Charges from the Mortgage Loans received during the related
Prepayment Period will be distributed to the holders of the Class P
Certificates.
(c) On the May 2002, June 2002 and July 2002 Distribution
Dates, the Trustee shall transfer from the Capitalized Interest Account to the
Distribution Account the Capitalized Interest Requirement, if any, for such
Distribution Date.
(d) On the Distribution Date following either the final
Subsequent Transfer Date or July 24, 2002 whichever date is earlier, any amounts
remaining in the Capitalized Interest Account, after taking into account the
transfers in respect of the Distribution Date described in clause (c) above,
shall be paid to the Unaffiliated Seller.
(e) On each Subsequent Transfer Date, the Unaffiliated
Seller shall instruct in writing the Trustee to withdraw from the Pre-Funding
Account an amount equal to 100% of the aggregate Stated Principal Balances as of
the related Subsequent Cut-off Date of the Subsequent Mortgage Loans sold to the
Trust Fund on such Subsequent Transfer Date and pay such amount to or upon the
order of the Unaffiliated Seller upon satisfaction of the conditions set forth
in Section 2.01(c) hereof with respect to such transfer. The Trustee may
conclusively rely on such written instructions from the Unaffiliated Seller.
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(f) If the Pre-Funding Amount (exclusive of Pre-Funding
Earnings) has been reduced to $100,000 or less by the close of business on June
1, 2002 then, on the June 25, 2002 Distribution Date, after giving effect to any
reductions in the Pre-Funding Amount on such date, the Trustee shall withdraw
from the Pre-Funding Account on such date and deposit in the Distribution
Account the amount on deposit in the Pre-Funding Account other than any
Pre-Funding Earnings; if the Pre-Funding Amount has not been reduced to zero by
the close of business on July 24, 2002, the Trustee shall withdraw from the
Pre-Funding Account the amount on deposit therein, other than the Pre-Funding
Earnings, and deposit such amount on the July 25, 2002 Distribution Date into
the Distribution Account. Each amount so deposited to the Distribution Account
pursuant to the preceding sentence shall be distributed to the Holders of the
Offered Certificates, PRO RATA, based on their relative Class Certificate
Balances immediately prior to the related Distribution Date, as a separate
payment of principal, on the related Distribution Date.
(g) On the May 25, June 25 and July 25 2002 Distribution
Dates, the Trustee shall transfer from the Pre-Funding Account to the
Distribution Account the Pre-Funding Earnings, if any, applicable to each such
date.
(h) On any Distribution Date, any Relief Act Shortfalls
and Net Prepayment Interest Shortfalls for such Distribution Date will be
allocated as a reduction in the following order:
(1) First, to the amount of interest payable to
the Class X Certificates; and
(2) Second, pro rata, as a reduction of the
Accrued Certificate Interest Distribution
Amount for the Class A, Class M and Class B
Certificates, based on the amount of
interest to which such classes would
otherwise be entitled.
Section 4.03 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.
(a) Not later than each Distribution Date, the Trustee
shall make available to each Certificateholder, the Servicer, the Depositor, the
Unaffiliated Seller, the Class A Certificate Insurer and each Rating Agency a
statement setting forth with respect to the related distribution:
(i) the amount thereof allocable to principal,
separately identifying the aggregate amount of any Principal
Prepayments and Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest,
any Unpaid Interest Amounts included in such distribution and any
remaining Unpaid Interest Amounts after giving effect to such
distribution, any Basis Risk CarryForward Amount for such Distribution
Date and the amount of all Basis Risk CarryForward Amount covered by
withdrawals from the Excess Reserve Fund Account on such Distribution
Date;
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(iii) if the distribution to the Holders of such
Class of Certificates is less than the full amount that would be
distributable to such Holders if there were sufficient funds available
therefor, the amount of the shortfall and the allocation thereof as
between principal and interest, including any Basis Risk CarryForward
Amount not covered by amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class
of Certificates after giving effect to the distribution of principal on
such Distribution Date;
(v) the Pool Stated Principal Balance for the
following Distribution Date;
(vi) the amount of the Servicing Fees paid to or
retained by the Servicer or Subservicer (with respect to the
Subservicers, in the aggregate) with respect to such Distribution Date;
(vii) the Pass-Through Rate for each such Class of
Certificates with respect to such Distribution Date;
(viii) the amount of Advances included in the
distribution on such Distribution Date and the aggregate amount of
Advances reported by the servicer as outstanding as of the close of
business on such Distribution Date;
(ix) the number and aggregate Scheduled Principal
Balances of Mortgage Loans (1) as to which the Scheduled Payment is
delinquent 1 to 30 days, 31 to 59 days, 60 to 89 days and 90 or more
days, (2) as to which the Scheduled Payment is delinquent 31 to 60
days, 61 to 90 days and 91 or more days, (3) that have become REO
Property, (4) that are in foreclosure and (5) that are in bankruptcy,
in each case as of the close of business on the last Business Day of
the immediately preceding month;
(x) For each of the preceding 12 calendar
months, or all calendar months since the related Cut-off Date,
whichever is less, the aggregate dollar amount of the Scheduled
Payments (A) due on all Outstanding Mortgage Loans on each of the Due
Dates in each such month and (B) delinquent 60 days or more on each of
the Due Dates in each such month;
(xi) with respect to any Mortgage Loan that
became an REO Property during the preceding calendar month, the loan
number and Stated Principal Balance of such Mortgage Loan as of the
close of business on the Determination Date preceding such Distribution
Date and the date of acquisition thereof;
(xii) the total number and principal balance of
any REO Properties (and market value, if available) as of the close of
business on the Determination Date preceding such Distribution Date;
(xiii) whether a Trigger Event has occurred and is
continuing (including the calculation of thereof and the aggregate
outstanding balance of all 60+ Day Delinquent Loans)
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(xiv) the amount on deposit in the Excess Reserve
Fund Account (after giving effect to distributions on such Distribution
Date);
(xv) the aggregate amount of Applied Realized
Loss Amounts incurred during the preceding calendar month and aggregate
Applied Realized Loss Amounts through such Distribution Date;
(xvi) the amount of any Net Monthly Excess Cash
Flow on such Distribution Date and the allocation thereof to the
Certificateholders with respect to Applied Realized Losses and Unpaid
Interest Amounts;
(xvii) the Subordinated Amount and Required
Subordinated Amount;
(xviii) the Interest Remittance Amount, the
Principal Remittance Amount and the Prepayment Charges remitted by
Servicer with respect to that Distribution Date;
(xix) the Pre-Funded Amount as of the end of the
prior Due Period;
(xx) the amount of any principal prepayment on
the Certificates resulting from the application of unused Pre-Funding
Account moneys;
(xxi) the Class A Deficiency Amount and the
Insured Payment for such Distribution Date;
(xxii) the Reimbursement Amount immediately prior
to such Distribution Date, and the amount of any payments to the Class
A Certificate Insurer on account thereof on such Distribution Date; and
(xxiii) with respect to the Superior Mortgage Loans
only, as identified in each Mortgage Loan Schedule, (a) the total
number and aggregate Scheduled Principal Balances of the Superior
Mortgage Loans, (b) the number and aggregate Scheduled Principal
Balances of Superior Mortgage Loans (1) as to which the Scheduled
Payment is delinquent 1 to 30 days, 31 to 59 days, 60 to 89 days and 90
or more days, (2) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (3) that have become REO
Property, (4) that are in foreclosure and (5) that are in bankruptcy,
in each case as of the close of business on the last Business Day of
the immediately preceding month, (c) the loan number, Scheduled
Principal Balance and FDIC Guaranty Termination Date of each Superior
Mortgage Loan not yet repurchased by Superior for which the Trustee has
submitted a repurchase notice pursuant to Section 2.03(d) and (d) (i)
the amounts paid by the FDIC under the FDIC Guaranty for that Due
Period and (ii) the aggregate amount of claims paid by the FDIC under
the FDIC Guaranty.
(b) The Trustee's responsibility for providing the above
statement is limited to the availability, timeliness and accuracy of the
information derived from the Servicer or, in the case of the Reimbursement
Amount, from the Class A Certificate Insurer or, in the case of the FDIC
Guaranty, from information otherwise received by the Trustee. The Trustee will
provide the above statement via the Trustee's internet website, except that the
Trustee shall deliver a hard
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copy of such statement to the Class A Certificate Insurer on each Distribution
Date. The Trustee's website will initially be located at
http:\\▇▇▇-▇▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇-▇▇▇▇.▇▇▇\invr and assistance in using the website
can be obtained by calling the Trustee's investor relations desk at
▇-▇▇▇-▇▇▇-▇▇▇▇. A paper copy of the statement will also be made available upon
request.
(c) Within a reasonable period of time after the end of
each calendar year, the Trustee shall cause to be furnished to each Person who
at any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of
this Section 4.03 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
(d) Not later than the Determination Date, the Servicer
shall furnish to the Trustee a monthly remittance advice statement containing
such information as shall be reasonably requested by the Trustee to provide the
reports required by Section 4.03(a) as to the accompanying remittance and the
period ending on the close of business on the last Business Day of the
immediately preceding month.
The Servicer shall furnish to the Trustee an individual loan
accounting report, as of the last Business Day of each month, to document
Mortgage Loan payment activity on an individual Mortgage Loan basis. With
respect to each month, the corresponding individual loan accounting report (in
electronic format) shall be received by the Trustee no later than the related
Determination Date, which report shall contain the following:
(i) with respect to each Scheduled Payment, the
amount of such remittance allocable to principal (including a separate
breakdown of any Principal Prepayment, including the date of such
prepayment, and any prepayment penalties or premiums, along with a
detailed report of interest on principal prepayment amounts remitted in
accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the
amount of such remittance allocable to interest and assumption fees;
(iii) the amount of servicing compensation
received by the Servicer during the prior distribution period;
(iv) the individual and aggregate Stated
Principal Balance of the Mortgage Loans;
(v) the individual and aggregate Scheduled
Principal Balances of the Mortgage Loans;
(vi) the aggregate of any expenses reimbursed to
the Servicer during the prior distribution period pursuant to Section
3.05; and
(vii) the number and aggregate outstanding
principal balances of Mortgage Loans (a) delinquent (1) 30 to 59 days,
(2) 60 to 89 days, (3) 90 days or more;
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(b) as to which foreclosure has commenced; and (c) as to which REO
Property has been acquired.
Section 4.04 CERTAIN MATTERS RELATING TO THE DETERMINATION OF
LIBOR.
Until all of the LIBOR Certificates are paid in full, the
Trustee will at all times retain at least four Reference Banks for the purpose
of determining LIBOR with respect to each Interest Determination Date. The
Servicer initially shall designate the Reference Banks. Each "REFERENCE BANK"
shall be a leading bank engaged in transactions in Eurodollar deposits in the
international Eurocurrency market, shall not control, be controlled by, or be
under common control with, the Trustee and shall have an established place of
business in London. If any such Reference Bank should be unwilling or unable to
act as such or if the Servicer should terminate its appointment as Reference
Bank, the Servicer shall promptly appoint or cause to be appointed another
Reference Bank. The Trustee shall have no liability or responsibility to any
Person for (i) the selection of any Reference Bank for purposes of determining
LIBOR or (ii) any inability to retain at least four Reference Banks which is
caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for
each Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement. The Trustee shall not have any liability or
responsibility to any Person for its inability, following a good-faith
reasonable effort, to obtain quotations from the Reference Banks or to determine
the arithmetic mean referred to in the definition of LIBOR, all as provided for
in this Section 4.04 and the definition of LIBOR. The establishment of LIBOR and
each Pass-Through Rate for the LIBOR Certificates by the Trustee shall (in the
absence of manifest error) be final, conclusive and binding upon each Holder of
a Certificate and the Trustee.
Section 4.05 THE CLASS A INSURANCE POLICY.
(a) Within two (2) days following each Remittance Date,
the Trustee shall determine with respect to the immediately following
Distribution Date, the amount to be on deposit in the Distribution Account on
such Distribution Date as a result of the (i) Servicer's remittance of the
Interest Remittance Amount and the Principal Remittance Amount on the related
Remittance Date, and (ii) any transfers to the Distribution Account made from
the Capitalized Interest Account and/or the Pre-Funding Account relating to such
Distribution Date pursuant to Section 4.02 hereof, excluding the amount of any
Insured Payment.
(b) If on any Distribution Date there is a Class A
Deficiency, the Trustee shall complete a Notice in the form of Exhibit A to the
Class A Insurance Policy and submit such notice to the Class A Certificate
Insurer no later than 12:00 noon New York City time on the second Business Day
preceding such Distribution Date as a claim for an Insured Payment in an amount
equal to such Class A Deficiency.
