EXHIBIT 4.1
POOLING AND SERVICING AGREEMENT
dated as of September 1, 2002
by and among
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
(Depositor)
AMERICAN BUSINESS CREDIT, INC.
(Servicer)
and
JPMORGAN CHASE BANK
(Trustee, Collateral Agent and Back-up Servicer)
ABFS MORTGAGE LOAN TRUST 2002-3
Mortgage Pass-Through Certificates, Series 2002-3,
Class A, Class A-IO,
Class M-1, Class M-2, Class B, Class X and Class R
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms.........................................................................1
Section 1.02 Provisions of General Application............................................................29
Section 1.03 Business Day Certificate.....................................................................30
ARTICLE II
ESTABLISHMENT OF THE TRUST
SALE AND CONVEYANCE OF THE TRUST FUND
Section 2.01 Establishment of the Trust...................................................................30
Section 2.02 Purchase and Sale of Mortgage Loans..........................................................31
Section 2.03 [RESERVED]...................................................................................31
Section 2.04 Possession of Mortgage Files; Access to Mortgage Files.......................................31
Section 2.05 Delivery of Mortgage Loan Documents..........................................................31
Section 2.06 Acceptance by Trustee of the Trust Fund; Certain Substitutions; Certification by
Trustee......................................................................................34
Section 2.07 Designations under REMIC Provisions; Designation of Startup Day..............................36
Section 2.08 Execution of Certificates....................................................................41
Section 2.09 Application of Principal and Interest........................................................41
Section 2.10 Grant of Security Interest...................................................................42
Section 2.11 Further Action Evidencing Assignments........................................................42
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations of the Servicer and the Unaffiliated Seller..................................42
Section 3.02 Representations, Warranties and Covenants of the Depositor...................................45
Section 3.03 Purchase and Substitution....................................................................46
Section 3.04 Representations, Warranties and Covenants of the Trustee, the Collateral Agent and
the Back-up Servicer.........................................................................48
ARTICLE IV
THE CERTIFICATES
Section 4.01 The Certificates.............................................................................49
Section 4.02 Registration of Transfer and Exchange of Certificates........................................49
Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates............................................54
Section 4.04 Persons Deemed Owners........................................................................55
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ARTICLE V
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 5.01 REMIC Matters; The Servicer..................................................................55
Section 5.02 Collection of Certain Mortgage Loan Payments; Collection Account.............................57
Section 5.03 Permitted Withdrawals from the Collection Account............................................58
Section 5.04 Hazard Insurance Policies; Property Protection Expenses......................................59
Section 5.05 Assumption and Modification Agreements.......................................................60
Section 5.06 Realization Upon Defaulted Mortgage Loans....................................................60
Section 5.07 Trustee to Cooperate.........................................................................62
Section 5.08 Servicing Compensation; Payment of Certain Expenses by Servicer..............................62
Section 5.09 Annual Statement as to Compliance............................................................62
Section 5.10 Annual Independent Public Accountants' Servicing Report......................................63
Section 5.11 Access to Certain Documentation..............................................................63
Section 5.12 Maintenance of Fidelity Bond.................................................................63
Section 5.13 The Subservicers.............................................................................63
Section 5.14 Reports to the Trustee; Collection Account Statements........................................64
Section 5.15 Optional Purchase of Defaulted Mortgage Loans................................................64
Section 5.16 Reports to be Provided by the Servicer.......................................................65
Section 5.17 Adjustment of Servicing Compensation in Respect of Prepaid Mortgage Loans....................65
Section 5.18 Periodic Advances; Special Advance...........................................................65
Section 5.19 Indemnification; Third Party Claims..........................................................66
Section 5.20 Maintenance of Corporate Existence and Licenses; Merger or Consolidation of the
Servicer.....................................................................................67
Section 5.21 Assignment of Agreement by Servicer; Servicer Not to Resign..................................67
Section 5.22 Periodic Filings with the Securities and Exchange Commission; Additional Information.........67
ARTICLE VI
DISTRIBUTIONS AND PAYMENTS
Section 6.01 Establishment of Accounts; Withdrawals from Accounts; Deposits to the Distribution
Account......................................................................................68
Section 6.02 Permitted Withdrawals From the Distribution Account..........................................69
Section 6.03 Collection of Money..........................................................................69
Section 6.04 [RESERVED]...................................................................................69
Section 6.05 Distributions................................................................................69
Section 6.06 Investment of Accounts.......................................................................72
Section 6.07 Reports......................................................................................73
Section 6.08 Additional Reports by Trustee................................................................76
Section 6.09 Compensating Interest........................................................................76
Section 6.10 Supplemental Interest Payment Account........................................................76
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ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................................................77
Section 7.02 Back-up Servicer to Act; Appointment of Successor............................................79
Section 7.03 Waiver of Defaults...........................................................................81
ARTICLE VIII
TERMINATION
Section 8.01 Termination..................................................................................81
Section 8.02 Additional Termination Requirements..........................................................82
Section 8.03 Accounting Upon Termination of Servicer......................................................83
ARTICLE IX
THE TRUSTEE
Section 9.01 Duties of Trustee............................................................................84
Section 9.02 Certain Matters Affecting the Trustee........................................................85
Section 9.03 Trustee Not Liable for Certificates or Mortgage Loans........................................87
Section 9.04 Trustee May Own Certificates.................................................................87
Section 9.05 Trustee's Fees and Expenses; Indemnity.......................................................87
Section 9.06 Eligibility Requirements for Trustee.........................................................88
Section 9.07 Resignation and Removal of the Trustee.......................................................88
Section 9.08 Successor Trustee............................................................................89
Section 9.09 Merger or Consolidation of Trustee...........................................................90
Section 9.10 Appointment of Co-Trustee or Separate Trustee................................................90
Section 9.11 Tax Returns..................................................................................91
Section 9.12 Retirement of Certificates...................................................................91
Section 9.13 Trustee May Enforce Claims Without Possession of Certificates................................91
Section 9.14 Suits for Enforcement........................................................................91
ARTICLE X
THE COLLATERAL AGENT
Section 10.01 Duties of the Collateral Agent...............................................................91
Section 10.02 Certain Matters Affecting the Collateral Agent...............................................93
Section 10.03 Collateral Agent Not Liable for Certificates or Mortgage Loans...............................94
Section 10.04 Collateral Agent May Own Certificates........................................................94
Section 10.05 Collateral Agent's Fees and Expenses; Indemnity..............................................94
Section 10.06 Eligibility Requirements for Collateral Agent................................................95
Section 10.07 Resignation and Removal of the Collateral Agent..............................................95
Section 10.08 Successor Collateral Agent...................................................................96
Section 10.09 Merger or Consolidation of Collateral Agent..................................................96
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Limitation on Liability of the Depositor, the Back-up Servicer and the Servicer..............97
Section 11.02 Acts of Certificateholders...................................................................97
Section 11.03 Amendment....................................................................................98
Section 11.04 Recordation of Agreement.....................................................................98
Section 11.05 Duration of Agreement........................................................................98
Section 11.06 Notices......................................................................................99
Section 11.07 Severability of Provisions...................................................................99
Section 11.08 No Partnership...............................................................................99
Section 11.09 Counterparts.................................................................................99
Section 11.10 Successors and Assigns.......................................................................99
Section 11.11 Headings.....................................................................................99
Section 11.12 [RESERVED]...................................................................................99
Section 11.13 Third Party Beneficiary.....................................................................100
Section 11.14 [RESERVED]..................................................................................100
Section 11.15 Appointment of Tax Matters Person; Certain Taxes............................................100
Section 11.16 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL................................103
EXHIBITS
EXHIBIT A Class A Certificates
EXHIBIT B Class A-IO Certificate
EXHIBIT C Class M-1 and Class M-2 Certificates
EXHIBIT D Class B Certificate
EXHIBIT E Class R Certificate
EXHIBIT F Class X Certificate
EXHIBIT G Contents of the Mortgage File
EXHIBIT H Certificate Re: Prepaid Loans
EXHIBIT I [Reserved]
EXHIBIT J Initial Certification of Collateral Agent
EXHIBIT K Final Certification of Collateral Agent
EXHIBIT L Request for Release of Documents
EXHIBIT M Transfer Affidavit and Agreement
EXHIBIT N Transferor's Certificate
EXHIBIT O ERISA Investment Representation Letter
EXHIBIT P Resale Certification
EXHIBIT Q Assignment
EXHIBIT R Wiring Instruction Form
EXHIBIT S Collateral Agent's Acknowledgment of Receipt
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SCHEDULES
SCHEDULE I Mortgage Loan Schedule
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POOLING AND SERVICING AGREEMENT, relating to ABFS MORTGAGE LOAN TRUST
2002-3, dated as of September 1, 2002 (this "Agreement"), by and among Credit
Suisse First Boston Mortgage Securities Corp., a Delaware corporation, in its
capacity as depositor (the "Depositor"), AMERICAN BUSINESS CREDIT, INC., a
Pennsylvania corporation, in its capacity as servicer (the "Servicer"), and
JPMORGAN CHASE BANK, a New York banking corporation, in its capacity as trustee,
collateral agent and back-up servicer (the "Trustee", the "Collateral Agent" and
the "Back-up Servicer", respectively).
WHEREAS, the Depositor wishes to establish a trust which provides for
the allocation and sale of the beneficial interests therein and the maintenance
and distribution of the trust estate;
WHEREAS, the Servicer has agreed to service the Mortgage Loans, which
constitute the principal assets of the trust estate; and
WHEREAS, JPMorgan Chase Bank is willing to serve in the capacities of
Trustee, Collateral Agent and Back-up Servicer hereunder.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Depositor, the Servicer, the Trustee, the
Collateral Agent and the Back-up Servicer hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
Certain Defined Terms. Whenever used herein, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings.
ABFS: American Business Financial Services, Inc.
ACCEPTED SERVICING PRACTICES: The Servicer's normal servicing practices
including practices regarding reconciliation of bank accounts, processing of
mortgage payments, processing of disbursements for tax and insurance payments,
maintenance of mortgage loan records, performance of collection efforts
including disposition of delinquent loans, foreclosure activities and
disposition of real estate owned and performance of investor accounting and
reporting processes. Such practices will conform to the mortgage servicing
practices of prudent mortgage lending institutions which service, for their own
account, mortgage loans of the same type as the Mortgage Loans in the
jurisdiction in which the related Mortgaged Properties are located, which may
change from time to time; provided, that such practices shall at all times
conform to the Credit and Servicing Policy Manuals.