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(c) The Trustee shall establish a separate Eligible
Account for the benefit of Holders of the Class A Certificates and the Class A
Certificate Insurer referred to herein as the "Class A Insurance Payment
Account" over which the Trustee shall have exclusive control and sole right of
withdrawal. The Trustee shall deposit upon receipt any amount paid under the
Class A Insurance Policy in the Insurance Payment Account and distribute such
amount only for purposes of payment to the Class A Certificateholders of the
Class A Insured Amount and such amount may not be applied to satisfy any costs,
expenses or liabilities of the Servicer, the Trustee or the Trust Fund. Amounts
paid under the Class A Insurance Policy, to the extent needed to pay the Class A
Insured Amount shall be transferred to the Distribution Account on the related
Distribution Date and disbursed by the Class A Trustee to the Class A
Certificateholders in accordance with Section 4.02. It shall not be necessary
for such payments to be made by checks or wire transfers separate from the
checks or wire transfers used to pay other distributions to the Class A
Certificateholders with other funds available to make such payment. However, the
amount of any payment of principal or of interest on the Class A Certificates to
be paid from funds transferred from the Class A Insurance Payment Account shall
be noted as provided in paragraph (d) below in the Certificate Register and in
the statement to be furnished to Holders of the Class A Certificates pursuant to
Section 4.03(a). Funds held in the Class A Insurance Payment Account shall not
be invested. Any funds remaining in the Class A Insurance Payment Account on the
first Business Day following a Distribution Date shall be returned to the Class
A Certificate Insurer pursuant to the written instructions of the Class A
Certificate Insurer by the end of such Business Day.
(d) The Trustee shall keep a complete and accurate record
of the amount of interest and principal paid in respect of any Class A
Certificate from moneys received under the Class A Insurance Policy. The Class A
Certificate Insurer shall have the right to inspect such records at reasonable
times during normal business hours upon one Business Day's prior notice to the
Trustee.
(e) In the event that the Trustee has received a
certified copy of an order of the appropriate court that any Insured Payment has
been voided in whole or in part as a preference payment under applicable
bankruptcy law, the Trustee shall so notify the Class A Certificate Insurer,
shall comply with the provisions of the Class A Insurance Policy to obtain
payment by the Class A Certificate Insurer of such voided Insured Payment, and
shall, at the time it provides notice to the Class A Certificate Insurer,
notify, by mail to the Class A Certificateholders of the affected Certificates
that, in the event any Class A Certificateholder's Insured Payment is so
recovered, such Class A Certificateholder will be entitled to payment pursuant
to the Class A Insurance Policy, a copy of which shall be made available through
the Trustee, the Class A Certificate Insurer or the Class A Certificate
Insurer's fiscal agent, if any, and the Trustee shall furnish to the Class A
Certificate Insurer or its fiscal agent, if any, its records evidencing the
payments which have been made by the Trustee and subsequently recovered from the
Class A Certificateholders, and dates on which such payments were made.
(f) The Trustee shall promptly notify the Class A
Certificate Insurer of any proceeding or the institution of any action, of which
a Responsible Officer of the Trustee has actual knowledge, seeking the avoidance
as a preferential transfer under applicable bankruptcy, insolvency, receivership
or similar law (a "PREFERENCE CLAIM") of any distribution made with respect to
the Class A Certificates. Each Class A Certificateholder, by its purchase of
Class A
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Certificates, the Servicer and the Trustee agree that, the Class A Certificate
Insurer (so long as no Class A Certificate Insurer Default exists) may at any
time during the continuation of any proceeding relating to a Preference Claim
direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to such
Preference Claim and (ii) the posting of any surety, supersedes or performance
bond pending any such appeal. In addition and without limitation of the
foregoing, the Class A Certificate Insurer shall be subrogated to, and each
Class A Certificateholder, the Trustee hereby delegates and assigns to the Class
A Certificate Insurer, to the fullest extent permitted by law, the rights the
Trustee and each Class A Certificateholder in the conduct of any such Preference
Claim, including, without limitation, all rights of any party to any adversary
proceeding or action with respect to any court order issued in connection with
any such Preference Claim.
(g) The Trustee shall, upon retirement of the Class A
Certificates, furnish to the Class A Certificate Insurer a notice of such
retirement, and, upon retirement of the Class A Certificates and the expiration
of the term of the Class A Insurance Policy, surrender the Class A Insurance
Policy to the Class A Certificate Insurer for cancellation.
Section 4.06 EFFECT OF PAYMENTS BY THE CLASS A CERTIFICATE
INSURER; SUBROGATION.
Anything herein to the contrary notwithstanding, any payment
with respect to principal of or interest on the Class A Certificates which is
made with moneys received pursuant to the terms of the Class A Insurance Policy
shall not be considered payment of the Class A Certificates from the Trust Fund.
The Depositor, the Servicer and the Trustee acknowledge, and each Holder by its
acceptance of a Class A Certificate agrees, that without the need for any
further action on the part of the Class A Certificate Insurer, the Depositor,
the Servicer, the Trustee or the Certificate Registrar (a) to the extent the
Class A Certificate Insurer makes payments, directly or indirectly, on account
of principal of or interest on the Class A Certificates to the Holders of such
Class A Certificates, the Class A Certificate Insurer will be fully subrogated
to, and each Class A Certificateholder, the Servicer and the Trustee hereby
delegate and assign to the Class A Certificate Insurer, to the fullest extent
permitted by law, the rights of such Holders to receive such principal and
interest from the Trust Fund, including, without limitation, any amounts due to
the Class A Certificateholders in respect of securities law violations arising
from the offer and sale of the Class A Certificates, and (b) the Class A
Certificate Insurer shall be paid such amounts from the sources and in the
manner provided herein for the payment of such amounts and as provided in the
Insurance and Indemnity Agreement. The Trustee and the Servicer shall cooperate
in all respects with any reasonable request by the Class A Certificate Insurer
for action to preserve or enforce the Class A Certificate Insurer's rights or
interests under this Agreement without limiting the rights or affecting the
interests of the Holders as otherwise set forth herein.
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ARTICLE V
THE CERTIFICATES
Section 5.01 THE CERTIFICATES.
The Certificates shall be substantially in the forms attached
hereto as exhibits. The Certificates shall be issuable in registered form, in
the minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class
X and the Class P Certificates as follows: "Deutsche Bank National Trust
Company, as Indenture Trustee on behalf of the Noteholders of the CDC Mortgage
Capital NIM Trust 2002-HE1N", and to deliver such Class X and Class P
Certificates to Deutsche Bank National Trust Company, as trustee of the NIM
Trust.
Subject to Section 9.02 respecting the final distribution on
the Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either (x) by
wire transfer in immediately available funds to the account of such holder at a
bank or other entity having appropriate facilities therefor, if such Holder has
so notified the Trustee at least five Business Days prior to the related Record
Date or (y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the countersignature and delivery of any
such Certificates or did not hold such offices at the date of such Certificate.
No Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless countersigned by the Trustee by manual signature,
and such countersignature upon any Certificate shall be conclusive evidence, and
the only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
Section 5.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER
AND EXCHANGE OF CERTIFICATES.
(a) The Trustee shall maintain, or cause to be maintained
in accordance with the provisions of Section 5.06, a Certificate Register for
the Trust Fund in which, subject to the provisions of subsections (b) and (c)
below and to such reasonable regulations as it may
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prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. Upon surrender for
registration of transfer of any Certificate, the Trustee shall execute and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for
any registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made
unless such transfer is made pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or is exempt
from the registration requirements under said Act and such state securities
laws. Except with respect to the transfer of the Class X and Class P
Certificates to the NIMs Trust on the Closing Date, in the event that a transfer
is to be made in reliance upon an exemption from the Securities Act and such
laws, in order to assure compliance with the Securities Act and such laws, the
Certificateholder desiring to effect such transfer shall certify to the Trustee
in writing the facts surrounding the transfer in substantially the form set
forth in Exhibit H (the "TRANSFEROR CERTIFICATE") and either (i) there shall be
delivered to the Trustee a letter in substantially the form of Exhibit I (the
"RULE 144A LETTER") or (ii) there shall be delivered to the Trustee at the
expense of the transferor an Opinion of Counsel that such transfer may be made
without registration under the Securities Act. The Depositor shall provide to
any Holder of a Private Certificate and any prospective transferee designated by
any such Holder, information regarding the related Certificates and the Mortgage
Loans and such other information as shall be necessary to satisfy the condition
to eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Servicer shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the
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Trustee and the Depositor and the Servicer against any liability that may result
if the transfer is not so exempt or is not made in accordance with such federal
and state laws.
Except with respect to the transfer of the Class X and Class P
Certificates to the NIMs Trust on the Closing Date, no transfer of an
ERISA-Restricted Certificate shall be made unless the Trustee shall have
received either (i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Trustee (in the
event such Certificate is a Private Certificate or a Residual Certificate, such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit I), to the
effect that such transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA, a plan subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law ("SIMILAR LAW") materially
similar to the foregoing provisions of ERISA or the Code, nor a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, or (ii) if the ERISA-Restricted Certificate
is a Private Certificate other than a Residual Certificate or a Class P
Certificate that has been the subject of an ERISA-Qualifying Underwriting, and
the purchaser is an insurance company, a representation that the purchaser is an
insurance company that is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60 or (iii) in the case of any such ERISA-Restricted Certificate
other than a Residual Certificate or Class P Certificate presented for
registration in the name of an employee benefit plan subject to Title I of
ERISA, a plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a plan subject to Similar Law, or a
trustee of any such plan or any other person acting on behalf of any such plan
or arrangement or using such plan's or arrangement's assets, an Opinion of
Counsel satisfactory to the Trustee and the Servicer, which Opinion of Counsel
shall not be an expense of the Trustee, the Servicer or the Trust Fund,
addressed to the Trustee, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in the assets of the Trust Fund
being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code or similar violation of Similar Law and will
not subject the Trustee or the Servicer to any obligation in addition to those
expressly undertaken in this Agreement or to any liability. For purposes of the
preceding sentence, with respect to an ERISA-Restricted Certificate that is not
a Private Certificate or a Residual Certificate, in the event the representation
letter referred to in the preceding sentence is not furnished, such
representation shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquiror's) acceptance of the
ERISA-Restricted Certificates. In the event that such representation is
violated, or any attempt to transfer to a plan or arrangement subject to Section
406 of ERISA, a plan subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement or
using the assets of any such plan or arrangement, without such Opinion of
Counsel, such attempted transfer or acquisition shall be void and of no effect.
To the extent permitted under applicable law (including, but
not limited to, ERISA), the Trustee shall be under no liability to any Person
for any registration of transfer of any ERISA-Restricted Certificate that is in
fact not permitted by this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action
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with respect to such Holder under the provisions of this Agreement so long as
the transfer was registered by the Trustee in accordance with the foregoing
requirements.
(c) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions, and the rights of each Person acquiring any Ownership
Interest in a Residual Certificate are expressly subject to the following
provisions:
(i) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee.
(ii) No Ownership Interest in a Residual
Certificate may be registered on the Closing Date or thereafter
transferred, and the Trustee shall not register the Transfer of any
Residual Certificate unless, in addition to the certificates required
to be delivered to the Trustee under subparagraph (b) above, the
Trustee shall have been furnished with an affidavit (a "TRANSFER
AFFIDAVIT") of the initial owner or the proposed transferee in the form
attached hereto as Exhibit G.
(iii) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall agree (A) to obtain
a Transfer Affidavit from any other Person to whom such Person attempts
to Transfer its Ownership Interest in a Residual Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Residual Certificate and (C) not to Transfer its Ownership Interest
in a Residual Certificate or to cause the Transfer of an Ownership
Interest in a Residual Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any
Ownership Interest in a Residual Certificate in violation of the
provisions of this Section 5.02(c) shall be absolutely null and void
and shall vest no rights in the purported Transferee. If any purported
transferee shall become a Holder of a Residual Certificate in violation
of the provisions of this Section 5.02(c), then the last preceding
Permitted Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Residual
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Residual Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit, Transferor Certificate and the Rule
144A Letter. The Trustee shall be entitled but not obligated to recover
from any Holder of a Residual Certificate that was in fact not a
Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Residual Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
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(v) The Depositor shall use its best efforts to
make available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Residual Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Residual Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee,
the Unaffiliated Seller or the Servicer, to the effect that the elimination of
such restrictions will not cause the Trust Fund hereunder to fail to qualify as
a REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate which is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and
opinions referred to above in this Section 5.02 in connection with transfer
shall be at the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
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If (x) (i) the Depository or the Depositor advises the Trustee
in writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (ii) the Trustee or the
Depositor is unable to locate a qualified successor, (y) the Depositor at its
option advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository or (z) after the occurrence of an Event of
Default, Certificate Owners representing at least 51% of the Certificate Balance
of the Book-Entry Certificates together advise the Trustee and the Depository
through the Depository Participants in writing that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability of
definitive, fully-registered Certificates (the "DEFINITIVE CERTIFICATES") to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
related Class of Certificates by the Depository, accompanied by the instructions
from the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Servicer, the Depositor nor the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Depositor
shall provide the Trustee with an adequate inventory of certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; PROVIDED, that the
Trustee shall not by virtue of its assumption of such obligations become liable
to any party for any act or failure to act of the Depository.
Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Depositor, the Servicer, the Class A Certificate Insurer and the Trustee such
security or indemnity as may be required by them to hold each of them harmless,
then, in the absence of notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute, countersign and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 5.03, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith. Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 PERSONS DEEMED OWNERS.
The Servicer, the Trustee, the Depositor, the Class A
Certificate Insurer and any agent of the Servicer, the Depositor, the Class A
Certificate Insurer or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
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whatsoever, and neither the Servicer, the Trustee, the Depositor, the Class A
Certificate Insurer nor any agent of the Servicer, the Depositor, the Class A
Certificate Insurer or the Trustee shall be affected by any notice to the
contrary.
Section 5.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES.
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 MAINTENANCE OF OFFICE OR AGENCY.
The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates the offices of its agent for such purposes located
at c/o DTC Transfer Agent Services, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Trustee will give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
Section 5.07 RIGHTS OF THE CLASS A CERTIFICATE INSURER TO
EXERCISE RIGHTS OF CLASS A CERTIFICATEHOLDERS.
By accepting its Class A Certificate, each Class A
Certificateholder agrees that unless a Class A Certificate Insurer Default
exists, the Class A Certificate Insurer shall be deemed to be the Class A
Certificateholders for all purposes (other than with respect to the receipt of
payment on the Class A Certificates) and shall have the right to exercise all
rights of the Class A Certificateholders under this Agreement and under the
Class A Certificates without any further consent of the Class A
Certificateholders, including, without limitation:
(a) the right to require the Unaffiliated Seller to
repurchase Mortgage Loans pursuant to Section 2.03 hereof to the extent set
forth in such Section;
(b) the right to give notices of breach or to terminate
the rights and obligations of the Servicer as servicer pursuant to Section 7.01
hereof;
(c) the right to direct the actions of the Trustee during
the continuance of a Servicer default pursuant to Sections 3.24, 7.01 and 7.02
hereof;
(d) the right to institute proceedings against the
Servicer pursuant to Section 7.01 hereof;
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(e) the right to direct the Trustee to investigate
certain matters pursuant to Sections 8.01 and 8.02 hereof;
(f) the right to remove the Trustee pursuant to Section
8.07 hereof;
(g) any rights or remedies expressly given the Class A
Certificateholders.
In addition, each Certificateholder agrees that, subject to
Section 10.11, unless a Class A Certificate Insurer Default exists, the rights
specifically enumerated above may only be exercised by the Certificateholders
with the prior written consent of the Class A Certificate Insurer.
Section 5.08 TRUSTEE TO ACT SOLELY WITH CONSENT OF THE CLASS A
CERTIFICATE INSURER.
Unless a Class A Certificate Insurer Default exists, the
Trustee shall not, without the Class A Certificate Insurer's consent or unless
directed by the Class A Certificate Insurer:
(a) terminate the rights and obligations of the Servicer
as Servicer pursuant to Section 7.01 hereof;
(b) agree to any amendment pursuant to Section 10.01
hereof; or
(c) undertake any litigation.
The Class A Certificate Insurer may, in writing and in its
sole discretion renounce all or any of its rights under this Agreement or any
requirement for the Class A Certificate Insurer's consent for any period of
time.
Section 5.09 MORTGAGE LOANS, TRUST FUND AND ACCOUNTS HELD FOR
BENEFIT OF THE CLASS A CERTIFICATE INSURER.
(a) The Trustee shall hold the Trust Fund and the
Custodial Files for the benefit of the Certificateholders and the Class A
Certificate Insurer and all references in this Agreement and in the Certificates
to the benefit of Holders of the Certificates shall be deemed to include the
Class A Certificate Insurer. The Trustee shall cooperate in all reasonable
respects with any reasonable request by the Class A Certificate Insurer for
action to preserve or enforce the Class A Certificate Insurer's rights or
interests under this Agreement and the Class A Certificates unless, as stated in
an Opinion of Counsel addressed to the Trustee and the Class A Certificate
Insurer, such action is adverse to the interests of the Class A
Certificateholders or diminishes the rights of the Class A Certificateholders or
imposes additional burdens or restrictions on the Class A Certificateholders.
(b) The Servicer hereby acknowledges and agrees that it
shall service the Mortgage Loans for the benefit of the Certificateholders and
for the benefit of the Class A Certificate Insurer, and all references in this
Agreement to the benefit of or actions on behalf of the Certificateholders shall
be deemed to include the Class A Certificate Insurer.
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Section 5.10 CLASS A CERTIFICATE INSURER DEFAULT.
Notwithstanding anything elsewhere in this Agreement or in the
Certificates to the contrary, if a Class A Certificate Insurer Default exists,
or if and to the extent the Class A Certificate Insurer has delivered its
written renunciation of all of its rights under this Agreement, all provisions
of this Agreement which (a) permit the Class A Certificate Insurer to exercise
rights of the Class A Certificateholders, (b) restrict the ability of the
Certificateholders, the Servicer or the Trustee to act without the consent or
approval of the Class A Certificate Insurer, (c) provide that a particular act
or thing must be acceptable to the Class A Certificate Insurer, (d) permit the
Class A Certificate Insurer to direct (or otherwise to require) the actions of
the Trustee, the Servicer or the Certificateholders, (e) provide that any action
or omission taken with the consent, approval or authorization of the Class A
Certificate Insurer shall be authorized hereunder or shall not subject the party
taking or omitting to take such action to any liability hereunder or (f) which
have a similar effect, shall be of no further force and effect and the Trustee
shall administer the Trust Fund and perform its obligations hereunder solely for
the benefit of the Holders of the Certificates. Nothing in the foregoing
sentence, nor any action taken pursuant thereto or in compliance therewith,
shall be deemed to have released the Class A Certificate Insurer from any
obligation or liability it may have to any party or to the Class A
Certificateholders hereunder, under any other agreement, instrument or document
(including, without limitation, the Class A Insurance Policy) or under
applicable law.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 RESPECTIVE LIABILITIES OF THE DEPOSITOR AND THE
SERVICER.
The Depositor and the Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE
SERVICER.
The Depositor and the Servicer will each keep in full effect
its existence, rights and franchises as a corporation or federal savings bank,
as the case may be, under the laws of the United States or under the laws of one
of the states thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Depositor or the Servicer shall be a party, or any person
succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
PROVIDED, HOWEVER, that the successor or
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surviving Person to the Servicer shall be qualified to sell mortgage loans to,
and to service mortgage loans on behalf of, ▇▇▇▇▇▇ Mae or FHLMC.
Section 6.03 LIMITATION ON LIABILITY OF THE DEPOSITOR, THE
SERVICER AND OTHERS.
Neither the Depositor, the Servicer, the Trustee nor any of
their respective directors, officers, employees or agents shall be under any
liability to the Certificateholders for any action taken or for refraining from
the taking of any action in good faith pursuant to this Agreement, or for errors
in judgment; PROVIDED, HOWEVER, that this provision shall not protect the
Depositor, the Servicer, the Trustee or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Servicer, the Trustee or any such Person from any liability which would
otherwise be imposed by reasons of willful misfeasance, bad faith or gross
negligence (or with respect to the Servicer or the Trustee, negligence) in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor and any director, officer, employee or agent of
the Depositor may rely in good faith on any document of any kind PRIMA FACIE
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Servicer, the Trustee and any director, officer,
employee or agent of the Depositor, the Servicer or the Trustee shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates (including, as to the Trustee,
the undertaking of actions as directed by the Unaffiliated Seller or the Class A
Certificate Insurer pursuant to Section 2.03), other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
(or with respect to the Servicer or the Trustee, negligence) in the performance
of their respective duties hereunder or by reason of reckless disregard of their
respective obligations and duties hereunder. The Depositor shall not be under
any obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and which in its opinion may
involve it in any expense or liability; PROVIDED, HOWEVER, that the Depositor
may in its discretion undertake any such action (or direct the Trustee to
undertake any such actions pursuant to Section 2.03 hereof for the benefit of
the Certificateholders) that it may deem necessary or desirable in respect of
this Agreement and the rights and duties of the parties hereto and interests of
the Trustee and the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor shall be
entitled to be reimbursed therefor out of the Collection Account.
Neither the Servicer nor any of the officers, employees or
agents of the Servicer shall be under any liability to the Trustee or the
Depositor for any action taken or for refraining from the taking of any action
in good faith pursuant to this Agreement; PROVIDED, HOWEVER, that this provision
shall not protect the Servicer or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in compliance with the terms of this Agreement, or any liability which would
otherwise be imposed by reason of any breach of the terms and conditions of this
Agreement. The Servicer and any officer, employee or agent of the Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its
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opinion may involve it in any expenses or liability; PROVIDED, HOWEVER, that the
Servicer may undertake any such action which it may deem necessary or desirable
in respect to this Agreement and the rights and duties of the parties hereto. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust Fund,
and the Servicer shall be entitled to be reimbursed therefor out of the
Collection Account.
Section 6.04 LIMITATION ON RESIGNATION OF THE SERVICER.
The Servicer shall not assign this Agreement or resign from
the obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Depositor and the Trustee or upon the determination that its
duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Depositor and the Trustee which Opinion of Counsel
shall be in form and substance acceptable to the Depositor and the Trustee. No
such resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder.
Section 6.05 ADDITIONAL INDEMNIFICATION BY THE SERVICER; THIRD
PARTY CLAIMS.
The Servicer shall indemnify the Depositor, the Unaffiliated
Seller and the Trustee and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to any breach by the Servicer, of any
of its representations and warranties referred to in Section 2.03(a) or the
failure of the Servicer to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement. The Servicer immediately shall
notify the Depositor, the Unaffiliated Seller and the Trustee if a claim is made
by a third party with respect to any such breach or failure by the Servicer
under this Agreement, assume (with the prior written consent of the Depositor,
the Unaffiliated Seller and the Trustee) the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the Unaffiliated Seller or the Trustee in respect
of such claim; provided, that if it is determined that the Servicer is not
obligated to indemnify such parties in accordance with this Section 6.05, each
such party (or the Trust Fund, if applicable) shall promptly reimburse the
Servicer in connection with each of the foregoing payments made to such party by
the Servicer.
ARTICLE VII
DEFAULT
Section 7.01 EVENTS OF DEFAULT.
"EVENT OF DEFAULT," wherever used herein, means any one of the
following events:
(a) any failure by the Servicer to remit to the Trustee
any payment required to be made under the terms of this Agreement which
continues unremedied for a period of one Business Day after the date upon which
written notice of such failure, requiring the same to be
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remedied, shall have been given to the Servicer by the Depositor, by the Class A
Certificate Insurer or by the Trustee or to the Trustee by Certificateholders
evidencing percentage interests of at least 25% in the Certificates; or
(b) failure on the part of the Servicer duly to observe
or perform in any material respect any other of the covenants or agreements on
the part of the Servicer set forth in this Agreement which continues unremedied
for a period of forty-five days (except that such number of days shall be
fifteen in the case of a failure to pay any premium for any insurance policy
required to be maintained under this Agreement) after the earlier of (i) the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Depositor, by the Class A
Certificate Insurer, or by the Trustee, or to the Trustee by Certificateholders
of Certificates evidencing percentage interests of at least 25% in the
Certificates and (ii) actual knowledge of such failure by a Servicing Officer of
the Servicer; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to all or
substantially all of its property; or
(e) the Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) any failure by the Servicer of the Servicer
Termination Test; or
(g) any failure of the Servicer to make any P&I Advance
on any Remittance Date required to be made from its own funds pursuant to
Section 4.01 which continues unremedied for one Business Day immediately
following the Remittance Date; or
(h) a breach of any representation and warranty of the
Servicer referred to in Section 2.03(a), which materially and adversely affects
the interests of the Certificateholders and which continues unremedied for a
period of thirty days after the date upon which written notice of such breach is
given to the Servicer by the Trustee, by the Class A Certificate Insurer, or by
the Depositor, or to the Trustee by Certificateholders entitled to at least 25%
of the Voting Rights in the Certificates.
If an Event of Default described in clauses (a) through (h) of
this Section 7.01 shall occur, then, and in each and every such case, so long as
such Event of Default shall not have been remedied, the Trustee may, or at the
direction of the Class A Certificate Insurer, or of Holders holding at least 51%
of the Voting Rights, the Trustee shall, by notice in writing to the
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Servicer (with a copy to each Rating Agency), terminate all of the rights and
obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder; PROVIDED, HOWEVER, that the Trustee shall not be required to give
written notice to the Servicer of the occurrence of an Event of Default
described in clauses (b) through (h) of this Section 7.01 unless and until a
Responsible Officer of the Trustee has actual knowledge of the occurrence of
such an Event of Default. On and after the receipt by the Servicer of such
written notice, all authority and power of the Servicer hereunder, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Trustee. The Trustee shall make any P&I Advance which the Servicer failed to
make subject to Section 4.01, whether or not the obligations of the Servicer
have been terminated pursuant to this Section. The Trustee is hereby authorized
and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Servicer to pay amounts owed pursuant to
Article VIII. The Servicer agrees to cooperate with the Trustee in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee of all cash amounts which shall
at the time be credited to the Collection Account, or thereafter be received
with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the
Servicer hereunder, the Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan which was due prior to the
notice terminating such Servicer's rights and obligations as Servicer hereunder
and received after such notice, that portion thereof to which such Servicer
would have been entitled pursuant to Section 3.11, and any other amounts payable
to such Servicer hereunder the entitlement to which arose prior to the
termination of its activities hereunder in accordance with Section 3.11 and in
the time period specified in Section 3.11.