ACCOUNT: Any of the Collection Account, the Distribution Account, the
Interest Reserve Account or the Supplemental Interest Payment Account.
ACCRUAL PERIOD: With respect to the Offered Certificates and any
Distribution Date, the prior calendar month.
AFFILIATE: With respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
AGGREGATE PRINCIPAL BALANCE: With respect to the Mortgage Loans and any
date of determination, the aggregate Principal Balance of the Mortgage Loans as
of such date of determination.
AGREEMENT: This Pooling and Servicing Agreement, including the Exhibits
hereto, and all amendments hereof and supplements hereto.
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date,
the amount, if any, by which the aggregate Certificate Principal Balance of the
Offered Certificates after distributions of principal on such Distribution Date
exceeds the Aggregate Principal Balance of the Mortgage Loans as of the last day
of the immediately preceding Due Period.
APPRAISED VALUE: As to any Mortgaged Property and time referred to
herein, the appraised value of the Mortgaged Property based upon the appraisal
made by or on behalf of the related Originator at the time referred to herein
or, in the case of a Mortgage Loan that is a purchase money mortgage loan, the
sales price of the Mortgaged Property, if such sales price is less than such
appraised value.
ASSIGNMENT OF MORTGAGE: With respect to each Mortgage Loan, an
assignment of the Mortgage, notice of transfer or equivalent instrument
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage to the Trustee
for the benefit of the Certificateholders.
AUTHORIZED DENOMINATIONS: Each of the Offered Certificates is issuable
only in the minimum Percentage Interest corresponding to a minimum denomination
of $1,000 or integral multiples of $1,000 in excess thereof, in each case of
Certificate Principal Balance; provided, however, that one Certificate of each
Class is issuable in a denomination equal to any such multiple plus an
additional amount such that the aggregate denomination of each Class of Offered
Certificates shall be equal to the applicable Original Certificate Principal
Balance or the Class A-IO Notional Balance, as applicable.
BACK-UP SERVICER: JPMorgan Chase Bank, a New York banking corporation,
its successors and assigns.
BACK-UP SERVICING FEE: As to any Distribution Date, the fee payable to
the Back-up Servicer in respect of its services as Back-up Servicer that accrues
at a monthly rate equal to one-twelfth of 0.01125% on the Principal Balance of
each Mortgage Loan as of the immediately preceding Due Date.
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BANKRUPTCY CODE: The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
BASIC DOCUMENTS: This Agreement, the Unaffiliated Seller's Agreement,
the Indemnification Agreement and the Underwriting Agreement.
BASIC PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the positive excess, if any, of (x) the Principal Remittance Amount for
such Distribution Date over (y) the Excess Overcollateralized Amount for such
Distribution Date.
BUSINESS DAY: Any day other than (a) a Saturday or Sunday, or (b) a day
on which banking institutions in the States of Pennsylvania, New York, Delaware
or New Jersey are authorized or obligated by law or executive order to be
closed.
BUSINESS PURPOSE PROPERTY: Any mixed-use property, commercial property,
or four or more unit multifamily property.
CAPPED CERTIFICATES: The Class A, Class M-1, Class M-2 and Class B
Certificates.
CERCLA: The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
CERTIFICATE: Any Class A, Class A-IO, Class M-1, Class M-2, Class B,
Class X or Class R Certificate executed by the Trustee on behalf of the Trust
Fund and authenticated by the Trustee.
CERTIFICATEHOLDER or HOLDER: Each Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
giving any consent, waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Servicer or any Subservicer or the
Unaffiliated Seller, or any Affiliate of any of them, shall be deemed not to be
outstanding and the undivided Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite percentage of
Certificates necessary to effect any such consent, waiver, request or demand has
been obtained. For purposes of any consent, waiver, request or demand of
Certificateholders pursuant to this Agreement, upon the Trustee's request, the
Servicer and the Unaffiliated Seller shall provide to the Trustee a notice
identifying any of their respective Affiliates or the Affiliates of any
Subservicer that is a Certificateholder as of the date(s) specified by the
Trustee in such request.
CERTIFICATE PRINCIPAL BALANCE: With respect to any Class of
Certificates, other than the Class A-IO, Class X or Class R Certificates, as of
any date of determination, the maximum dollar amount of principal to which the
Holders thereof are then entitled hereunder, such amount being equal to the
Original Certificate Principal Balance of such Class minus (i) the amount of all
distributions of principal previously made with respect thereto and (ii) in the
case of any Subordinate Certificates, reduced by any Applied Realized Loss
Amounts applicable to such Class of Subordinate Certificates. The Class A-IO,
Class X and Class R Certificates do not have a "Certificate Principal Balance".
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CERTIFICATE REGISTER: As defined in Section 4.02.
CERTIFICATE REGISTRAR: As defined in Section 4.02.
CHANGE OF CONTROL: Any of the following: (a) ABFS shall cease to own,
beneficially and of record, 100% of the issued and outstanding Stock of the
Servicer; (b) the consummation of a merger or consolidation of ABFS with or into
another entity or any other corporate reorganization, if more that 50% of the
combined voting power of the continuing or surviving entity's Stock outstanding
immediately after such merger, consolidation or such other reorganization is
owned by persons who were not stockholders of ABFS immediately prior to such
merger, consolidation or other reorganization; or (c) the sale, transfer, or
other disposition of all or substantially all of ABFS's assets. For purposes of
the foregoing, "Stock" means all shares, options, warrants, interests,
participation or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or nonvoting, including common
stock, preferred stock, convertible debentures and all agreements, instruments
and documents convertible, in whole or in part, into any one or more or all of
the foregoing.
CIVIL RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended or similar state statutes.
CIVIL RELIEF ACT INTEREST SHORTFALL: With respect to any Distribution
Date, for any Mortgage Loan as to which there has been a reduction in the amount
of interest collectible thereon for the most recently ended Due Period as a
result of the application of the Civil Relief Act, the amount, if any, by which
(a) interest collectible on such Mortgage Loan during the most recently ended
calendar month is less than (b) the sum of one month's interest on the Principal
Balance of such Mortgage Loan, calculated at a rate equal to the Mortgage
Interest Rate.
CLASS: Each class of Certificates designated as the Class A, Class
A-IO, Class M-1, Class M-2, Class B, Class X or Class R Certificates and, for
the purposes of Section 2.07, any class of interests referenced in Section 2.07.
CLASS A CERTIFICATE: Any Certificate designated as a "Class A
Certificate" on the face thereof, in the form of Exhibit A hereto. The Class A
Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS A PASS-THROUGH RATE: With respect to any Distribution Date, the
lesser of (1) for any Distribution Date which occurs on or prior to the Clean-Up
Call Date, the per annum rate equal to 4.263%, and for any Distribution Date
thereafter, the per annum rate equal to 4.763% and (2) the Net WAC Cap for such
Distribution Date.
CLASS A-IO CERTIFICATE: Any Certificate designated as a "Class A-IO
Certificate" on the face thereof, in the form of Exhibit B hereto.
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CLASS A-IO NOTIONAL BALANCE: With respect to any Distribution Date (i)
prior to the Distribution Date occurring in April 2005, an amount equal to the
lesser of (x) the Class A-IO Scheduled Notional Balance and (y) the Aggregate
Principal Balance of the Mortgage Loans as of the first day of the related Due
Period and (ii) on and after the Distribution Date occurring in April 2005, $0.
CLASS A-IO PASS-THROUGH RATE: With respect to any Distribution Date, a
per annum rate equal to 7.00%.
CLASS A-IO SCHEDULED NOTIONAL BALANCE: With respect to any Distribution
Date, the applicable amount set forth in the following schedule:
Class A-IO Class A-IO
Scheduled Scheduled
Distribution Date Notional Balance Distribution Date Notional Balance
----------------- ---------------- ----------------- ----------------
October 2002 $119,660,000 February 2004 $93,480,000
November 2002 $119,660,000 March 2004 $93,480,000
December 2002 $119,660,000 April 2004 $92,550,000
January 2003 $117,810,000 May 2004 $92,550,000
February 2003 $117,810,000 June 2004 $92,550,000
March 2003 $117,810,000 July 2004 $73,300,000
April 2003 $113,560,000 August 2004 $73,300,000
May 2003 $113,560,000 September 2004 $73,300,000
June 2003 $113,560,000 October 2004 $58,220,000
July 2003 $107,260,000 November 2004 $58,220,000
August 2003 $107,260,000 December 2004 $58,220,000
September 2003 $107,260,000 January 2005 $49,800,000
October 2003 $100,140,000 February 2005 $49,800,000
November 2003 $100,140,000 March 2005 $49,800,000
December 2003 $100,140,000 April 2005
January 2004 $ 93,480,000 and thereafter $ 0
CLASS B CERTIFICATE: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit D hereto. The Class B
Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS B PASS-THROUGH RATE: With respect to any Distribution Date, the
lesser of (1) for any Distribution Date which occurs on or prior to the Clean-Up
Call Date, the per annum rate equal to 6.860%, and for any Distribution Date
thereafter, the per annum rate equal to 7.360% and (2) the Net WAC Cap for such
Distribution Date.
CLASS B PRINCIPAL DISTRIBUTION AMOUNT: On any Distribution Date (x)
prior to the Stepdown Date and on any Distribution Date thereafter on which a
Trigger Event is in effect, (i) if any of the Class A, Class M-1 or Class M-2
Certificates remain outstanding, zero or (ii) if the aggregate Certificate
Principal Balance of the Class A, Class M-1 and Class M-2 Certificates has been
reduced to zero, the lesser of (a) the Certificate Principal Balance of the
Class B Certificates immediately prior to such Distribution Date and (b) 100% of
the Principal Distribution Amount and (y) following the Stepdown Date and to the
extent a Trigger Event is not in effect, the least of (1) the Principal
Distribution Amount remaining after distribution of the Senior, Class M-1 and
Class M-2 Principal Distribution Amounts on the related Distribution Date, (2)
the excess of (i) the sum of (a) the aggregate Certificate Principal Balance of
the Class A, Class M-1 and Class M-2 Certificates after distribution of the
Senior, Class M-1 and Class M-2 Principal Distribution Amounts on the related
Distribution Date and (b) the Certificate Principal Balance of the Class B
Certificates immediately prior to the related Distribution Date over (ii) the
lesser of (x) 93.00% of the Aggregate Principal Balance of the Mortgage Loans on
the last day of the related Due Period and (y) the Aggregate Principal Balance
of the Mortgage Loans on the last day of the related Due Period minus the OC
Floor (but not less than zero) and (3) the Certificate Principal Balance of the
Class B Certificates immediately prior to the related Distribution Date.