Section 7.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Servicer receives a notice of
termination pursuant to Section 3.24 or Section 7.01, the Trustee shall, unless
the Class A Certificate Insurer shall have named an alternative successor
Servicer and given written notice thereof to the Trustee of at least 30 days
prior to the effective date of the transfer of servicing to such successor,
subject to and to the extent provided in Section 3.05, be the successor to the
Servicer in its capacity as servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof and applicable law including the obligation
to make P&I Advances or Servicing Advances pursuant to Section 4.01. As
compensation therefor, the Trustee shall be entitled to all funds relating to
the Mortgage Loans that the Servicer would have been entitled to charge to the
Collection Account or Distribution Account if the Servicer had continued to act
hereunder including, if the Servicer was receiving the Servicing Fee, the
Servicing Fee and the income on investments or gain related to the Collection
Account and Distribution Account.
Notwithstanding the foregoing, if the Trustee has become the
successor to the Servicer in accordance with Section 7.01, the Trustee may, if
it shall be unwilling to so act, or
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shall, if it is prohibited by applicable law from making P&I Advances and
Servicing Advances pursuant to Section 4.01 or if it is otherwise unable to so
act, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each Rating
Agency, as the successor to the Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor to the Servicer shall be an institution which is a
▇▇▇▇▇▇ ▇▇▇ and FHLMC approved seller/servicer in good standing, which has a net
worth of at least $30,000,000, which is willing to service the Mortgage Loans
and which executes and delivers to the Depositor and the Trustee an agreement
accepting such delegation and assignment, containing an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 incurred prior to termination of the Servicer under Section 7.01),
with like effect as if originally named as a party to this Agreement; PROVIDED
that each Rating Agency acknowledges that its rating of the Certificates in
effect immediately prior to such assignment and delegation will not be qualified
or reduced, as a result of such assignment and delegation. Pending appointment
of a successor to the Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall, subject to Section 3.05, act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; PROVIDED, HOWEVER, that no such compensation shall be in excess of the
Servicing Fee Rate and amounts paid to the Servicer from investments. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
Any successor to the Servicer as servicer shall give notice to
the Mortgagors of such change of servicer and shall, during the term of its
service as servicer, maintain in force the policy or policies that the Servicer
is required to maintain pursuant to Section 6.05.
Section 7.03 NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination of or appointment of a successor
to the Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Class A Certificate Insurer, the Unaffiliated Seller and
to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders, the Class
A Certificate Insurer, the Unaffiliated Seller and each Rating Agency notice of
each such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 DUTIES OF THE TRUSTEE.
The Trustee, before the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred
and is continuing,
(a) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of the duties and obligations
specifically set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee, and the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Agreement which it believed
in good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it is finally proven that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken, suffered, or omitted to be taken by it in good faith in accordance
with the direction of the Class A Certificate Insurer, or of Holders of
Certificates evidencing not less than 25% of the Voting Rights of Certificates
relating to the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee under this Agreement.
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Section 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.
Except as otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties and the Trustee shall have no
responsibility to ascertain or confirm the genuineness of any signature of any
such party or parties;
(b) the Trustee may consult with counsel, financial
advisers or accountants and the advice of any such counsel, financial advisers
or accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
(c) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing so to do
by the Class A Certificate Insurer, or by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of Certificates;
(e) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, accountants or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend
its own funds or otherwise incur any financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers hereunder if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement (other than as issuer of the
investment security);
(h) the Trustee shall not be deemed to have knowledge of
an Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof; and
(i) the Trustee shall be under no obligation to exercise
any of the trusts, rights or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Certificateholders, pursuant to
this Agreement, unless such Certificateholders shall have offered to the Trustee
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reasonable security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred therein or thereby.
Section 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE
LOANS.
The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document other than with respect to the Trustee's
execution and countersignature of the Certificates. The Trustee shall not be
accountable for the use or application by the Depositor or the Servicer of any
funds paid to the Depositor or the Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account by the Depositor or the
Servicer.
The Trustee shall have no responsibility for filing or
recording any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the perfection of any security interest
or lien granted to it hereunder (unless the Trustee shall have become the
successor Servicer).
The Trustee executes the Certificates not in its individual
capacity but solely as Trustee of the Trust Fund created by this Agreement, in
the exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 TRUSTEE MAY OWN CERTIFICATES.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 TRUSTEE'S FEES AND EXPENSES.
(a) As compensation for its activities under this
Agreement, the Trustee may withdraw from the Distribution Account on each
Distribution Date the Trustee Fee for the Distribution Date. The Trustee and any
director, officer, employee, or agent of the Trustee shall be indemnified by the
Servicer against any loss, liability, or expense (including reasonable
attorney's fees) resulting from any failure by the Servicer to perform its
obligations under this Agreement. This indemnity shall survive the termination
of this Agreement or the resignation or removal of the Trustee under this
Agreement.
The Trustee shall not be entitled to payment or reimbursement
from the Unaffiliated Seller for any routine ongoing expenses incurred by the
Trustee in the ordinary course of its duties as Trustee, Registrar, or paying
agent under this Agreement or for any other expenses, including indemnification
payments, except as set forth herein.
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Section 8.06 ELIGIBILITY REQUIREMENTS FOR THE TRUSTEE.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with this
Section 8.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its affiliates or the
Servicer and its affiliates; provided, however, that such entity cannot be an
affiliate of the Depositor, the Unaffiliated Seller or the Servicer other than
the Trustee in its role as successor to the Servicer.
Section 8.07 RESIGNATION AND REMOVAL OF THE TRUSTEE.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice of resignation to the Depositor,
the Servicer, the Class A Certificate Insurer, the Unaffiliated Seller, each
Rating Agency not less than 60 days before the date specified in such notice,
when, subject to Section 8.08, such resignation is to take effect, and
acceptance by a successor trustee in accordance with Section 8.08 meeting the
qualifications set forth in Section 8.06. If no successor trustee meeting such
qualifications shall have been so appointed and have accepted appointment within
30 days after the giving of such notice or resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with Section 8.06 and shall fail to resign after written request
thereto by the Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, or a tax is imposed with respect
to the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor or the Servicer may remove the Trustee and
appoint a successor trustee reasonably acceptable to the Class A Certificate
Insurer by written instrument, in triplicate, one copy of which shall be
delivered to the Trustee, one copy to the Servicer and one copy to the successor
trustee.
The Class A Certificate Insurer or the Holders of Certificates
entitled to at least 51% of the Voting Rights may at any time remove the Trustee
and appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact
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duly authorized, one complete set of which shall be delivered by the successor
Trustee to the Servicer, one complete set to the Trustee so removed and one
complete set to the successor so appointed. The successor trustee shall notify
each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Class A Certificate Insurer, the
Servicer and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the succession
of such trustee hereunder to all Holders of Certificates. If the Depositor fails
to mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Depositor.
Section 8.09 MERGER OR CONSOLIDATION OF THE TRUSTEE.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under Section 8.06 without the execution or filing of any paper or
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and
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to vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof, whichever
is applicable, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Servicer and the Trustee
may consider appropriate. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request to do so, or in
the case an Event of Default shall have occurred and be continuing, the Trustee
alone shall have the power to make such appointment. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.06 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(a) To the extent necessary to effectuate the purposes of
this Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee under this
Agreement to advance funds on behalf of the Servicer, shall be conferred or
imposed upon and exercised or performed by the Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable
because of any act or omission of any other trustee hereunder and such
appointment shall not, and shall not be deemed to, constitute any such separate
trustee or co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee; and
(d) The Trustee, and not the Servicer, shall be liable
for the payment of reasonable compensation and expenses to any such separate
trustee or co-trustee from the Trustee Fee payable to the Trustee on each
Distribution Date.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the separate trustees and
co-trustees, when and as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article VIII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection and indemnity to, the Trustee. Every such instrument shall
be filed with the Trustee and a copy thereof given to the Servicer and the
Depositor.
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Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11 TAX MATTERS.
It is intended that the assets with respect to which any REMIC
election pertaining to the Trust Fund is to be made, as set forth in the
Preliminary Statement, shall constitute, and that the conduct of matters
relating to such assets shall be such as to qualify such assets as, a "real
estate mortgage investment conduit" as defined in and in accordance with the
REMIC Provisions. In furtherance of such intention, the Trustee covenants and
agrees that it shall act as agent (and the Trustee is hereby appointed to act as
agent) on behalf of any the REMIC and that in such capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real
Estate Mortgage Investment Conduit Income Tax Return (Form 1066 or any successor
form adopted by the Internal Revenue Service) and prepare and file with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to any REMIC
described in the Preliminary Statement containing such information and at the
times and in the manner as may be required by the Code or state or local tax
laws, regulations, or rules, and furnish to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby;
(b) within thirty days of the Closing Date, furnish to
the Internal Revenue Service on Forms 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of the Lower Tier REMIC
and the Upper Tier REMIC be treated as a REMIC on the federal tax return for its
first taxable year (and, if necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to
the Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the Prepayment Assumption (as defined in the Prospectus
Supplement);
(e) provide information necessary for the computation of
tax imposed on the transfer of a Residual Certificate to a Person that is not a
Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the
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reasonable cost of computing and furnishing such information may be charged to
the Person liable for such tax);
(f) to the extent that they are under its control,
conduct matters relating to such assets at all times that any Certificates are
outstanding so as to maintain the status as a REMIC under the REMIC Provisions;
(g) not knowingly or intentionally take any action or
omit to take any action that would cause the termination of the REMIC status of
any REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph
of this Section 8.11, the amount of any federal or state tax, including
prohibited transaction taxes as described below, imposed on any REMIC created
hereunder before its termination when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Trustee from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings);
(i) cause federal, state or local income tax or
information returns to be signed by the Trustee or such other person as may be
required to sign such returns by the Code or state or local laws, regulations or
rules;
(j) maintain records relating to each REMIC created
hereunder, including the income, expenses, assets, and liabilities thereof on a
calendar year basis and on the accrual method of accounting and the fair market
value and adjusted basis of the assets determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and
(k) as and when necessary and appropriate, represent each
REMIC created hereunder in any administrative or judicial proceedings relating
to an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of each REMIC created
hereunder, enter into settlement agreements with any governmental taxing agency,
extend any statute of limitations relating to any tax item of any REMIC created
hereunder, and otherwise act on behalf of the REMIC in relation to any tax
matter or controversy involving it.
The Trustee shall treat the rights of the Class P
Certificateholders to Prepayment Charges as the beneficial ownership of
interests in a grantor trust, and not as an obligation of any REMIC created
hereunder, for federal income tax purposes.
To enable the Trustee to perform its duties under this
Agreement, the Depositor shall provide to the Trustee within ten days after the
Closing Date all information or data that the Trustee requests in writing and
determines to be relevant for tax purposes to the valuations and offering prices
of the Certificates, including the price, yield, prepayment assumption, and
projected cash flows of the Certificates and the Mortgage Loans. Moreover, the
Depositor shall provide information to the Trustee concerning the value to each
Class of Certificates of the right to receive Basis Risk CarryForward Amounts
from the Excess Reserve Fund Account. Thereafter, the Depositor shall provide to
the Trustee promptly upon written request therefor any
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additional information or data that the Trustee may, from time to time,
reasonably request to enable the Trustee to perform its duties under this
Agreement. The Depositor hereby indemnifies the Trustee for any losses,
liabilities, damages, claims, or expenses of the Trustee arising from any errors
or miscalculations of the Trustee that result from any failure of the Depositor
to provide, or to cause to be provided, accurate information or data to the
Trustee on a timely basis.
If any tax is imposed on "prohibited transactions" of any
REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on the
"net income from foreclosure property" of such REMIC as defined in Section
860G(c) of the Code, on any contribution to the REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including
any minimum tax imposed on the REMIC pursuant to Sections 23153 and 24874 of the
California Revenue and Taxation Code, if not paid as otherwise provided for
herein, the tax shall be paid by (i) the Trustee if such tax arises out of or
results from negligence of the Trustee in the performance of any of its
obligations under this Agreement, (ii) the Servicer if such tax arises out of or
results from a breach by the Servicer of any of its obligations under this
Agreement, (iii) the Unaffiliated Seller shall pay if such tax arises out of or
results from the Unaffiliated Seller's obligation to repurchase a Mortgage Loan
pursuant to Section 2.03, or (iv) in all other cases, or if the Trustee, the
Servicer or the Unaffiliated Seller fails to honor its obligations under the
preceding clauses (i) or (ii), any such tax will be paid with amounts otherwise
to be distributed to the Certificateholders, as provided in Section 4.02(a).
Section 8.12 PERIODIC FILINGS.
Pursuant to written instructions from the Depositor, the
Trustee shall prepare, execute and file all periodic reports required under the
Securities Exchange Act of 1934 in conformity with the terms of the relief
granted to issuers similar to the Trust Fund. In connection with the preparation
and filing of such periodic reports, the Depositor and the Servicer shall timely
provide to the Trustee all material information available to them which is
required to be included in such reports and not known to them to be in the
possession of the Trustee and such other information as the Trustee reasonably
may request from either of them and otherwise reasonably shall cooperate with
the Trustee. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct.
Section 8.13 TAX CLASSIFICATION OF CERTAIN ACCOUNTS.
For federal income tax purposes, the Trustee shall treat the
Excess Reserve Fund Account as an outside reserve fund, within the meaning of
Treasury Regulation ss. 1.860G-2(h), that is beneficially owned by the holder of
the Class X Certificate. ThE Trustee shall treat the rights that each Class of
Certificates has to receive payments of Basis Risk CarryForward Amounts from the
Excess Reserve Fund Account as rights to receive payments under an interest rate
cap contract written by the Class X Certificateholder in favor of each Class.
Accordingly, each Class of Certificates (excluding the Class X, Class P and
Class R Certificates) will comprise two components - an Upper Tier Regular
Interest and an interest in a cap contract. The Trustee shall allocate the issue
price for a Class of Certificates between two components for purposes of
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determining the issue price of the Upper Tier Regular Interest component based
on information received from the Depositor.
ARTICLE IX
TERMINATION
Section 9.01 TERMINATION UPON LIQUIDATION OR PURCHASE OF
THE MORTGAGE LOANS.
Subject to Section 9.03, the obligations and responsibilities
of the Depositor, the Servicer and the Trustee created hereby with respect to
the Trust Fund shall terminate upon the earlier of (a) the purchase, on or after
the applicable Optional Termination Date, by the Servicer or the Class X
Certificateholders of all Mortgage Loans (and REO Properties) at the price equal
to the sum of (i) 100% of the Stated Principal Balance of each Mortgage Loan
(other than in respect of REO Property) plus one month's accrued interest
thereon at the applicable Adjusted Mortgage Rate and (ii) the lesser of (x) the
appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by the Servicer at
the expense of the Servicer and (y) the Stated Principal Balance of each
Mortgage Loan related to any REO Property, in each case plus accrued and unpaid
interest thereon at the applicable Adjusted Net Mortgage Rate and (b) the later
of (i) the maturity or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and the disposition of all
REO Property and (ii) the distribution to Certificateholders of all amounts
required to be distributed to them pursuant to this Agreement. In no event shall
the trusts created hereby continue beyond the expiration of 21 years from the
death of the survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late
Ambassador of the United States to the Court of St. James's, living on the date
hereof.
No such purchase will be permitted without the consent of the
Class A Certificate Insurer, unless no draw on the Class A Insurance Policy
would be made or unreimbursed on the final Distribution Date.
Section 9.02 FINAL DISTRIBUTION ON THE CERTIFICATES.
If on any Determination Date, the Servicer determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Collection Account, the Servicer shall
direct the Trustee promptly to send a Notice of Final Distribution each
Certificateholder. If the Servicer or the Class X Certificateholder elects to
terminate the Trust Fund pursuant to clause (a) of Section 9.01, at least 20
days prior to the date the Notice of Final Distribution is to be mailed to the
affected Certificateholders such electing party shall notify the Depositor and
the Trustee of the date the Servicer or the Class X Certificateholder intends to
terminate the Trust Fund and of the applicable repurchase price of the Mortgage
Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the Trustee
by letter to Certificateholders mailed not earlier than the 15th day and not
later than the 10th day of the month next preceding the month
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of such final distribution. Any such Notice of Final Distribution shall specify
(a) the Distribution Date upon which final distribution on the Certificates will
be made upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such Notice
of Final Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Servicer the Custodial Files for the
Mortgage Loans.
Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to the Certificateholders of each Class,
in each case on the final Distribution Date and in the order set forth in
Section 4.02, in proportion to their respective Percentage Interests, with
respect to Certificateholders of the same Class, an amount equal to (i) as to
each Class of Regular Certificates (except the Class X Certificate), the
Certificate Balance thereof plus for each such Class and the Class X Certificate
accrued interest thereon in the case of an interest-bearing Certificate and (ii)
as to the Residual Certificates, the amount, if any, which remains on deposit in
the Distribution Account (other than the amounts retained to meet claims) after
application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 ADDITIONAL TERMINATION REQUIREMENTS.
In the event the Servicer or the Class X Certificateholder, as
applicable, exercises its purchase option with respect to the Mortgage Loans as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Servicer or the Class X
Certificateholder, as applicable, to the effect that the failure to comply with
the requirements of this Section 9.03 will not (i) result in the imposition of
taxes on "prohibited transactions" on either REMIC as defined in Section 860F of
the Code, or (ii) cause either the Lower Tier REMIC
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or the Upper Tier REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund
to the Servicer or the Class X Certificateholder, as applicable, and, within 90
days of such sale, shall distribute to the Certificateholders the proceeds of
such sale in complete liquidation of each of the Lower Tier REMIC and the Upper
Tier REMIC.
(b) The Trustee shall attach a statement to the final federal
income tax return for each of the Lower Tier REMIC and the Upper Tier REMIC
stating that pursuant to Treasury Regulation ss. 1.860F-1, the first day of the
90-day liquidation period for each sucH REMIC was the date on which the Trustee
sold the assets of the Trust Fund to the Servicer or the Class X
Certificateholder, as applicable.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 AMENDMENT.
This Agreement may be amended from time to time (x) by the
Depositor, the Servicer and the Trustee, with the prior written consent of the
Class A Certificate Insurer, (y) with the consent of the Unaffiliated Seller
unless the Trustee receives an Opinion of Counsel (which Opinion of Counsel
shall not be an expense of the Trustee or the Trust Fund) stating that the
amendment will not adversely affect the Unaffiliated Seller, but (z) without the
consent of any of the Certificateholders (i) to cure any ambiguity or mistake,
(ii) to correct any defective provision herein or to supplement any provision
herein which may be inconsistent with any other provision herein, (iii) to add
to the duties of the Depositor or the Servicer, (iv) to add any other provisions
with respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; PROVIDED, that any action pursuant to clauses (iv) or (v) above shall
not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall not
be an expense of the Trustee or the Trust Fund), adversely affect in any
material respect the interests of any Certificateholder; and PROVIDED, FURTHER,
that the amendment shall not be deemed to adversely affect in any material
respect the interests of the Certificateholders if the Person requesting the
amendment obtains a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates; it being understood and agreed that any such
letter in and of itself will not represent a determination as to the materiality
of any such amendment and will represent a determination only as to the credit
issues affecting any such rating.
In addition, this Agreement may also be amended from time to
time (x) by the Trustee, the Depositor and the Servicer, with the prior written
consent of the Class A Certificate Insurer, and (y) with the consent of the
Unaffiliated Seller unless the Trustee receives an Opinion of Counsel (which
Opinion of Counsel shall not be an expense of the Trustee or the Trust Fund)
stating that the amendment will not adversely affect the Unaffiliated Seller,
but (z) without the consent of the Certificateholders, to modify, eliminate or
add to any of its provisions to such
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extent as shall be necessary or helpful to (i) maintain the qualification of the
Lower Tier REMIC and the Upper Tier REMIC under the Code, (ii) avoid or minimize
the risk of the imposition of any tax on the Lower Tier REMIC or the Upper Tier
REMIC pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code; PROVIDED, that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time (x) by
the Depositor, the Servicer and the Trustee, with the prior written consent of
the Class A Certificate Insurer, (y) with the consent of the Unaffiliated Seller
unless the Trustee receives an Opinion of Counsel (which Opinion of Counsel
shall not be an expense of the Trustee or the Trust Fund) stating that the
amendment will not adversely affect the Unaffiliated Seller, and (z), except as
set forth in Section 3.27, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66-2/3% of each Class
of Certificates (based on the aggregate outstanding principal balance of such
class at such time) affected thereby, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders of
Certificates; PROVIDED, HOWEVER, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing, as
to such Class, Percentage Interests aggregating not less than 66-2/3%, or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any REMIC or the Certificateholders or cause
any REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Notwithstanding the foregoing provisions of this Section
10.01, with respect to any amendment that significantly modifies the permitted
activities of the Trustee or the Servicer, any Certificate beneficially owned by
the Depositor, the Unaffiliated Seller or any of their respective Affiliates
shall be deemed not to be outstanding (and shall not be considered when
determining the percentage of Certificateholders consenting or when calculating
the total number of Certificates entitled to consent) for purposes of
determining if the requisite consents of Certificateholders under this Section
10.01 have been obtained.
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
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It shall not be necessary for the consent of
Certificateholders under this Section 10.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel (which Opinion shall
not be an expense of the Trustee or the Trust Fund), satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02 RECORDATION OF AGREEMENT; COUNTERPARTS.
This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Servicer at its expense, but only upon
receipt of an Opinion of Counsel to the effect that such recordation materially
and beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 10.03 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.04 INTENTION OF PARTIES.
It is the express intent of the parties hereto that the
conveyance (i) of the Mortgage Loans by the Depositor and (ii) of the Trust Fund
by the Depositor to the Trustee each be, and be construed as, an absolute sale
thereof. It is, further, not the intention of the parties that such conveyances
be deemed a pledge thereof. However, in the event that, notwithstanding the
intent of the parties, such assets are held to be the property of the Depositor,
as the case may be, or if for any other reason this Agreement is held or deemed
to create a security interest in either such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) the conveyances provided for
in this Agreement shall be deemed to be an assignment and a grant by the
Depositor
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to the Trustee, for the benefit of the Certificateholders, of a security
interest in all of the assets transferred, whether now owned or hereafter
acquired.
The Depositor for the benefit of the Certificateholders and of
the Class A Certificate Insurer shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Trust Fund, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement. The Depositor shall arrange for filing any Uniform Commercial
Code continuation statements in connection with any security interest granted or
assigned to the Trustee for the benefit of the Certificateholders.
Section 10.05 NOTICES.
(a) The Trustee shall use its best efforts to promptly
provide notice to each Rating Agency with respect to each of the following of
which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not
been cured;
3. The resignation or termination of the Servicer or the
Trustee and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans
pursuant to Section 2.03; and
5. The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to
each Rating Agency copies of the following:
1. Each report to Certificateholders described in
Section 4.03; and
2. Any notice of a purchase of a Mortgage Loan pursuant
to Section 2.02, 2.03 or 3.11.
All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor or the Representative, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq., (b) in the case of the Servicer, Ocwen Federal
Bank FSB, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Secretary, or such other address as may be hereafter furnished
to the parties hereto in writing, (c) in the case of the Trustee to the
Corporate Trust Office, Deutsche Bank National Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Trust Administration
DC02M1, or such other address as the Trustee may hereafter furnish to the
parties hereto, (d) in the case of the Unaffiliated Seller, CDC Mortgage
Capital, Inc., ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention General
112
Counsel, or such other address as the Unaffiliated Seller may hereafter furnish
to the parties hereto, (e) in the case of each of the Rating Agencies, the
address specified therefor in the definition corresponding to the name of such
Rating Agency and (f) in the case of any Originator, the address specified
therefor in the applicable Mortgage Loan Purchase Agreement. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 10.06 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 ASSIGNMENT.
Notwithstanding anything to the contrary contained herein,
except as provided in Section 6.02, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee, the Class A
Certificate Insurer and Depositor; PROVIDED, HOWEVER, that, subject to Section
3.27, the Servicer may pledge or sell its interest in any reimbursements for P&I
Advances or Servicing Advances hereunder.
Section 10.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the trust created hereby, nor entitle
such Certificateholder's legal representative or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as herein
provided, and unless the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates, and the Class A Certificate
Insurer, shall also have made written request to the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses, and liabilities to be incurred therein or thereby, and the
113
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Certificateholder with every other Certificateholder and the Trustee, that
no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 10.08, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
Section 10.09 INSPECTION AND AUDIT RIGHTS.
The Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor, the Unaffiliated Seller, the Class A
Certificate Insurer or the Trustee during the Servicer's normal business hours,
to examine all the books of account, records, reports and other papers of the
Servicer relating to the Mortgage Loans, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants
selected by the party conducting the inspection and to discuss its affairs,
finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Servicer
hereby authorizes said accountants to discuss with such representative such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any out-of-pocket expense of the Servicer incident
to the exercise by the Depositor, the Unaffiliated Seller, the Class A
Certificate Insurer or the Trustee of any right under this Section 10.09 shall
be borne by the Servicer.
Section 10.10 CERTIFICATES NONASSESSABLE AND FULLY PAID.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
Section 10.11 THE CLASS A CERTIFICATE INSURER DEFAULT.
Any right conferred to the Class A Certificate Insurer shall
be suspended during any period in which a Class A Certificate Insurer Default
exists. At such time as the Class A Certificates are no longer outstanding
hereunder, and no amounts owed to the Class A Certificate Insurer hereunder
remain unpaid, the Class A Certificate Insurer's rights hereunder shall
terminate.
114
Section 10.12 THIRD PARTY BENEFICIARY.
The parties agree that the Class A Certificate Insurer is
intended and shall have all rights of a third-party beneficiary of this
Agreement.
Section 10.13 WAIVER OF JURY TRIAL.
EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY,
WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND
AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A
JURY.