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CLASS INTEREST CARRYOVER SHORTFALL: With respect to any Class of
Offered Certificates and any Distribution Date, an amount equal to the sum of
(a) the excess, if any, of the Class Monthly Interest Amount for such Class (the
amount to which the Class is entitled in the absence of any shortfall but after
giving effect to the Net WAC Cap, if applicable) for the preceding Distribution
Date and any outstanding Class Interest Carryover Shortfall with respect to that
Class from any preceding Distribution Dates, over the amount in respect of
interest that is actually distributed to the Holders of that Class on the
preceding Distribution Date, plus (b) one-month's interest on the amount
described in clause (a), to the extent permitted by law, at the related
Pass-Through Rate.
CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit C hereto. The Class M-1
Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS M-1 PASS-THROUGH RATE: With respect to any Distribution Date, the
lesser of (1) for any Distribution Date which occurs on or prior to the Clean-Up
Call Date, the per annum rate equal to 5.402%, and for any Distribution Date
thereafter, the per annum rate equal to 5.902% and (2) the Net WAC Cap for such
Distribution Date.
CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: On any Distribution Date (x)
prior to the Stepdown Date and on any Distribution Date thereafter on which a
Trigger Event is in effect, (i) if any Class A Certificates remain outstanding,
zero or (ii) if the Certificate Principal Balance of the Class A Certificates
has been reduced to zero, the lesser of (a) the Certificate Principal Balance of
the Class M-1 Certificates immediately prior to such Distribution Date and (b)
100% of the Principal Distribution Amount and (y) following the Stepdown Date
and to the extent a Trigger Event is not in effect, the least of (1) the
Principal Distribution Amount remaining after distribution of the Senior
Principal Distribution Amount on the related Distribution Date, (2) the excess
of (i) the sum of (a) the Certificate Principal Balance of the Class A
Certificates after distribution of the Senior Principal Distribution Amount on
the related Distribution Date and (b) the Certificate Principal Balance of the
Class M-1 Certificates immediately prior to the related Distribution Date over
(ii) the lesser of (x) 79.00% of the Aggregate Principal Balance of the Mortgage
Loans on the last day of the related Due Period and (y) the Aggregate Principal
Balance of the Mortgage Loans on the last day of the related Due Period minus
the OC Floor (but not less than zero) and (3) the Certificate Principal Balance
of the Class M-1 Certificates immediately prior to the related Distribution
Date.
6
CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit C hereto. The Class M-2
Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS M-2 PASS-THROUGH RATE: With respect to any Distribution Date, the
lesser of (1) for any Distribution Date which occurs on or prior to the Clean-Up
Call Date, the per annum rate equal to 5.895%, and for any Distribution Date
thereafter, the per annum rate equal to 6.395% and (2) the Net WAC Cap for such
Distribution Date.
CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: On any Distribution Date (x)
prior to the Stepdown Date and on any Distribution Date thereafter on which a
Trigger Event is in effect, (i) if any of the Class A and Class M-1 Certificates
remain outstanding, zero or (ii) if the aggregate Certificate Principal Balance
of the Class A Certificates and Class M-1 Certificates has been reduced to zero,
the lesser of (a) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date and (b) 100% of the
Principal Distribution Amount and (y) following the Stepdown Date and to the
extent a Trigger Event is not in effect, the least of (1) the Principal
Distribution Amount remaining after distribution of the Senior and Class M-1
Principal Distribution Amounts on the related Distribution Date, (2) the excess
of (i) the sum of (a) the aggregate Certificate Principal Balance of the Class A
and Class M-1 Certificates after distribution of the Senior and Class M-1
Principal Distribution Amounts, on the related Distribution Date and (b) the
Certificate Principal Balance of the Class M-2 Certificates immediately prior to
the related Distribution Date over (ii) the lesser of (x) 89.00% of the
Aggregate Principal Balance of the Mortgage Loans on the last day of the related
Due Period and (y) the Aggregate Principal Balance of the Mortgage Loans on the
last day of the related Due Period minus the OC Floor and (3) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to the related
Distribution Date.
CLASS MONTHLY INTEREST AMOUNT: With respect to any Class of Offered
Certificates and any Distribution Date, the amount of interest accrued during
the related Accrual Period on the Certificate Principal Balance of such Class
immediately prior to such Distribution Date at the related Pass-Through Rate, as
reduced by that Class's pro rata share of Mortgage Loan Interest Shortfalls for
such Distribution Date allocated to such Class pursuant to Section 6.05(c) of
this Agreement.
CLASS PRINCIPAL CARRYOVER SHORTFALL: With respect to any Class of
Subordinate Certificates and any Distribution Date, the excess, if any, of (a)
the sum of (x) the amount of the reduction in the Certificate Principal Balance
of that Class of Subordinate Certificates on such Distribution Date as a result
of Applied Realized Loss Amounts and (y) the amount of such reductions on prior
Distribution Dates, over (b) the amount distributed in respect of the Class
Principal Carryover Shortfall to such Class of Subordinate Certificates on prior
Distribution Dates. Any amounts distributed to a Class of Subordinate
Certificates in respect of any Class Principal Carryover Shortfalls shall not be
applied to reduce the Certificate Principal Balance of that Class.
7
CLASS R CERTIFICATE: Any Certificate designated as a "Class R
Certificate" on the face thereof, in the form of Exhibit E hereto.
CLASS R CERTIFICATEHOLDER: A Holder of a Class R Certificate.
CLASS X CERTIFICATE: Any Certificate designated as a "Class X
Certificate" on the face thereof, in the form of Exhibit F hereto.
CLASS X CERTIFICATEHOLDER: A Holder of a Class X Certificate.
CLASS X DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
lesser of (i) the aggregate funds, if any, remaining after the making of all
applications, transfers and disbursements described in Section 6.05(a)(i)
through 6.05(c)(xi) hereof and (ii) the amounts described in footnotes (7) and
(8) of Section 2.07(b) hereof for the current and for all prior Distribution
Dates less amounts distributed to the Class X Certificates on prior Distribution
Dates pursuant to Sections 6.05(c)(viii) and (xii) hereof.
CLEAN-UP CALL DATE: As defined in Section 8.01(b).
CLOSING DATE: September 26, 2002.
CODE: The Internal Revenue Code of 1986, as amended.
COLLATERAL AGENT: JPMorgan Chase Bank, its successors and assigns.
COLLECTION ACCOUNT: The Eligible Account established and maintained by
the Servicer pursuant to Section 5.02(b).
COMBINED LOAN-TO-VALUE RATIO or CLTV: As to any Mortgage Loan at any
time, the fraction, expressed as a percentage, the numerator of which is the sum
of (i) the Principal Balance thereof at such time and (ii) if such Mortgage Loan
is subject to a second mortgage, the unpaid principal balance of any related
first mortgage loan or loans, if any, as of such time, and the denominator of
which is the Appraised Value of any related Mortgaged Property or Properties as
of the date of the appraisal used by or on behalf of the Unaffiliated Seller to
underwrite such Mortgage Loan.
COMMISSION: The Securities and Exchange Commission.
COMPENSATING INTEREST: As defined in Section 6.09 hereof.
CONTROLLING PARTY: The Trustee, acting at the direction of the Majority
Certificateholders.
CORRESPONDING CLASS: Means the Class of Master REMIC Regular Interests
as used in the Table in Section 2.07.
8
CREDIT AND SERVICING POLICY MANUALS: With respect to an Originator, its
written policies and procedures regarding underwriting, origination and
servicing of mortgage loans, as delivered to the Rating Agencies on or prior to
the Closing Date, with such changes notified to the Rating Agencies (a) that do
not have a material adverse effect on such policies and procedures, or (b) that
satisfy the Rating Agency Condition, or (c) that the Servicer does not apply to
the Mortgage Loans.
CUMULATIVE LOSS PERCENTAGE: As of any date of determination thereof,
the percentage obtained by dividing (x) the aggregate of all Liquidated Loan
Losses incurred since the Closing Date through the last day of the related Due
Period by (y) the Original Aggregate Principal Balance of the Mortgage Loans.
CUMULATIVE LOSS TRIGGER EVENT: With respect to any Distribution Date,
the event that occurs if the Cumulative Loss Percentage for such Distribution
Date exceeds the following percentages with respect to the applicable
Distribution Date specified below:
Distribution Date Loss Percentage
----------------- ---------------
October 2005-September 2006 2.25% for the first month, plus an
additional 1/12 of 1.75% for each month
thereafter
October 2006-September 2007 4.00% for the first month, plus an
additional 1/12 of 1.50% for each month
thereafter
October 2007-September 2008 5.50% for the first month, plus an
additional 1/12 of 1.00% for each month
thereafter
October 2008-September 2009 6.50% for the first month, plus an
additional 1/12 of 0.25% for each month
thereafter
October 2009 and thereafter 6.75%
CUT-OFF DATE: The close of business on August 31, 2002 (or with respect
to any Mortgage Loan originated or otherwise acquired by an Originator after
August 31, 2002, the date of origination or acquisition of such Mortgage Loan).
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction of the Monthly Payment due on such Mortgage
Loan in a proceeding under the United States Bankruptcy Code, except such a
reduction that constitutes a Deficient Valuation or 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 United States Bankruptcy
Code.
9
DELETED MORTGAGE LOAN: A Mortgage Loan replaced by or to be replaced by
a Qualified Substitute Mortgage Loan.
DELINQUENCY RATIO: With respect to any Distribution Date, the
percentage equivalent of a fraction (a) the numerator of which equals the
aggregate Principal Balances of all Mortgage Loans that are 60 or more days
Delinquent, in foreclosure, converted to REO Property or in bankruptcy and are
60 or more days Delinquent, as of the last day of the related Due Period and (b)
the denominator of which is the Aggregate Principal Balance of the Mortgage
Loans as of the last day of the related Due Period.
DELINQUENCY TRIGGER EVENT: The event that occurs when the Rolling Three
Month Delinquency Rate exceeds 50% of the Senior Enhancement Percentage.
DELINQUENT: A Mortgage Loan is "delinquent" if any payment due thereon
is not made by the close of business on the day such payment is scheduled to be
due. A Mortgage Loan is "30 days delinquent" if such payment has not been
received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on.