Section 10.14 LIMITATION OF DAMAGES.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE
PARTIES HERETO AGREE THAT NO PARTY HERETO SHALL BE LIABLE TO ANY OTHER PARTY
HERETO FOR ANY SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES WHATSOEVER, WHETHER IN
CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR ANY OTHER LEGAL OR
EQUITABLE PRINCIPLES; PROVIDED THAT, THE FOREGOING PROVISION SHALL NOT LIMIT OR
RELIEVE ANY PARTY HERETO OF ANY OBLIGATION UNDER THIS AGREEMENT TO INDEMNIFY ANY
OTHER PARTY HERETO AGAINST ANY DAMAGES IMPOSED UPON SUCH PARTY BY A FINAL ORDER
OF ANY COURT OF COMPETENT JURISDICTION IN CONNECTION WITH ANY LEGAL ACTION
BROUGHT AGAINST SUCH PARTY BY ANY THIRD PARTY.
*******
115
IN WITNESS WHEREOF, the Depositor, the Trustee, the
Unaffiliated Seller and the Servicer have caused their names to be signed hereto
by their respective officers thereunto duly authorized as of the day and year
first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor
By:
-------------------------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its individual
capacity
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
OCWEN FEDERAL BANK FSB,
as Servicer
By:
-------------------------------------------------
Name:
Title:
CDC MORTGAGE CAPITAL INC.,
as Unaffiliated Seller
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
SCHEDULE I
Mortgage Loan Schedule
[See Exhibit A to the Unaffiliated Seller's Agreement, Tab 2]
S-I-1
SCHEDULE II
CDC MORTGAGE CAPITAL TRUST 2002-HE1
Mortgage Pass-Through Certificates,
Series 2002-HE1
REPRESENTATIONS AND WARRANTIES OF THE SERVICER
OCWEN FEDERAL BANK FSB (the "SERVICER"") hereby makes the
representations and warranties set forth in this Schedule II to the Depositor,
the Unaffiliated Seller, the Class A Certificate Insurer and the Trustee, as of
the Closing Date. Capitalized terms used but not otherwise defined in this
Schedule II shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series.
(1) The Servicer is a federally chartered savings bank
duly organized, validly existing and in good standing under the laws of
the United States of America and is duly authorized and qualified to
transact any and all business contemplated by this Pooling and
Servicing Agreement to be conducted by the Servicer in any state in
which a Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any event, is
in compliance with the doing business laws of any such State, to the
extent necessary to ensure its ability to enforce each Mortgage Loan
and to service the Mortgage Loans in accordance with the terms of this
Pooling and Servicing Agreement;
(2) The Servicer has the full power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this Pooling
and Servicing Agreement and has duly authorized by all necessary action
on the part of the Servicer the execution, delivery and performance of
this Pooling and Servicing Agreement; and this Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of the Servicer, enforceable against the Servicer in
accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and
Servicing Agreement by the Servicer, the servicing of the Mortgage
Loans by the Servicer hereunder, the consummation by the Servicer of
any other of the transactions herein contemplated, and the fulfillment
of or compliance with the terms hereof are in the ordinary course of
business of the Servicer and will not (A) result in a breach of any
term or provision of the organizational documents of the Servicer or
(B) conflict with, result in a breach, violation or acceleration of, or
result in a default under, the terms of any other material agreement
S-II-1
or instrument to which the Servicer is a party or by which it may be
bound, or any statute, order or regulation applicable to the Servicer
of any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Servicer; and the Servicer is not a
party to, bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to the Servicer's knowledge, would
in the future materially and adversely affect, (x) the ability of the
Servicer to perform its obligations under this Pooling and Servicing
Agreement or (y) the business, operations, financial condition,
properties or assets of the Servicer taken as a whole;
(4) The Servicer is an approved seller/servicer for
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac in good standing and is a HUD approved
mortgagee pursuant to Section 203 and Section 211 of the National
Housing Act;
(5) No litigation is pending against the Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Pooling and Servicing Agreement or the ability
of the Servicer to service the Mortgage Loans or to perform any of its
other obligations hereunder in accordance with the terms hereof;
(6) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Servicer of, or compliance by the
Servicer with, this Pooling and Servicing Agreement or the consummation
by the Servicer of the transactions contemplated by this Pooling and
Servicing Agreement, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the
Closing Date; and
(7) The Servicer covenants that its computer and other
systems used in servicing the Mortgage Loans operate in a manner such
that the Servicer can service the Mortgage Loans in accordance with the
terms of this Pooling and Servicing Agreement.
S-II-2
SCHEDULE III
CDC Mortgage Capital Inc. hereby makes the representations and
warranties set forth in this Schedule III to the Depositor, the Class A
Certificate Insurer and the Trustee, as of the Closing Date.
(a) DUE ORGANIZATION AND AUTHORITY. The Unaffiliated Seller is a
corporation duly organized, validly existing and in good standing under
the laws of the state of New York and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified
and in good standing in each state wherein it owns or leases any
material properties or where a Mortgaged Property is located, if the
laws of such state require licensing or qualification in order to
conduct business of the type conducted by the Unaffiliated Seller, and
in any event the Unaffiliated Seller is in compliance with the laws of
any such state to the extent necessary; the Unaffiliated Seller has the
full corporate power, authority and legal right to execute and deliver
this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement by the Unaffiliated Seller
and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and
constitute the valid, legal, binding and enforceable obligations of the
Unaffiliated Seller, regardless of whether such enforcement is sought
in a proceeding in equity or at law; and all requisite corporate action
has been taken by the Unaffiliated Seller to make this Agreement and
all agreements contemplated hereby valid and binding upon the
Unaffiliated Seller in accordance with their terms;
(b) NO CONFLICTS. Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the
terms, conditions or provisions of the Unaffiliated Seller's charter or
by-laws or any legal restriction or any agreement or instrument to
which the Unaffiliated Seller is now a party or by which it is bound,
or constitute a default or result in an acceleration under any of the
foregoing, except such unfulfillment, non-compliance or default or
acceleration does not in the aggregate have a material adverse effect
on the operation, business, condition (business or otherwise) of the
Unaffiliated Seller or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Unaffiliated Seller
or its property is subject, except such violation does not in the
aggregate have a material adverse effect on the operation, business,
condition (business or otherwise) of the Unaffiliated Seller or result
in the creation or imposition of any lien, charge or encumbrance that
would have an adverse effect upon any of its properties pursuant to the
terms of any mortgage, contract, deed of trust or other instrument;
(c) NO LITIGATION PENDING. There is no action, suit, proceeding or
investigation pending nor, to the Unaffiliated Seller's knowledge,
threatened against the Unaffiliated Seller, before any court,
administrative agency or other tribunal asserting the invalidity of
this Agreement, seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or which, either in any one
instance or in the aggregate, may result in any material adverse change
in the business, operations, financial condition, properties or
S-III-1
assets of the Unaffiliated Seller, or in any material impairment of the
right or ability of the Unaffiliated Seller to carry on its business
substantially as now conducted, or which would draw into question the
validity of this Agreement or of any action taken or to be taken in
connection with the obligations of the Unaffiliated Seller contemplated
herein, or which would be likely to impair materially the ability of
the Unaffiliated Seller to perform under the terms of this Agreement;
(d) NO CONSENT REQUIRED. No consent, approval, authorization or order of,
or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the
execution, delivery and performance by the Unaffiliated Seller of or
compliance by the Unaffiliated Seller with this Agreement or the
consummation of the transactions contemplated by this Agreement, or if
required, such approval has been obtained prior to the Closing Date;
S-III-2
EXHIBIT A
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER ASSETS.
Certificate No. : [A-1/M-1//B]
Cut-off Date : April 1, 2002
First Distribution Date : May 28, 2002
Initial Certificate Balance of
this Certificate
("Denomination") : A $449,238,000
M $25,381,000
B $25,381,000
Initial Certificate Balances of all
Certificates of this Class : A $449,238,000
M $25,381,000
B $25,381,000
CUSIP : A ▇▇▇▇▇▇▇▇▇
M ▇▇▇▇▇▇▇▇▇
B ▇▇▇▇▇▇▇▇▇
A-1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE1
Mortgage Pass-Through Certificates, Series 2002-HE1
[Class A][Class M][Class B]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable
monthly as set forth herein. Accordingly, the Certificate Balance at any time
may be less than the Certificate Balance as set forth herein. This Certificate
does not evidence an obligation of, or an interest in, and is not guaranteed by
the Depositor, the Unaffiliated Seller, any Originator, the Servicer or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality (other than the Superior Mortgage Loans in accordance
with the FDIC Guaranty).
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "AGREEMENT") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL
I INC., as depositor (the "DEPOSITOR"), Ocwen Federal Bank FSB, as servicer (the
"SERVICER"), CDC Mortgage Capital Inc., as unaffiliated seller (the
"UNAFFILIATED SELLER") and Deutsche Bank National Trust Company, as trustee (the
"TRUSTEE"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
A-2
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but solely as
Trustee
By:
--------------------------------------------------
Countersigned:
By:
-----------------------------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
A-3
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE1
Mortgage Pass-Through Certificates, Series 2002-HE1
This Certificate is one of a duly authorized issue of
Certificates designated as CDC Mortgage Capital Trust 2002-HE1 Mortgage
Pass-Through Certificates, Series 2002-HE1 (herein collectively called the
"CERTIFICATES"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Date immediately preceding such Distribution
Date, provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Trustee for such purposes, or such other location specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the parties thereto, and Financial Security Assurance
Inc., as Class A Certificate Insurer, with the consent of the Holders of
Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the
A-4
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Unaffiliated Seller, the
Class A Certificate Insurer and the Trustee and any agent of any of them may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and no such party shall be affected by any notice to
the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
Maximum Pool Principal Balance, the Servicer and/or the Class X
Certificateholders will have the option to repurchase, in whole, from the Trust
Fund all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
--------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: .
--------------------------------------------------------------.
Dated:
--------------------------------------------
Signature by or on behalf of assignor
A-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
,
--------------------------------------------------------------------------------
,
--------------------------------------------------------------------------------
for the account of ,
-------------------------------------------------------------
account number _______, or, if mailed by check, to
-----------------------------
Applicable statements should be mailed to ,
--------------------------------------
,
-------------------------------------------------------------------------------
This information is provided by ,
------------------------------
the assignee named above, or ,
----------------------------------------------------
as its agent.
A-7
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE TITLE I
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OF A PLAN SUBJECT
TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF
ERISA OR THE CODE, OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF
SUCH A PLAN, OR A REPRESENTATION OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO
THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF
OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE
CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION LETTER OR THE OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : April 1, 2002
First Distribution Date : May 28, 2002
Percentage Interest of this Certificate ("DENOMINATION") : 100%
------------
Principal Balance : $100
CUSIP : N/A
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE1
Mortgage Pass-Through Certificates, Series 2002-HE1
B-1
Class P
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Unaffiliated
Seller, the Servicer or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality (other than the Superior
Mortgage Loans in accordance with the FDIC Guaranty).
This certifies that Deutsche Bank National Trust Company, as
Indenture Trustee, is the registered owner of the Percentage Interest evidenced
by this Certificate (obtained by dividing the denomination of this Certificate
by the aggregate of the denominations of all Certificates of the Class to which
this Certificate belongs) in certain monthly distributions pursuant to a Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"AGREEMENT") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC., as depositor (the
"DEPOSITOR"), Ocwen Federal Bank FSB, as servicer (the "SERVICER"), CDC Mortgage
Capital Inc., as unaffiliated seller (the "UNAFFILIATED SELLER") and Deutsche
Bank National Trust Company, as trustee (the "TRUSTEE"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purpose, or the office or agency
maintained by the Trustee.
No transfer of a Certificate of this Class shall be made
unless such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 ACT"), and any applicable state
securities laws or is made in accordance with the 1933 Act and such laws. In the
event of any such transfer, the Trustee shall require the transferor to execute
a transferor certificate (in substantially the form attached to the Pooling and
Servicing Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made
unless the Trustee shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA, Section 4975 of the Code
or Similar
B-2
Law, or a person acting on behalf of or investing plan assets of any such plan,
which representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
B-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:
----------------------------------
Countersigned:
By:
-----------------------------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
B-4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE1
Mortgage Pass-Through Certificates, Series 2002-HE1
This Certificate is one of a duly authorized issue of
Certificates designated as CDC Mortgage Capital Trust 2002-HE1 Mortgage
Pass-Through Certificates, Series 2002-HE1 (herein collectively called the
"CERTIFICATES"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "DISTRIBUTION DATE"), commencing on
the first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Trustee for such purposes or such other location specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the parties thereto, and Financial Security Assurance
Inc., as Class A Certificate Insurer with the consent of the Holders of
Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon
B-5
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Unaffiliated Seller, the
Class A Certificate Insurer and the Trustee and any agent of any of them may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and no such party shall be affected by any notice to
the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
Maximum Pool Principal Balance, the Servicer and/or the Class X
Certificateholders will have the option to repurchase, in whole, from the Trust
Fund all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
B-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
---------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: .
Dated:
-------------------------------------
Signature by or on behalf of assignor
B-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
,
--------------------------------------------------------------------------------
,
--------------------------------------------------------------------------------
for the account of ,
-------------------------------------------------------------
account number _______, or, if mailed by check, to
-----------------------------
Applicable statements should be mailed to ,
--------------------------------------
,
-------------------------------------------------------------------------------
This information is provided by ,
------------------------------
the assignee named above, or ,
----------------------------------------------------
as its agent.
B-8
EXHIBIT C
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS (i)
TO A PERMITTED TRANSFEREE AND THE TRANSFER IS MADE IN COMPLIANCE WITH SECTION
5.02(c) OF THE AGREEMENT, AND (ii) THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER
A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A
PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE
TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE
VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : April 1, 2002
First Distribution Date : May 28, 2002
Percentage Interest of this
Certificate ("DENOMINATION") : 100%
------------
CUSIP : N/A
C-1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE1
Mortgage Pass-Through Certificates, Series 2002-HE1
Class R
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, the Unaffiliated Seller or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality (other than the Superior Mortgage Loans in accordance
with the FDIC Guaranty).
This certifies that CDC Mortgage Capital Inc. is the
registered owner of the Percentage Interest specified above of any monthly
distributions due to the Class R Certificates pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"AGREEMENT") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC., as depositor (the
"DEPOSITOR"), Ocwen Federal Bank FSB, as servicer (the "SERVICER"), CDC Mortgage
Capital Inc., as unaffiliated seller (the "UNAFFILIATED SELLER") and Deutsche
Bank National Trust Company, as trustee (the "TRUSTEE"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Any distribution of the proceeds of any remaining assets of
the Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in California.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the
C-2
following provisions, and the rights of each Person acquiring any Ownership
Interest in this Class R Certificate are expressly subject to the following
provisions: (i) each Person holding or acquiring any Ownership Interest in this
Class R Certificate shall be a Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in its status as a Permitted
Transferee, (ii) no Ownership Interest in this Class R Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee shall
not register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Trustee under Section 5.02(b) of
the Agreement, the Trustee shall have been furnished with a Transfer Affidavit
of the initial owner or the proposed transferee in the form attached as Exhibit
G to the Agreement, (iii) each Person holding or acquiring any Ownership
Interest in this Class R Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to Transfer its
Ownership Interest this Class R Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or agent in
connection with any Transfer of this Class R Certificate and (C) not to Transfer
the Ownership Interest in this Class R Certificate or to cause the Transfer of
the Ownership Interest in this Class R Certificate to any other Person if it has
actual knowledge that such Person is not a Permitted Transferee and (iv) any
attempted or purported Transfer of the Ownership Interest in this Class R
Certificate in violation of the provisions herein shall be absolutely null and
void and shall vest no rights in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
C-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:
----------------------------------
Countersigned:
By:
-----------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
C-4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE1
Mortgage Pass-Through Certificates, Series 2002-HE1
This Certificate is one of a duly authorized issue of
Certificates designated as CDC Mortgage Capital Trust 2002-HE1 Mortgage
Pass-Through Certificates, Series 2002-HE1 (herein collectively called the
"CERTIFICATES"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Trustee for such purposes or such other location specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the parties thereto, and Financial Security Assurance
Inc., as Class A Certificate Insurer with the consent of the Holders of
Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon
C-5
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in California,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Unaffiliated Seller, the
Class A Certificate Insurer and the Trustee and any agent of any of them may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and no such party shall be affected by any notice to
the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
Maximum Pool Principal Balance, the Servicer and/or the Class X
Certificateholder will have the option to repurchase, in whole, from the Trust
Fund all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
-------------------------------------
Signature by or on behalf of assignor
C-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to
,
--------------------------------------------------------------------------------
,
--------------------------------------------------------------------------------
for the account of ,
-------------------------------------------------------------
account number _______, or, if mailed by check, to
-----------------------------
Applicable statements should be mailed to ,
--------------------------------------
,
-------------------------------------------------------------------------------
This information is provided by ,
------------------------------
the assignee named above, or ,
----------------------------------------------------
as its agent.
C-8
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
EXCEPT AS PROVIDED IN THE POOLING AND SERVICING AGREEMENT, NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE
DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A
PLAN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED
TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA, A
PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN IN
VIOLATION OF THE TRANSFER RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : April 1, 2002
First Distribution Date : May 28, 2002
Percentage Interest of this
Certificate ("Denomination") : 100%
CUSIP : N/A
D-1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE1
Mortgage Pass-Through Certificates, Series 2002-HE1
Class X
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Servicer, the
Unaffiliated Seller or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality (other than the Superior
Mortgage Loans in accordance with the FDIC Guaranty).
This certifies that Deutsche Bank National Trust Company, as
Indenture Trustee, is the registered owner of the Percentage Interest evidenced
by this Certificate (obtained by dividing the denomination of this Certificate
by the aggregate of the denominations of all Certificates of the Class to which
this Certificate belongs) in certain monthly distributions pursuant to a Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"AGREEMENT") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC., as depositor (the
"DEPOSITOR"), Ocwen Federal Bank FSB, as servicer (the "SERVICER"), CDC Mortgage
Capital Inc., as unaffiliated seller (the "UNAFFILIATED SELLER") and Deutsche
Bank National Trust Company, as trustee (the "TRUSTEE"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a Certificate Balance or
Pass-Through Rate and will be entitled to distributions only to the extent set
forth in the Agreement. In addition, any distribution of the proceeds of any
remaining assets of the Trust will be made only upon presentment and surrender
of this Certificate at the offices designated by the Trustee for such purposes
or the office or agency maintained by the Trustee.
No transfer of a Certificate of this Class shall be made
unless such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 ACT"), and any applicable state
securities laws or is made in accordance with the 1933 Act and such laws. In the
event of any such transfer, the Trustee shall require the transferor to execute
a transferor certificate (in substantially the form attached to the Pooling and
Servicing Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
D-2
No transfer of a Certificate of this Class shall be made
unless the Trustee shall have received either (i) a representation letter from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code or any materially similar provisions of applicable Federal, state or local
law ("SIMILAR LAW") or a person acting on behalf of or investing plan assets of
any such plan, which representation letter shall not be an expense of the
Trustee, or (ii) if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, and the purchaser is an insurance company, a representation that
the purchaser is an insurance company which is purchasing such Certificates with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificates are covered
under Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to Similar
Law, or a trustee of any such plan or any other person acting on behalf of any
such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee and the Servicer, which Opinion
of Counsel shall not be an expense of the Trustee, the Servicer or the Trust
Fund, addressed to the Trustee, to the effect that the purchase or holding of
such Certificate will not result in the assets of the Trust Fund being deemed to
be "plan assets" and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee or the Servicer to any obligation
in addition to those expressly undertaken in this Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
D-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:
--------------------------------
Countersigned:
By:
-----------------------------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
D-4
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE1
Mortgage Pass-Through Certificates, Series 2002-HE1
This Certificate is one of a duly authorized issue of
Certificates designated as CDC Mortgage Capital Trust 2002-HE1 Mortgage
Pass-Through Certificates, Series 2002-HE1 (herein collectively called the
"CERTIFICATES"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "DISTRIBUTION DATE"), commencing on
the first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Trustee for such purposes or such other location specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the parties thereto, and Financial Security Assurance
Inc., as Class A Certificate Insurer with the consent of the Holders of
Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon
D-5
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Unaffiliated Seller, the
Class A Certificate Insurer and the Trustee and any agent of any of them may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and no such party shall be affected by any notice to
the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or equal to 10% of the
Maximum Principal Balance, the Servicer and/or the Class X Certificateholders
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
D-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
-------------------------------------
Signature by or on behalf of assignor
D-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ,
------------------------------------------------
,
-------------------------------------------------------------------------------
for the account of ,
------------------------------------------------------------
account number _______, or, if mailed by check, to ,
-----------------------------
Applicable statements should be mailed to ,
-------------------------------------
,
--------------------------------------------------------------------------------
This information is provided by ,
------------------------------
the assignee named above, or ,
---------------------------------------------------
D-8
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Originator]
---------------------
---------------------
Re: Pooling and Servicing Agreement among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS CAPITAL I INC., as Depositor, Ocwen Federal Bank
FSB, as Servicer, CDC Mortgage Capital Inc., as
Unaffiliated Seller and Deutsche Bank National Trust
Company, as Trustee, CDC Mortgage Capital Trust
Series 2002-HE1
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT"), for each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
listed in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in
the following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed assignment of the Mortgage (which may
be included in a blanket assignment or assignments).
Based on its review and examination and only as to the
foregoing documents, such documents appear regular on their face and related to
such Mortgage Loan.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
E-1
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
E-2
EXHIBIT F
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Originator]
---------------------
---------------------
Re: Pooling and Servicing Agreement among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS CAPITAL I INC., as Depositor, Ocwen Federal Bank
FSB, as Servicer, CDC Mortgage Capital Inc., as
Unaffiliated Seller and Deutsche Bank National Trust
Company, as Trustee, CDC Mortgage Capital Trust
Series 2002-HE1
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT"), the
undersigned, as Trustee, hereby certifies that as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or
listed on the attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form
provided in Section 2.01 of the Pooling and Servicing Agreement, with all
intervening endorsements showing a complete chain of endorsement from the
originator to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the
form provided in Section 2.01 of the Pooling and Servicing Agreement; or, if the
Unaffiliated Seller has certified or the Trustee otherwise knows that the
related Mortgage has not been returned from the applicable recording office, a
copy of the assignment of the Mortgage (excluding information to be provided by
the recording office).
(iv) The original or duplicate original recorded
assignment or assignments of the Mortgage showing a complete chain of assignment
from the originator to the last endorsee.
(v) The original or duplicate original lender's title
policy and all riders thereto or, any one of an original title binder, an
original preliminary title report or an original title commitment, or a copy
thereof certified by the title company.
F-1
Based on its review and examination and only as to the
foregoing documents, (a) such documents appear regular on their face and related
to such Mortgage Loan, and (b) the information set forth in items (1), (2) and
(18) of the Mortgage Loan Schedule and items (1), (9) and (17) of the Data Tape
Information accurately reflects information set forth in the Custodial File.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review of the Custodial
File specifically required in the Pooling and Servicing Agreement. The Trustee
makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
F-2
EXHIBIT G
TRANSFER AFFIDAVIT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC. Trust 2002-HE1,
Mortgage Pass-Through Certificates,
Series 2002-HE1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________,
the proposed Transferee of an Ownership Interest in a Class R Certificate (the
"CERTIFICATE") issued pursuant to the Pooling and Servicing Agreement, (the
"AGREEMENT"), relating to the above-referenced Series, by and among ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS CAPITAL I INC., as depositor (the "DEPOSITOR"), Ocwen Federal Bank
FSB, as servicer, CDC Mortgage Capital Inc., as unaffiliated seller (the
"UNAFFILIATED SELLER") and Deutsche Bank National Trust Company, as Trustee.
Capitalized terms used, but not defined herein or in Exhibit 1 hereto, shall
have the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee
for the benefit of the Depositor and the Trustee.
2. The Transferee is, as of the date hereof, and will
be, as of the date of the Transfer, a Permitted Transferee. The Transferee is
acquiring its Ownership Interest in the Certificate for its own account. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands
that (i) a tax will be imposed on Transfers of the Certificate to Persons that
are not Permitted Transferees; (ii) such tax will be imposed on the transferor,
or, if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands
that a tax will be imposed on a "pass-through entity" holding the Certificate if
at any time during the taxable year of the pass-through entity a Person that is
not a Permitted Transferee is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a
G-1
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section
5.02(c) of the Agreement and understands the legal consequences of the
acquisition of an Ownership Interest in the Certificate, including, without
limitation, the restrictions on subsequent Transfers and the provisions
regarding voiding the Transfer and mandatory sales. The Transferee expressly
agrees to be bound by and to abide by the provisions of Section 5.02(c) of the
Agreement and the restrictions noted on the face of the Certificate. The
Transferee understands and agrees that any breach of any of the representations
included herein shall render the Transfer to the Transferee contemplated hereby
null and void.
6. The Transferee agrees to require a Transfer Affidavit
from any Person to whom the Transferee attempts to Transfer its Ownership
Interest in the Certificate, and in connection with any Transfer by a Person for
whom the Transferee is acting as nominee, trustee or agent, and the Transferee
will not Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "TRANSFEROR CERTIFICATE") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede
the assessment or collection of any tax legally required to be paid with respect
to the Certificate.
8. The Transferee's taxpayer identification number is
__________.
9. The Transferee is a U.S. Person as defined in Code
Section 7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. *[The Transferee has computed any consideration paid
to it to acquire the Class [R][LR] Certificate in accordance with proposed U.S.
Treasury Regulations Sections 1.860E-1(a)(4)(iii) and 1.860E-1(c)(5) (or, after
they have been finalized, the final regulations) by computing present values
using a discount rate equal to the applicable Federal rate prescribed by Section
1274(d) of the Code, compounded semi-annually.]
----------------------------------
* Insert appropriate paragraph, if applicable.
G-2
[The Transferee has computed any consideration paid to it to
acquire the Class [R][LR] Certificate in accordance with proposed U.S. Treasury
Regulations Sections 1.860E-1(a)(4)(iii) and 1.860E-1(c)(5) (or, after they have
been finalized, the final regulations) by computing present values using a
discount rate at least equal to the rate at which the Transferee regularly
borrows, in the ordinary course of its trade or business, substantial funds from
unrelated third parties. The Transferee has provided all information necessary
to demonstrate to the transferor that it regularly borrows at such rate.]