DEPOSITOR: Credit Suisse First Boston Mortgage Securities Corp., a
Delaware corporation, and any successor thereto.
DEPOSITORY: The Depository Trust Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and any successor Depository hereafter named.
DIRECT PARTICIPANT: Any broker-dealer, bank or other financial
institution for which the Depository holds Offered Certificates from time to
time as a securities depository.
DISTRIBUTION ACCOUNT: The Distribution Account established in
accordance with Section 6.01(a) hereof and maintained by the Trustee.
DISTRIBUTION DATE: The 15th day of any month or if such 15th day is not
a Business Day, the first Business Day immediately following, commencing on
October 15, 2002.
DUE DATE: With respect to each Mortgage Loan and any Distribution Date,
the day of the calendar month preceding the calendar month in which such
Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was
due.
DUE PERIOD: With respect to each Distribution Date, the calendar month
preceding the related Distribution Date.
ELIGIBLE ACCOUNT: Either (A) an account or accounts maintained with an
institution (which may include the Trustee, provided such institution otherwise
meets these requirements) whose deposits are insured by the FDIC, the unsecured
and uncollateralized debt obligations of which institution shall be rated "AA"
or better by S&P and "Aa2" or better by Moody's and in the highest short term
rating category by S&P and Moody's, and which is (i) a federal savings and loan
association duly organized, validly existing and in good standing under the
federal banking laws, (ii) an institution (including the Trustee) duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or (v) approved in writing by the Rating
Agencies or (B) a trust account or accounts maintained with the trust department
of a federal or state chartered depository institution or trust company (which
may include the Trustee, provided that the Trustee otherwise meets these
requirements), having capital and surplus of not less than $50,000,000, acting
in its fiduciary capacity.
10
ERISA: As defined in Section 4.02(n) hereof.
EVENT OF DEFAULT: As described in Section 7.01.
EXCESS INTEREST: For any Distribution Date, the sum of (x) the amount,
if any, specified in Section 6.05(a)(viii) hereof for such Distribution Date and
(y) the Excess Overcollateralized Amount for such Distribution Date.
EXCESS OVERCOLLATERALIZED AMOUNT: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralized Amount that would apply
on such Distribution Date after taking into account all distributions that would
be made on such Distribution Date (other than the Overcollateralization
Reduction Amounts) over (b) the Specified Overcollateralization Amount.
FDIC: The Federal Deposit Insurance Corporation, and any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, and any successor
thereto.
FINAL CERTIFICATION: As defined in Section 2.06(b) hereof.
FINAL SCHEDULED MATURITY DATE: With respect to any Class of Offered
Certificates (other than the Class A-IO Certificates), the Distribution Date
occurring in the month specified below:
Final Scheduled
Class Maturity Date
----- -------------
A September 2033
M-1 September 2033
M-2 September 2033
B September 2033
FNMA: The Federal National Mortgage Association, and any successor
thereto.
FORECLOSURE PROFITS: As to any Servicer Remittance Date, the excess, if
any, of (i) Net Liquidation Proceeds in respect of each Mortgage Loan that
became a Liquidated Mortgage Loan during the related Due Period over (ii) the
sum of the unpaid Principal Balance of each such Liquidated Mortgage Loan plus
accrued and unpaid interest at the applicable Mortgage Interest Rate on the
unpaid Principal Balance thereof from the Due Date to which interest was last
paid by the Mortgagor (or, in the case of a Liquidated Mortgage Loan that had
been an REO Mortgage Loan, from the Due Date to which interest was last deemed
to have been paid pursuant to Section 5.06 to the first day of the month
following the month in which such Mortgage Loan became a Liquidated Mortgage
Loan).
11
GAAP: Generally accepted accounting principles, consistently applied,
as of the date of such application.
INDEMNIFICATION AGREEMENT: The Indemnification Agreement, dated
September 23, 2002, among the Representative, the Depositor, the Unaffiliated
Seller and the Originators.
INDIRECT PARTICIPANT: Any financial institution for whom any Direct
Participant holds an interest in an Offered Certificate.
INITIAL CERTIFICATION: As defined in Section 2.06(a) hereof.
INSURANCE POLICIES: All insurance policies insuring any Mortgage Loan
or Mortgaged Property to the extent the Trust or the Trustee has any interest
therein.
INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to any
insurance policy covering a Mortgage Loan to the extent such proceeds are not
applied to the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with Accepted Servicing Practices.
INTEREST REMITTANCE AMOUNT: With respect to any Distribution Date, the
sum, without duplication, of:
(i) all scheduled installments of interest due (or advanced by
the Servicer) on the Mortgage Loans during the related Due Period; plus
(ii) Compensating Interest paid by the Servicer on the related
Servicer Remittance Date; plus
(iii) the interest component of all related Substitution
Adjustments and Loan Repurchase Prices; plus
(iv) the interest component, if any, of all Insurance Proceeds
and Liquidation Proceeds received by the Servicer during the related
Due 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 Periodic Advances and Servicing Advances,
if any); plus
(v) the interest component of the proceeds of any termination
of the Trust Fund; plus
12
(vi) any Special Advance amounts transferred to the
Distribution Account pursuant to Section 5.18(b) hereof; minus
(vii) to the extent previously retained by the Servicer, the
Servicing Fee for the related Due Period, together with amounts in
reimbursement for Periodic Advances or Servicing 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.
INTEREST RESERVE ACCOUNT: The Interest Reserve Account established in
accordance with Section 6.01(a) hereof and maintained by the Trustee.
LIQUIDATED LOAN LOSS: With respect to any Servicer Remittance Date as
of the related Due Date, an amount equal to the excess of (i) the unpaid
principal balance of a Liquidated Mortgage Loan, plus accrued interest thereon
in accordance with the amortization schedule at the time applicable thereto at
the applicable Mortgage Interest Rate from the Due Date as to which interest was
last paid with respect thereto through the last day of the month in which such
Mortgage Loan became a Liquidated Mortgage Loan, over (ii) Net Liquidation
Proceeds with respect to such Liquidated Mortgage Loan.
LIQUIDATED MORTGAGE LOAN: A Mortgage Loan with respect to which the
related Mortgaged Property has been acquired, liquidated or foreclosed and with
respect to which the Servicer determines that all Liquidation Proceeds which it
expects to recover have been recovered.
LIQUIDATION EXPENSES: Without limitation, expenses incurred by the
Servicer in connection with the liquidation of any Liquidated Mortgage Loan or
property acquired in respect thereof (including, without limitation, legal fees
and expenses, committee or referee fees, and, if applicable, brokerage
commissions and conveyance taxes), any unreimbursed amount expended by the
Servicer pursuant to Sections 5.04 and 5.06 hereof in respect of the related
Mortgage Loan and any unreimbursed expenditures for real property taxes or for
property restoration or preservation of the related Mortgaged Property.
Liquidation Expenses shall not include any previously incurred expenses in
respect of an REO Mortgage Loan which have been netted against related REO
Proceeds. In no event may Liquidation Expenses with respect to a Liquidated
Mortgage Loan exceed the related Liquidation Proceeds.
LIQUIDATION PROCEEDS: The amount (other than Insurance Proceeds)
received by the Servicer in connection with (i) the taking of all or a part of
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan through a trustee's sale,
foreclosure sale, REO Disposition or otherwise or (iii) the liquidation of any
other security for such Mortgage Loan, including, without limitation, pledged
equipment, inventory and working capital and assignments of rights and interests
made by the related mortgagor.
LOAN REPURCHASE PRICE: As defined in Section 2.06(c).
MAJORITY CERTIFICATEHOLDERS: For so long as any of the Offered
Certificates are outstanding, the Holder or Holders of Offered Certificates
evidencing Percentage Interests in excess of 51% in the aggregate, and
thereafter, the Holder or Holders of Class R Certificates evidencing Percentage
Interests in excess of 51% in the aggregate.
13
MASTER REMIC: As defined in Section 2.07.
MASTER REMIC REGULAR INTERESTS: As defined in Section 2.07.
MONTHLY PAYMENT: As to any Mortgage Loan (including any REO Mortgage
Loan) and any Due Date, the payment of principal and interest due thereon as
specified for such Due Date in the related amortization schedule at the time
applicable thereto (after adjustment for any Deficient Valuations occurring
prior to such Due Date but before any adjustment to such amortization schedule
by reason of any bankruptcy, other than Deficient Valuations or similar
proceeding or any moratorium or similar waiver or grace period).
MONTHLY SERVICING FEE: As defined in Section 5.08 hereof.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc., a corporation organized and
existing under Delaware law, or any successor thereto and if such corporation no
longer for any reason performs the services of a securities rating agency,
"Moody's" shall be deemed to refer to any other nationally recognized rating
agency designated by the Depositor.
MORTGAGE: The mortgage, deed of trust or other instrument creating a
first or second lien on the Mortgaged Property.
MORTGAGED PROPERTY: The underlying property or properties securing a
Mortgage Loan, consisting of a fee simple estate in such real property.
MORTGAGE FILE: As described in Exhibit G.
MORTGAGE INTEREST RATE: As to any Mortgage Loan, the per annum fixed
rate at which interest accrues on the unpaid principal balance thereof as set
forth on the related Mortgage Note.
MORTGAGE LOAN INTEREST SHORTFALL: With respect to any Distribution
Date, as to any Mortgage Loan, the sum of (a) any Prepayment Interest Shortfall
for which no payment of Compensating Interest is paid and (b) any Civil Relief
Act Interest Shortfall in respect of such Mortgage Loan for such Distribution
Date.
MORTGAGE LOAN POOL: Those Mortgage Loans listed on the Mortgage Loan
Schedule.
MORTGAGE LOANS: The Mortgage Loans, together with any Qualified
Substitute Mortgage Loans submitted therefor in accordance with this Agreement,
as from time to time are held as a part of the Trust Fund. When used in respect
of any Distribution Date, the term Mortgage Loans shall mean all Mortgage Loans
(including those in respect of which the Trustee has acquired the related
Mortgaged Property) which have not been repaid in full prior to the related Due
Period, did not become Liquidated Mortgage Loans prior to such related Due
Period or were not repurchased or replaced by the Unaffiliated Seller prior to
such related Due Period.
14
MORTGAGE LOAN SCHEDULE: The initial schedule of Mortgage Loans as of
the Cut-Off Date as attached hereto as Schedule I, which will be deemed to be
modified automatically upon any replacement, sale, substitution, liquidation,
transfer or addition of any Mortgage Loan pursuant to the terms hereof. The
initial Mortgage Loan Schedule sets forth as to each Mortgage Loan: (i) its
identifying number and the name of the related Mortgagor; (ii) the billing
address for the related Mortgaged Property including the state and zip code;
(iii) its date of origination; (iv) the original number of months to stated
maturity; (v) the original stated maturity; (vi) the original Principal Balance;
(vii) the Principal Balance as of the Cut-Off Date; (viii) the Mortgage Interest
Rate; and (ix) the scheduled monthly payment of principal and interest.
MORTGAGE NOTE: The original, executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGED PROPERTY: The underlying property or properties securing a
Mortgage Loan, consisting of a fee simple interest in such real property.
MORTGAGOR: The obligor on a Mortgage Note.
NET FORECLOSURE PROFITS: As to any Servicer Remittance Date, the
excess, if any, of (i) the aggregate Foreclosure Profits with respect to such
Servicer Remittance Date over (ii) Liquidated Loan Losses with respect to such
Servicer Remittance Date.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses and net of any unreimbursed
Periodic Advances made by the Servicer out of its own funds. For all purposes of
this Agreement, Net Liquidation Proceeds shall be allocated first to accrued and
unpaid interest on the related Mortgage Loan and then to the unpaid principal
balance thereof.
NET REO PROCEEDS: As to any REO Mortgage Loan, REO Proceeds net of any
related expenses of the Servicer.
NET WAC CAP: As of any Distribution Date, the Net Weighted Average
Mortgage Interest Rate less the product of (a) 7.00% per annum and (b) a
fraction, the numerator of which is the Class A-IO Notional Balance for that
Distribution Date and the denominator of which is the Aggregate Principal
Balance of the Mortgage Loans as of the beginning of the related Due Period.
Net WAC CAP CARRYOVER AMOUNT: With respect to each Class of the Capped
Certificates and any Distribution Date, the sum of (a) the excess, if any, of
the Class Monthly Interest Amount for such Class, calculated at the applicable
Pass-Through Rate without regard to the Net WAC Cap, over the Class Monthly
Interest Amount for such Class for the applicable Distribution Date, (b) any Net
WAC Cap Carryover Amount remaining unpaid from prior Distribution Dates, and (c)
one month's interest on the amount in clause (b) calculated at the applicable
Pass-Through Rate without regard to the Net WAC Cap.
15
NET WEIGHTED AVERAGE MORTGAGE INTEREST RATE: With respect to any Due
Period, the weighted average Mortgage Interest Rates (weighted by Principal
Balances) of the Mortgage Loans, calculated at the opening of business on the
first day of such Due Period, less the rate at which the Servicing Fee is then
calculated, less the rate at which the Back-up Servicing Fee is then calculated,
less the rate at which the Trustee Fee is then calculated, less any taxes
imposed on any REMIC created hereunder pursuant to Section 11.15(a) herein.
NONRECOVERABLE ADVANCES: With respect to any Mortgage Loan, (a) any
Periodic Advance previously made and not reimbursed from late collections
pursuant to Section 5.03, or (b) a Periodic Advance proposed to be made in
respect of a Mortgage Loan or REO Property either of which, in the good faith
business judgment of the Servicer, as evidenced by an Officer's Certificate
delivered to the Trustee no later than the Business Day following such
determination, would not ultimately be recoverable pursuant to Sections 5.03.
OC FLOOR: 0.50% of the Original Aggregate Principal Balance of the
Mortgage Loans.
OFFERED CERTIFICATES: The Senior Certificates and the Subordinate
Certificates.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, the President or a Vice President, the Treasurer, the Secretary or one of
the Assistant Treasurers or Assistant Secretaries of the Unaffiliated Seller
and/or the Servicer, or the Depositor, as required by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may, without
limitation, be counsel for the Unaffiliated Seller, the Servicer, the Trustee, a
Certificateholder or a Certificateholder's prospective transferee (including
except as otherwise provided herein, in-house counsel) reasonably acceptable to
each addressee of such opinion and experienced in matters relating to the
subject of such opinion; except that any opinion of counsel relating to (a) the
qualification of any of the REMICs described in Section 2.07 hereof as a REMIC
or (b) compliance with the REMIC Provisions must be an opinion of counsel who
(i) is in fact independent of the Unaffiliated Seller, the Servicer and the
Trustee, (ii) does not have any direct financial interest or any material
indirect financial interest in the Unaffiliated Seller or the Servicer or the
Trustee or in an Affiliate thereof, (iii) is not connected with the Unaffiliated
Seller or the Servicer or the Trustee as an officer, employee, director or
person performing similar functions and (iv) is reasonably acceptable to the
Trustee.
ORIGINAL AGGREGATE PRINCIPAL BALANCE: The Aggregate Principal Balance
of the Mortgage Loan Pool on the Closing Date, calculated as of the Cut-Off
Date, which amount is equal to $370,000,089.05.
ORIGINAL CERTIFICATE PRINCIPAL BALANCE: As of the Startup Day and with
respect to each Class of Certificates, the amount set forth below:
Original Certificate
Class Principal Balance
---------- --------------------
A $321,900,000
M-1 $22,200,000
M-2 $18,500,000
B $7,400,000
16
The Class A-IO, Class X and Class R Certificates do not have an Original
Certificate Principal Balance.
ORIGINATORS: American Business Credit, Inc., HomeAmerican Credit, Inc.,
d/b/a Upland Mortgage and American Business Mortgage Services, Inc.
OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any Distribution
Date, the lesser of (x) the Excess Interest for such Distribution Date and (y)
the Specified Overcollateralization Amount for such Distribution Date minus the
Overcollateralized Amount for such Distribution Date.
OVERCOLLATERALIZATION REDUCTION AMOUNT: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount for such Distribution Date and (b) the Principal
Remittance Amount for such Distribution Date.
OVERCOLLATERALIZED AMOUNT: With respect to any Distribution Date, the
excess, if any, of (a) the Aggregate Principal Balance of the Mortgage Loans as
of the close of business on the last day of the related Due Period, over (b) the
aggregate Certificate Principal Balance of the Offered Certificates as of such
Distribution Date (after taking into account the payment of the Principal
Distribution Amount on such Distribution Date except for any portion thereof
related to any Overcollateralization Increase Amount).
OWNER-OCCUPIED MORTGAGED PROPERTY: A Residential Dwelling as to which
(a) the related Mortgagor represented an intent to occupy as such Mortgagor's
primary, secondary or vacation residence at the origination of the Mortgage
Loan, and (b) the Unaffiliated Seller has no actual knowledge that such
Residential Dwelling is not so occupied.
OWNERSHIP INTEREST: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
PASS-THROUGH RATE: The Class A, Class A-IO, Class M-1, Class M-2, and
Class B Pass-Through Rate and, for the purposes of Section 2.07, the
pass-through rate for any class of interests referenced in Section 2.07.
PERCENTAGE INTEREST: With respect to any Offered Certificate, other
than a Class A-IO Certificate, the portion evidenced by such Certificate,
expressed as a percentage rounded to four decimal places, equal to a fraction
the numerator of which is the denomination represented by such Certificate and
the denominator of which is the Original Certificate Principal Balance of such
Class. With respect to a Class A-IO, Class X or Class R Certificate, the portion
evidenced thereby as stated on the face of such Certificate.
17
PERIODIC ADVANCE: The aggregate of the advances required to be made by
the Servicer on any Servicer Remittance Date pursuant to Section 5.18 hereof,
the amount of any such advances being equal to the sum of:
(a) with respect to each Mortgage Loan that was Delinquent as
of the close of business on the last day of the Due Period preceding
the related Servicer Remittance Date, the product of (i) the Principal
Balance of such Mortgage Loan and (ii) one-twelfth of the Mortgage
Interest Rate for such Mortgage Loan net of the Servicing Fee; and
(b) with respect to each REO Property which was acquired
during or prior to the related Due Period and as to which an REO
Disposition did not occur during the related Due Period, an amount
equal to the excess, if any, of (i) interest on the Principal Balance
of such REO Mortgage Loan at the Mortgage Interest Rate for such REO
Mortgage Loan net of the Servicing Fee, for the most recently ended Due
Period over (ii) the net income from the REO Property transferred to
the Distribution Account for such Distribution Date;
provided, however, that in each such case such advance has not been determined
by the Servicer to be a Nonrecoverable Advance.
PERMITTED INVESTMENTS: As used herein, Permitted Investments shall
include the following:
(i) obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than three months from the date of acquisition
thereof, provided that the unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated in one of the two
highest rating categories by the Rating Agencies;
(iii) certificates of deposit, time deposits and bankers'
acceptances (which, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days) of any U.S.
depository institution or trust company, incorporated under the laws of
the United States or any state; provided, that the debt obligations of
such depository institution or trust company at the date of acquisition
thereof have been rated in one of the two highest rating categories by
the Rating Agencies;
(iv) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated in the highest short-term rating category by the Rating
Agencies;
18
(v) the JPMorgan Funds U.S. Government Money Market Fund, the
JPMorgan Prime Money Market Fund and the JPMorgan Treasury Plus Fund,
so long as any such fund is rated in the highest rating category by
▇▇▇▇▇'▇ or S&P;
provided, that each such Permitted Investment shall be a "permitted investment"
within the meaning of Section 860G(a)(5) of the Code and that no instrument
described hereunder shall evidence either the right to receive (x) only interest
with respect to the obligations underlying such instrument or (y) both principal
and interest payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument provided a
yield to maturity at par greater than 120% of the yield to maturity at par of
the underlying obligations; provided, further, that no instrument described
hereunder may: (x) be purchased at a price greater than par if such instrument
may be prepaid or called at a price less than its purchase price prior to stated
maturity; or (y) provide any voting right or substantially equivalent interest
in the producer of such investment, whether directly or indirectly, through
conversion or any other manner or method. or be disposed of prior to its
maturity.
PERMITTED TRANSFEREE: Any Person other than (a) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (b) a foreign government, international organization or any
agency or instrumentality of either of the foregoing, (c) 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 Class R Certificate, (d) rural electric and telephone cooperatives described
in Section 1381(a)(2)(C) of the Code, (e) an "electing large partnership" within
the meaning Section 775 of the Code and (f) any other Person so designated by
the Trustee based upon an Opinion of Counsel to the Trustee that the transfer of
an Ownership Interest in a Class R Certificate to such Person may cause either
(i) any of the REMICs described in Section 2.07 hereof to fail to qualify as a
REMIC at any time that the Offered Certificates or Class X Certificates are
outstanding or (ii) the Trust Fund or any Person having an Ownership Interest in
any Class of Certificates, other than such Person, to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the Transfer of an Ownership Interest in a Class R Certificate to such Person.