[The transfer of the Class [R][LR] Certificate complies with
Section 6 of Revenue Procedure 2001-12 (the "REVENUE PROCEDURE"), 2001-3 I.R.B.
335 (January 16, 2001) (or comparable provisions of applicable final U.S.
Treasury Regulations) and, accordingly,
(i) the Transferee is an "eligible corporation," as
defined in Section 860L(a)(2) of the Code, as to
which income from Class [R][LR] Certificate will only
be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of
the transfer, the Transferee had gross assets for
financial reporting purposes (excluding any
obligation of a person related to the Investor within
the meaning of Section 860L(g) of the Code) in excess
of $100 million and net assets in excess of $10
million;
(iii) the Transferee will transfer the Class [R][LR]
Certificate only to another "eligible corporation,"
as defined in Section 860(a)(2) of the Code, in a
transaction that satisfies the requirements of
Section 4 of the Revenue Procedure; and
(iv) the Transferee determined the consideration paid to
it to acquire the Class [R][LR] Certificate based on
reasonable market assumptions (including, but not
limited to, borrowing and investment rates,
prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors
specific to the Transferee) that it has determined in
good faith.]
[Reserved]
12. The Transferee is not an employee benefit plan that
is subject to ERISA or a plan that is subject to Section 4975 of the Code, and
the Transferee is not acting on behalf of or investing plan assets of such a
plan.
* * *
G-3
IN WITNESS WHEREOF, the Transferee has caused this instrument
to be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this __ day of ________, 20__.
-----------------------------------------
Print Name of Transferee
By:
--------------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
------------------------------------
[Assistant] Secretary
Personally appeared before me the above-named __________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the ___________ of the Transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this __ day of ________, 20__.
-----------------------------------
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
G-4
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company,
as Trustee,
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: CDC Mortgage Capital Trust, Series 2002-HE1, Mortgage
Pass-Through Certificates, Series 2002-HE1, Class ___
Ladies and Gentlemen:
In connection with our disposition of the above Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "ACT"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
------------------------------------
Print Name of Transferor
By:
---------------------------------
Authorized Officer
H-1
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company,
as Trustee,
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: CDC Mortgage Capital Trust 2002, Series 2002-HE1,
Mortgage PASS-THROUGH CERTIFICATES, SERIES 2002-HE1,
CLASS
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "ACT"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan or arrangement that is subject to Section 4975 of the Internal Revenue Code
of 1986, as amended, nor are we acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such acquisition
or, with respect to a Class X Certificate, the purchaser is an insurance company
that is purchasing this certificate with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act,
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in such manner with respect to the Certificates, (f) to the extent that the
Certificate transferred is a Class X Certificate, we are a bankruptcy-remote
entity and (g) we are a "qualified institutional buyer" as that term is defined
in Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
further, understand that such Certificates may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.
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ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "BUYER") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("RULE 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $_________ in securities (except for
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
____ CORPORATION, ETC. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar business
trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
____ BANK. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business
of which is substantially confined to banking and is
supervised by the State or territorial banking
commission or similar official or is a foreign bank
or equivalent institution, and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which
is attached hereto.
____ SAVINGS AND LOAN. The Buyer (a) is a savings and loan
association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
State or Federal authority having supervision over
any such institutions or is a foreign savings and
loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
____ BROKER-DEALER. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act
of 1934.
____ INSURANCE COMPANY. The Buyer is an insurance company
whose primary and predominant business activity is
the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
I-3
subject to supervision by the insurance commissioner
or a similar official or agency of a State, territory
or the District of Columbia.
____ STATE OR LOCAL PLAN. The Buyer is a plan established
and maintained by a State, its political
subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit
of its employees.
____ ERISA PLAN. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
____ INVESTMENT ADVISOR. The Buyer is an investment
advisor registered under the Investment Advisors Act
of 1940.
____ SMALL BUSINESS INVESTMENT COMPANY. Buyer is a small
business investment company licensed by the U.S.
Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958.
____ BUSINESS DEVELOPMENT COMPANY. Buyer is a business
development company as defined in Section 202(a)(22)
of the Investment Advisors Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE
(i) securities of issuers that are affiliated with the Buyer, (ii) securities
that are part of an unsold allotment to or subscription by the Buyer, if the
Buyer is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule
144A and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
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6. Until the date of purchase of the Rule 144A
Securities, the Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Buyer is a bank or savings and loan is provided
above, the Buyer agrees that it will furnish to such parties updated annual
financial statements promptly after they become available.
----------------------------------------
Print Name of Transferor
By:
-------------------------------------
Name:
Title:
Date:
-----------------------------------
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ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "BUYER") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("RULE 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
____ The Buyer owned $______ in securities (other than the
excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $ ________ in securities
(other than the excluded securities referred to
below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used
herein means two or more registered investment companies (or series thereof)
that have the same investment adviser or investment advisers that are affiliated
(by virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include
(i) securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
I-6
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands
that the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
------------------------------------------
Print Name of Transferor
By:
---------------------------------------
Name:
Title:
IF AN ADVISER:
------------------------------------------
Print Name of Buyer
Date:
-------------------------------------
I-7
EXHIBIT J
REQUEST FOR RELEASE
(for Trustee)
To: [Address]
Re:
In connection with the administration of the Mortgage Loans
held by you as the Trustee on behalf of the Certificateholders, we request the
release, and acknowledge receipt, of the (Custodial File/[specify documents])
for the Mortgage Loan described below, for the reason indicated.
MORTGAGOR'S NAME, ADDRESS & ZIP CODE:
MORTGAGE LOAN NUMBER:
SEND CUSTODIAL FILE TO:
REASON FOR REQUESTING DOCUMENTS (CHECK ONE)
____1. Mortgage Loan Paid in Full. (The Company hereby
certifies that all amounts received in connection
therewith have been credited to the Collection
Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03
of the Pooling and Servicing Agreement. (The Company
hereby certifies that the repurchase price has been
credited to the Collection Account as provided in the
Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated By _________________. (The
Company hereby certifies that all proceeds of
foreclosure, insurance, condemnation or other
liquidation have been finally received and credited
to the Collection Account pursuant to the Pooling and
Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
J-1
If box 4 or 5 above is checked, upon our return of all of the
above documents to you as the Trustee, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
OCWEN FEDERAL BANK FSB
By:
---------------------------------
Name:
Title:
Date:
J-2
EXHIBIT K
FORM OF SUBSEQUENT TRANSFER AGREEMENT
CDC MORTGAGE CAPITAL TRUST 2002-HE1
Pursuant to separate Mortgage Loan Purchase Agreements, [BNC
Mortgage, Inc. ("BNC"), IMPAC Funding Corporation ("IFC"), Superior Federal Bank
FSB ("SUPERIOR"), NC Capital Corporation ("NC CAPITAL") and The CIT
Group/Consumer Finance, Inc. and its affiliates ("CIT" and together with BNC,
IFC, Superior and NC Capital, the "ORIGINATORS")] have agreed to sell to CDC
Mortgage Capital Inc. (the "UNAFFILIATED SELLER") certain mortgage loans (each,
a "MORTGAGE LOAN"). These Mortgage Loans may in turn be sold by the Unaffiliated
Seller to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC. (the "DEPOSITOR") and then sold by
the Depositor to the CDC Mortgage Capital Trust ▇▇▇▇-▇▇▇ (▇▇▇ "▇▇▇▇▇ ▇▇▇▇"). The
Trust Fund was established pursuant to a Pooling and Servicing Agreement, dated
as of April 1, 2002 (the "POOLING AND SERVICING AGREEMENT") among the
Unaffiliated Seller, the Depositor, Ocwen Federal Bank FSB, as Servicer (the
"SERVICER") and Deutsche Bank National Trust Company, as trustee (the
"TRUSTEE"). The Pooling and Servicing Agreement permits a pre-funding feature,
allowing for the acquisition by the Trust Fund of Subsequent Mortgage Loans
during the Pre-Funding Period. Representations and warranties with respect to
the Mortgage Loans have been made by the Originators pursuant to separate
Assignment and Recognition Agreements.
Capitalized terms used herein and not defined herein have
their respective meanings as set forth in the Pooling and Servicing Agreement.
CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.
The Unaffiliated Seller does hereby irrevocably sell,
transfer, assign, set over and otherwise convey to the Depositor, without
recourse (except as otherwise explicitly provided for herein) all of its right,
title and interest in and to the Subsequent Mortgage Loans, exclusive of the
obligations of the Unaffiliated Seller or any other Person with respect to the
Subsequent Mortgage Loans but including specifically, without limitation, the
Mortgages, the Custodial Files and all other documents, materials and properties
appurtenant thereto and the Mortgage Notes, including all interest and principal
collected by the Unaffiliated Seller on or with respect to the Subsequent
Mortgage Loans after the related Subsequent Cut-off Date, together with all of
its right, title and interest in and to the proceeds received after such
Subsequent Cut-off Date of any related insurance policies on behalf of the
Depositor.
The Depositor does hereby irrevocably sell, transfer, assign,
set over and otherwise convey to the Trust Fund, without recourse (except as
otherwise explicitly provided for herein) all of its right, title and interest
in and to the Subsequent Mortgage Loans, exclusive of the obligations of the
Depositor or any other Person with respect to the Subsequent Mortgage Loans but
including specifically, without limitation, the Mortgages, the Custodial Files
and all other documents, materials and properties appurtenant thereto and the
Mortgage Notes, including all interest and principal collected by the Depositor
on or with respect to the Subsequent Mortgage Loans after the related Subsequent
Cut-off Date, together with all of its right, title and
K-1
interest in and to the proceeds received after such Subsequent Cut-off Date of
any related insurance policies on behalf of the Trust Fund.
The expenses and costs relating to the delivery of the
Subsequent Mortgage Loans specified in this Subsequent Transfer Agreement and
the Pooling and Servicing Agreement shall be borne by the Unaffiliated Seller.
The Unaffiliated Seller hereby affirms the representations and
warranties set forth in the Unaffiliated Seller's Agreement that relate to the
Subsequent Mortgage Loans on the date hereof. The Unaffiliated Seller hereby
delivers notice and confirms that each of the conditions set forth in Section
2.01(c) of the Pooling and Servicing Agreement are satisfied as of the date
hereof.
Additional terms of the sale are attached hereto as Attachment
A.
To the extent permitted by applicable law, this Subsequent
Transfer Agreement, or a memorandum thereof if permitted under applicable law,
is subject to recordation in all appropriate public offices for real property
records in all counties or other comparable jurisdictions in which any or all of
the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the Unaffiliated Seller's expense, but only when
accompanied by an opinion of counsel to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders or
is necessary for the administration or servicing of the Mortgage Loans.
This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to the principles of conflicts of laws.
This Agreement may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same Agreement.
All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified, confirmed and incorporated herein; PROVIDED, that
in the event of any conflict the provisions of this Subsequent Transfer
Agreement shall control over the conflicting provisions of the Pooling and
Servicing Agreement.
[Remainder of Page Intentionally Left Blank]
K-2
CDC MORTGAGE CAPITAL INC.,
as Unaffiliated Seller
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor
By:
----------------------------------
Name:
Title:
OCWEN FEDERAL BANK FSB,
as Servicer
By:
----------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
K-3
EXHIBIT L
FORM OF FDIC CLAIM
[Date]
Federal Deposit Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Re: CDC MORTGAGE CAPITAL TRUST 2002-HE1
Ladies and Gentlemen:
Reference is made to (i) that certain Amended Corporate Guaranty dated
April 26, 2002 by The Federal Deposit Insurance Corporation (the "FDIC") in
favor of CDC Mortgage Capital Inc. ("CDC") with respect to certain mortgage
loans purchased by CDC from Superior Federal Bank FSB (the "Superior Mortgage
Loans") pursuant to a Mortgage Loan Purchase and Warranties Agreement dated as
of February 1, 2002 (the "FDIC Guaranty") and (ii) that certain letter
agreement, dated April 26, 2002, between the FDIC and CDC (the "Letter
Agreement") consenting to the assignment of the FDIC Guaranty by CDC to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. ("MSABS") and by MSABS to Deutsche Bank National
Trust Company, as trustee on behalf of CDC Mortgage Capital Trust 2002-HE1 (the
"Trustee").
The undersigned, as Trustee, hereby notifies you that with respect to
the following Superior Mortgage Loan(s), the Trustee has incurred a Loss (as
defined in the FDIC Guaranty) as described below:
Mortgage Loan No(s). _________________
Obligor Name(s) _________________
Outstanding Principal Balance of
Mortgage Loan prior to sale or liquidation _________________
Sale/Liquidation Proceeds
(net of expenses) _________________
Loss _________________
In accordance with the FDIC Guaranty and the Letter Agreement, the
Trustee hereby makes a claim for such Loss and requests that the FDIC remit such
amount to the Trustee within 60 days of the date hereof for deposit in the
following account: [Collection Account Information].
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee
By:
---------------------------------------------
Name:
Title:
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