The terms "United States," "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions. 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 FHLMC, a majority of
its board of directors is not selected by such governmental unit.
PERSON: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, national banking association,
unincorporated organization or government or any agency or political subdivision
thereof.
PLAN: As defined in Section 4.02(n).
PREPAYMENT ASSUMPTION: A constant prepayment rate of 23% HEP for the
Offered Certificates and Class X Certificates used solely for determining the
accrual of original issue discount and market discount on the Certificates for
federal income tax purposes.
19
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date,
for each Mortgage Loan that was the subject during the related Due Period of a
Principal Prepayment, an amount equal to the excess, if any, of (a) 30 days'
interest on the Principal Balance, prior to giving effect to a principal
distribution for the related Due Period, of such Mortgage Loan at a per annum
rate equal to (i) the Mortgage Interest Rate (or at such lower rate as may be in
effect for such Mortgage Loan pursuant to application of the Civil Relief Act,
any Deficient Valuation and/or any Debt Service Reduction) minus (ii) the rate
at which the Servicing Fee is calculated over (b) the amount of interest
actually remitted by the Mortgagor in connection with such Principal Prepayment
less the Servicing Fee for such Mortgage Loan in such month.
PRINCIPAL BALANCE: As to any Mortgage Loan and any date of
determination, the outstanding principal balance of such Mortgage Loan as of
such date of determination after giving effect to Principal Prepayments received
prior to the end of the related Due Period and Deficient Valuations incurred
prior to the related Due Date. The Principal Balance of a Mortgage Loan which
becomes a Liquidated Mortgage Loan on or prior to the related Due Date shall be
zero (except for purposes of calculating the Loan Repurchase Price of such
Mortgage Loan).
PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date,
will be the sum of (x) the Basic Principal Distribution Amount for such
Distribution Date and (y) the Overcollateralization Increase Amount for such
Distribution Date.
PRINCIPAL PREPAYMENT: Any payment of principal made by the Mortgagor on
a Mortgage Loan which is received in advance of its scheduled Due Date.
PRINCIPAL REMITTANCE AMOUNT: With respect to any Distribution Date will
be the sum, without duplication, of:
(1) all principal in respect of the Mortgage Loans actually
collected during the related Due Period;
(2) the Principal Balance of each Mortgage Loan that either was
repurchased by the Unaffiliated Seller or purchased by the
Servicer on the related Servicer Remittance Date, to the
extent such Principal Balance is actually received by the
Trustee;
(3) any Substitution Adjustments delivered by the Unaffiliated
Seller on the related Servicer Remittance Date in connection
with a substitution of a Mortgage Loan, to the extent such
Substitution Adjustments are actually received by the Trustee;
(4) the Net Liquidation Proceeds actually collected by the
Servicer on all Mortgage Loans during the related Due Period
(to the extent such Net Liquidation Proceeds relate to
principal);
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(5) the proceeds received by the Trustee upon the exercise by the
Servicer of its option to repurchase the Mortgage Loans on or
after the Clean-up Call Date (to the extent that such proceeds
relate to principal); and
(6) the proceeds received by the Trustee on any termination of the
Trust (to the extent such proceeds relate to principal).
PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated September 23,
2002 relating to the Offered Certificates filed with the Commission in
connection with the Registration Statement heretofore filed or to be filed with
the Commission pursuant to Rule 424(b)(2) or 424(b)(5).
QUALIFIED APPRAISER: An appraiser, duly appointed by the Unaffiliated
Seller, who had no interest, direct or indirect, in the Mortgaged Property or in
any loan made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfy the requirements of Title XI of
the Federal Institutions Reform, Recovery and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
QUALIFIED MORTGAGE: "Qualified Mortgage" shall have the meaning set
forth from time to time in the definition thereof at Section 860G(a)(3) of the
Code (or any successor statute thereto).
QUALIFIED SUBSTITUTE MORTGAGE LOAN: A mortgage loan or mortgage loans
substituted for a Deleted Mortgage Loan pursuant to Section 2.06(c) or 3.03
hereof, which (a) has or have an interest rate at least equal to that applicable
to the Deleted Mortgage Loan, (b) relates or relate to a detached one-family
residence or to the same type of Residential Dwelling or Business Purpose
Property, or any combination thereof, as the Deleted Mortgage Loan and in each
case has or have the same or a better lien priority as the Deleted Mortgage Loan
and has the same occupancy status or is an Owner Occupied Mortgaged Property,
(c) matures or mature no later than (and not more than one year earlier than)
the Deleted Mortgage Loan, (d) has or have a Loan-to-Value Ratio at the time of
such substitution no higher than the Loan-to-Value Ratio of the Deleted Mortgage
Loan, (e) has or have a Combined Loan-to-Value Ratio or Combined Loan-to-Value
Ratios at the time of such substitution no higher than the Combined
Loan-to-Value Ratio of the Deleted Mortgage Loan, (f) has or have a Principal
Balance or Principal Balances (after application of all payments received on or
prior to the date of substitution) not substantially less and not more than the
Principal Balance of the Deleted Mortgage Loan as of such date, (g) satisfies or
satisfy the criteria set forth from time to time in the definition of "qualified
replacement mortgage" at Section 860G(a)(4) of the Code (or any successor
statute thereto), and (h) complies or comply as of the date of substitution with
each representation and warranty set forth in Sections 3.01, 3.02 and 3.03 of
the Unaffiliated Seller's Agreement.
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RATING AGENCY: S&P or ▇▇▇▇▇'▇.
RATING AGENCY CONDITION: With respect to any action, written
confirmation from the Rating Agencies that such action will not result in the
withdrawal, downgrade or qualification of the then-current rating of any of the
Offered Certificates.
RECORD DATE: With respect to the Certificates, the last Business Day of
the calendar month immediately preceding the month in which a Distribution Date
occurs.
REGULAR INTEREST: As defined in Section 2.07 herein.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC I: As described in Section 2.07 herein.
REMIC I REGULAR INTERESTS: As described in Section 2.07 herein.
REMIC II: As described in Section 2.07 herein.
REMIC II Net WAC CAP: On any Distribution Date, a Pass-Through Rate
equal to the weighted average of the interest rates on the REMIC I Regular
Interests where (a) on the first Distribution Date through the Distribution Date
in December 2002, the Pass-Through Rates on Class I-B1, Class I-B2, Class I-B3,
Class I-B4, Class I-B5, Class I-B6, Class I-B7, Class I-B8, Class I-B9 and Class
I-B10 are first reduced by 7.00% (but not to less than zero); (b) from the
Distribution Date in January 2003 through the Distribution Date in March 2003,
the Pass-Through Rates on Class I-B2, Class I-B3, Class I-B4, Class I-B5, Class
I-B6, Class I-B7, Class I-B8, Class I-B9 and Class I-B10 are first reduced by
7.00% (but not to less than zero); (c) from the Distribution Date in April 2003
through the Distribution Date in June 2003, the Pass-Through Rates on Class
I-B3, Class I-B4, Class I-B5, Class I-B6, Class I-B7, Class I-B8, Class I-B9 and
Class I-B10 are first reduced by 7.00% (but not to less than zero); (d) from the
Distribution Date in July 2003 through the Distribution Date in September 2003,
the Pass-Through Rates on Class I-B4, Class I-B5, Class I-B6, Class I-B7, Class
I-B8, Class I-B9 and Class I-B10 are first reduced by 7.00% (but not to less
than zero); (e) from the Distribution Date in October 2003 through the
Distribution Date in November 2003, the Pass-Through Rates on Class I-B5, Class
I-B6, Class I-B7, Class I-B8, Class I-B9 and Class I-B10 are first reduced by
7.00% (but not to less than zero); (f) from the Distribution Date in October
2003 through the Distribution Date in March 2004, the Pass-Through Rates on
Class I-B6, Class I-B7, Class I-B8, Class I-B9 and Class I-B10 are first reduced
by 7.00% (but not to less than zero); (g) from the Distribution Date in April
2004 through the Distribution Date in June 2004, the Pass-Through Rates on Class
I-B7, Class I-B8, Class I-B9 and Class I-B10 are first reduced by 7.00% (but not
to less than zero); (h) from the Distribution Date in July 2004 through the
Distribution Date in September 2004, the Pass-Through Rates on Class I-B8, Class
I-B9, and Class I-B10 are first reduced by 7.00% (but not to less than zero);
(i) from the Distribution Date in October 2004 through the Distribution Date in
December 2004, the Pass-Through Rates on Class I-B9 and Class I-B10 are first
reduced by 7.00% (but not to less than zero); and (j) from the Distribution Date
in January 2005 through the Distribution Date in March 2005, the Pass-Through
Rate on Class I-B10 is first reduced by 7.00% (but not to less than zero).
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REMIC II REGULAR INTERESTS: As described in Section 2.07 herein.
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
temporary and final regulations promulgated thereunder and published rulings,
notices and announcements, as the foregoing may be in effect from time to time.
REMIC TRUST: The segregated pool of assets consisting of the Trust
Fund; provided, however, that the Supplemental Interest Payment Account shall
not be part of the REMIC Trust.
REO DISPOSITION: The final sale by the Servicer of a Mortgaged Property
acquired by the Servicer in foreclosure or by deed-in-lieu of foreclosure.
REO MORTGAGE LOAN: Any Mortgage Loan which is not a Liquidated Mortgage
Loan and as to which the indebtedness evidenced by the related Mortgage Note is
discharged and the related Mortgaged Property is held as part of the Trust Fund.
REO PROCEEDS: Proceeds received in respect of any REO Mortgage Loan
(including, without limitation, proceeds from the rental of the related
Mortgaged Property).
REO PROPERTY: A Mortgaged Property acquired by the Servicer in the name
of the Trustee on behalf of the Certificateholders through foreclosure or
deed-in-lieu of foreclosure.
REPRESENTATION LETTER: Letters to, or agreements with, the Depository
to effectuate a book entry system with respect to the Offered Certificates
registered in the Certificate Register under the nominee name of the Depository.
REPRESENTATIVE: Credit Suisse First Boston Corporation, as the
representative underwriter for the Underwriters listed on Schedule A to the
Underwriting Agreement.
REQUEST FOR RELEASE: A request for release in substantially the form
attached as Exhibit L hereto.
REQUIRED INFORMATION: With respect to each Mortgage Loan and any date
of determination: (a) the name and address of the obligor; (b) the aggregate
Principal Balance of the Mortgage Loan as of the end of the immediately
preceding Due Period; (c) the maturity date; and (d) the Mortgage Interest Rate
as of the end of the immediately preceding Due Period; provided, that the
Servicer's obligation to furnish any portion of the Required Information to any
Person shall not require the Servicer to fail to observe any applicable law
prohibiting disclosure of information regarding the obligors.
RESIDENTIAL DWELLING: A one- to four-family dwelling, a unit in a
planned unit development, a unit in a condominium development, a townhouse or a
manufactured housing unit which is non-mobile.
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RESPONSIBLE OFFICER: When used with respect to the Trustee, the
Collateral Agent and the Back-up Servicer, any officer assigned to the Corporate
Trust Division (or any successor thereto), including any Vice President,
Assistant Vice President, Trust Officer, any Assistant Secretary or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and 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 in each case having direct
responsibility for the administration of this Agreement. When used with respect
to the Unaffiliated Seller or the Servicer, the President or any Vice President,
Assistant Vice President, or any Secretary or Assistant Secretary.
RETAINED INTEREST: An interest in a pool of promissory notes, mortgage
loans, or other financial assets which entitles the holder to receive excess
cash flows derived from such assets after payments to senior holders of direct
or indirect beneficial or other interests in such assets as well as expenses and
other payments accorded priority in right or payment to such residual interest.
ROLLING THREE MONTH DELINQUENCY RATE: For any Distribution Date, the
percentage, equal to the average of the Delinquency Ratio for each of the three
(1 or 2 in the case of the first three Distribution Dates, as the case may be)
immediately preceding Due Periods.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
or any successor thereto and if such corporation no longer for any reason
performs the services of a securities rating agency, "S&P" shall be deemed to
refer to any other nationally recognized statistical rating organization
designated by the Depositor.
SENIOR CERTIFICATES: The Class A and Class A-IO Certificates.
SENIOR ENHANCEMENT PERCENTAGE: With respect to any Distribution Date,
the percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of the Subordinate Certificates and (ii) the
Overcollateralized Amount (in each case after taking into account the
distributions of the Principal Distribution Amount on such Distribution Date) by
(y) the Aggregate Principal Balance of the Mortgage Loans as of the last day of
the related Due Period.
SENIOR PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, (x) prior to the related Stepdown Date and on any Distribution Date
thereafter while a Trigger Event is in effect, 100% of the Principal
Distribution Amount and (y) on or after the related Stepdown Date, assuming a
Trigger Event is not in effect, the least of (i) the Principal Distribution
Amount, (ii) the excess of the Certificate Principal Balance of the Class A
Certificates immediately prior to the related Distribution Date over the lesser
of (a) 67.00% times the Aggregate Principal Balance of the Mortgage Loans on the
last day of the related Due Period and (b) the Aggregate Principal Balance of
the Mortgage Loans on the last day of the related Due Period minus the OC Floor
(but not less than zero) and (iii) the Certificate Principal Balance of the
Class A Certificates immediately prior to the related Distribution Date.
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SERVICER: American Business Credit, Inc., a Pennsylvania corporation,
or any successor appointed as herein provided.
SERVICER REMITTANCE AMOUNT: With respect to any Servicer Remittance
Date, an amount equal to the sum of (i) all collections of principal and
interest on the Mortgage Loans (including Principal Prepayments, Net REO
Proceeds and Net Liquidation Proceeds, if any) collected by the Servicer during
the related Due Period, (ii) all Periodic Advances made by the Servicer with
respect to interest payments due to be received on the Mortgage Loans on the
related Due Date and (iii) any other amounts required to be placed in the
Collection Account by the Servicer pursuant to this Agreement (including
Insurance Proceeds), but excluding the following:
(a) amounts received on particular Mortgage Loans as late
payments of interest and respecting which the Servicer has previously
made an unreimbursed Periodic Advance out of its own funds;
(b) those portions of each payment of interest on a particular
Mortgage Loan which represent the Servicing Fee;
(c) that portion of Liquidation Proceeds and REO Proceeds to
the extent of any unpaid Servicing Fee;
(d) all income from Permitted Investments that is held in the
Collection Account for the account of the Servicer;
(e) all amounts in respect of late fees, assumption fees,
prepayment fees and similar fees;
(f) certain other amounts which are reimbursable to the
Servicer, as provided in this Pooling and Servicing Agreement; and
(g) Net Foreclosure Profits.
SERVICER REMITTANCE DATE: With respect to any Distribution Date, the
10th day of the month in which such Distribution Date occurs, or if such 10th
day is not a Business Day, the Business Day preceding such 10th day.
SERVICER REMITTANCE REPORT: As defined in Section 6.07 hereof.
SERVICER TERMINATION LOSS TRIGGER EVENT: With respect to any
Distribution Date, the event that occurs if the Cumulative Loss Percentage for
such Distribution Date exceeds the following percentages with respect to the
applicable Distribution Date specified below:
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Distribution Date Loss Percentage
----------------- ---------------
October 2005-September 2006 3.50% for the first month, plus an
additional 1/12 of 1.75% for each month
thereafter
October 2006-September 2007 5.25% for the first month, plus an
additional 1/12 of 1.50% for each month
thereafter
October 2007-September 2008 6.75% for the first month, plus an
additional 1/12 of 1.00% for each month
thereafter
October 2008-September 2009 7.75% for the first month, plus an
additional 1/12 of 0.25% for each month
thereafter
October 2009 and thereafter 8.00%
SERVICING ADVANCES: All reasonable and customary "out-of-pocket" costs
and expenses (including legal fees) incurred in the performance by the Servicer
of its servicing obligations, including, but not limited to, the cost and
expenses relating to (a) the preservation, restoration, inspection and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of the
REO Property, including reasonable fees paid to any independent contractor in
connection therewith, (d) compliance with the obligations under Section 5.22,
all of which reasonable and customary out-of-pocket costs and expenses are
reimbursable to the Servicer to the extent provided in Sections 5.03 and 5.22.
SERVICING COMPENSATION: The Servicing Fee and other amounts to which
the Servicer is entitled pursuant to Section 5.08.
SERVICING FEE: As to each Mortgage Loan, the annual fee payable to the
Servicer, which is calculated as an amount equal to the product of (a) 0.50% per
annum, and (b) the Principal Balance thereof (or, in the case of any successor
Servicer, such other amount as the Trustee and such successor may agree upon in
writing; provided, however, that the rate at which such amount is calculated
shall not exceed 0.50% per annum unless the Rating Agency Condition is
satisfied; provided, further, however, that if the Back-up Servicer is acting as
successor Servicer in no event shall the Servicing Fee be less than the amount
paid to the initial Servicer hereunder). Such fee shall be calculated and
payable monthly only from the amounts received in respect of interest on such
Mortgage Loan and shall be computed on the basis of the same principal amount
and for the period respecting which any related interest payment on a Mortgage
Loan is computed. The Servicing Fee includes any servicing fees owed or payable
to any Subservicer.
SERVICING OFFICER: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee and the Certificateholders by the Servicer on the Closing Date, as
such list may from time to time be amended.
SPECIAL ADVANCE: As defined in Section 5.18(b) hereof.
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SPECIFIED OVERCOLLATERALIZATION AMOUNT: With respect to any
Distribution Date, (i) prior to the Stepdown Date 3.50% of the Aggregate
Principal Balance of the Mortgage Loans as of the Cut-Off Date or (ii) on or
after the Stepdown Date 7.00% of the Aggregate Principal Balance of the Mortgage
Loans as of the end of the related Due Period; provided, that the Specified
Overcollateralization Amount shall never be less than the OC Floor.
STARTUP DAY: The day designated as such pursuant to Section 2.07(e)
hereof.
Stepdown Date: The earlier to occur of (i) the Distribution Date on
which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero and (ii) the later to occur of (a) the Distribution
Date in October 2005 and (b) the first Distribution Date on which the
Certificate Principal Balance of the Class A Certificates (after giving effect
to the distribution of the Principal Remittance Amount on the Certificates on
such Distribution Date) is less than or equal to 67.00% of the Aggregate
Principal Balance of the Mortgage Loans on the last day of the related Due
Period.
SUBORDINATE CERTIFICATES: The Class M-1, Class M-2 and Class B
Certificates.
SUBSERVICERS: HomeAmerican Credit, Inc., d/b/a Upland Mortgage, a
Pennsylvania corporation, or its successor in interest and American Business
Mortgage Services, Inc., a New Jersey corporation, or its successor in interest.
SUBSERVICING AGREEMENT: The agreement between the Servicer and the
Subservicers relating to subservicing and/or administration of certain Mortgage
Loans as provided in Section 5.13, a copy of which shall be delivered, along
with any modifications thereto, to the Trustee.
SUBSTITUTION ADJUSTMENT: As to any date on which a substitution occurs
pursuant to Sections 2.06 or 3.03 hereof, the amount (if any) by which the
aggregate unpaid principal balance (after application of principal payments
received on or before the date of substitution) of any Qualified Substitute
Mortgage Loans as of the date of substitution, are less than the aggregate of
the Principal Balances of the related Deleted Mortgage Loans together with 30
days' interest thereon at the Mortgage Interest Rate.
SUPPLEMENTAL INTEREST PAYMENT ACCOUNT: The Eligible Account established
and maintained in accordance to Section 6.10.
SUPPLEMENTAL INTEREST PAYMENT AMOUNT AVAILABLE: The amount, if any, on
deposit in the Supplemental Interest Payment Account on any Distribution Date.
SUPPLEMENTAL INTEREST RIGHT: The right of the Holders of the Capped
Certificates to receive Net WAC Cap Carryover Amounts in accordance with Section
6.10.
SUPPLEMENTAL INTEREST TRUST: The trust established in accordance with
Section 6.10 to hold the Supplemental Interest Payment Account. The Supplemental
Interest Trust will not be an asset of any REMIC.
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TAX MATTERS PERSON: The Person or Persons appointed pursuant to Section
11.15 from time to time to act as the "tax matters person" (within the meaning
of the REMIC Provisions) for each of the REMICs created hereunder.
TAX RETURN: The federal income tax return on Internal Revenue Service
Form 1066, "U.S. Real Estate Mortgage Investment Conduit Income Tax Return,"
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of each REMIC created hereunder due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provision of federal, state or local tax laws.
TRANSFER: Any direct or indirect transfer, sale, pledge, hypothecation
or other form of assignment of any Ownership Interest in a Certificate.
TRANSFER AFFIDAVIT AND AGREEMENT: As defined in Section 4.02(l)(ii).
TRANSFEREE: Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
TRANSFEROR: Any Person who is disposing by Transfer any Ownership
Interest in a Certificate.
Trigger Event: Either a Delinquency Trigger Event or Cumulative Loss
Trigger Event.
TRUST: ABFS Mortgage Loan Trust 2002-3, the express trust created
hereunder in Section 2.01(a).
TRUSTEE: JPMorgan Chase Bank, a New York banking corporation, or its
successor-in-interest, or any successor trustee appointed as herein provided.
TRUSTEE FEE: As to any Distribution Date, the fee payable to the
Trustee in respect of its services as Trustee that accrues at a monthly rate
equal to one-twelfth of 0.00625% on the Principal Balance of each Mortgage Loan
as of the immediately preceding Due Date.
TRUSTEE'S MORTGAGE FILE: The documents delivered to the Trustee or its
designated agent pursuant to Section 2.05.
TRUSTEE'S REMITTANCE REPORT: As defined in Section 6.07.
TRUST FUND: The segregated pool of assets subject hereto, constituting
the trust created hereby and to be administered hereunder, consisting of: (i)
such Mortgage Loans as from time to time are subject to this Agreement, together
with the Mortgage Files relating thereto, and together with all principal
collected and interest due and accruing thereon after the related Cut-Off Date,
and any proceeds thereof; (ii) any REO Property, together with all collections
thereon and proceeds thereof; (iii) the Trustee's rights with respect to the
Mortgage Loans under all insurance policies required to be maintained pursuant
to this Agreement and any proceeds thereof; any other security for such Mortgage
Loan, including, without limitation, pledged equipment, inventory and working
capital and assignments of rights and interests made by the related mortgagor;
(v) the rights and remedies of the Trustee against any Person making any
representation or warranty to the Trustee hereunder, to the extent provided
herein; (vi) all rights of the Depositor under the Unaffiliated Seller's
Agreement; (vii) each Account and such assets that are deposited therein from
time to time and any investments thereof, together with any and all income,
proceeds and payments with respect thereto; and (viii) all proceeds of the
foregoing.
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UNAFFILIATED SELLER: ABFS 2002-3, Inc.
UNAFFILIATED SELLER'S AGREEMENT: The Unaffiliated Seller's Agreement,
dated as of the date hereof, among the Unaffiliated Seller, the Originators and
the Depositor relating to the sale of the Mortgage Loans from the Originators to
the Unaffiliated Seller and from the Unaffiliated Seller to the Depositor.
UNDERWRITERS: The Representative and Bear, ▇▇▇▇▇▇▇ & Co., Inc.
UNDERWRITING AGREEMENT: The Underwriting Agreement, dated as of
September 23, 2002 between the Depositor and the Representative.
UNITED STATES PERSON: A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States, any state thereof or the District of Columbia, an
estate whose income from sources without the United States is includible in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States or a
trust if a court within the United States can exercise primary jurisdiction over
its administration and at least one United States fiduciary has the authority to
control all substantial decisions of the trust.
WAC EXCESS: The sum of the Net WAC Cap Carryover Amounts allocable to
each of the Capped Certificates.
Section 1.02 Provisions of General Application. (a) All accounting
terms not specifically defined herein shall be construed in accordance with
GAAP.
(b) The terms defined in this Article include the plural as well as the
singular.
(c) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole. All references to Articles
and Sections shall be deemed to refer to Articles and Sections of this
Agreement.
(d) Any reference to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the statute to which
reference is made and all regulations promulgated pursuant to such statutes.
29
(e) All calculations of interest (other than with respect to the
Mortgage Loans) provided for herein shall be made on the basis of a 360-day year
consisting of twelve 30-day months. All calculations of interest with respect to
any Mortgage Loan provided for herein shall be made in accordance with the terms
of the related Mortgage Note and Mortgage or, if such documents do not specify
the basis upon which interest accrues thereon, on the basis of a 360-day year
consisting of twelve 30-day months, to the extent permitted by applicable law.
(f) Any Mortgage Loan payment is deemed to be received on the date such
payment is actually received by the Servicer; provided, however, that for
purposes of calculating distributions on the Certificates prepayments with
respect to any Mortgage Loan are deemed to be received on the date they are
applied in accordance with Accepted Servicing Practices consistent with the
terms of the related Mortgage Note and Mortgage to reduce the outstanding
principal balance of such Mortgage Loan on which interest accrues.
Section 1.03 Business Day Certificate. On the Closing Date (with
respect to the calendar year 2002) and thereafter, within 15 days prior to the
end of each calendar year while this Agreement remains in effect (with respect
to the succeeding calendar years), the Servicer shall provide to the Trustee and
the Depositor a certificate of a Servicing Officer specifying the days on which
banking institutions in the State of Pennsylvania are authorized or obligated by
law, executive order or governmental decree to be closed.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SALE AND CONVEYANCE OF THE TRUST FUND
Section 2.01 Establishment of the Trust. (a) The Depositor does hereby
establish, pursuant to the further provisions of this Agreement and the laws of
the State of New York, an express trust to be known, for convenience, as "ABFS
Mortgage Loan Trust 2002-3" and does hereby appoint JPMorgan Chase Bank as
Trustee in accordance with the provisions of this Agreement.
(b) The Trust may perform the following permitted activities:
(i) hold receivables transferred from the Unaffiliated Seller and other
passive assets of the Trust, which assets can not be contrary to the status of
the Trust as a qualified special purpose entity under existing accounting
literature, including passive derivative financial instruments that pertain to
beneficial interests issued or sold to parties other than the Unaffiliated
Seller, its affiliates or agents;
(ii) issue Certificates and other interests in the Trust;
(iii) receive collections and make payments on such Certificates and
interests in accordance with the terms of this Agreement; and
30
(iv) engage in other activities that are necessary or incidental to
accomplish these limited purposes, which activities can not be contrary to the
status of the Trust as a qualified special purpose entity under existing
accounting literature.
Section 2.02 Purchase and Sale of Mortgage Loans. The Depositor does
hereby sell, transfer, assign, set over and convey to the Trustee, on behalf of
the Trust, without recourse but subject to the terms and provisions of this
Agreement, all of the right, title and interest of the Depositor in and to the
Mortgage Loans, including the outstanding principal as of and interest due and
accruing after the Cut-Off Date on such Mortgage Loans, and all other assets
included or to be included in the Trust Fund for the benefit of the
Certificateholders. In connection with such transfer and assignment, and
pursuant to Section 2.07 of the Unaffiliated Seller's Agreement, the Depositor
does hereby also irrevocably transfer, assign, set over and otherwise convey to
the Trustee, on behalf of the Trust, all of its rights under the Unaffiliated
Seller's Agreement, including, without limitation, its right to exercise the
remedies created by Sections 2.06 and 3.05 of the Unaffiliated Seller's
Agreement for defective documentation and for breaches of representations and
warranties, agreements and covenants of the Unaffiliated Seller and the
Originators contained in Sections 3.01, 3.02 and 3.03 of the Unaffiliated
Seller's Agreement.
Section 2.03 [RESERVED]
Section 2.04 Possession of Mortgage Files; Access to Mortgage Files.
(a) Upon the issuance of the Certificates, the ownership of each Mortgage Note,
the Mortgage and the contents of the related Mortgage File related to each
Mortgage Loan is vested in the Trustee for the benefit of the
Certificateholders.
(b) Pursuant to Section 2.05 of the Unaffiliated Seller's Agreement,
the Depositor has delivered or caused to be delivered the Trustee's Mortgage
File related to each Mortgage Loan to the Trustee.
(c) The Collateral Agent, on behalf of the Trustee, will be the
custodian or may, with the consent of the Servicer, enter into a custodial
agreement pursuant to which the Trustee will appoint a custodian to hold the
Mortgage Files in trust for the benefit of all present and future
Certificateholders; provided, however, that the custodian so appointed shall
satisfy the eligibility requirements for the Collateral Agent as described in
Section 10.06 hereof, shall in no event be the Depositor or the Servicer or any
Person known to a Responsible Officer of the Trustee to be an Affiliate of the
Depositor or the Servicer and shall be approved by the Servicer.
(d) The Collateral Agent shall afford the Depositor, the Servicer and
the Back-up Servicer reasonable access to all records and documentation
regarding the Mortgage Loans relating to this Agreement, such access being
afforded upon reasonable request and during normal business hours at the offices
of the Collateral Agent at customary charges.
Section 2.05 Delivery of Mortgage Loan Documents. (a) In connection
with the transfer and assignment of the Mortgage Loans, the Depositor does
hereby with respect to the Mortgage Loans, deliver or cause to be delivered to
the Collateral Agent, on behalf of the Trustee the following documents or
instruments with respect to each Mortgage Loan so transferred or assigned:
31
(i) the original Mortgage Note, endorsed without recourse in
blank by the related Originator, including all intervening endorsements
showing a complete chain of endorsement;
(ii) the related Mortgage with evidence of recording indicated
thereon or a copy thereof certified by the applicable recording office;
(ii) the recorded Assignment of Mortgage, or copy thereof
certified by the applicable recording office, if any, showing a
complete chain of assignment from the original mortgagee/secured party
of the related Mortgage Loan to the related Originator (which
assignment may, at such Originator's option, be combined with the
assignment referred to in subpart (iv) hereof);
(iv) an Assignment of Mortgage in recordable form (which, if
acceptable for recording in the relevant jurisdiction, may be included
in a blanket assignment or assignments) of each Mortgage from the
related Originator to the Trustee;
(v) originals of all assumption, modification and substitution
agreements in those instances where the terms or provisions of a
Mortgage or Mortgage Note have been modified or such Mortgage or
Mortgage Note has been assumed; and
(iv) an original title insurance policy (or (A) a copy of the
title insurance policy, or (B) a binder thereof or copy of such binder
together with a certificate from the related Originator that the
original Mortgage has been delivered to the title insurance company
that issued such binder for recordation).
In instances where the original recorded Mortgage and any original
recorded Assignment of Mortgage thereof pursuant to clause (iii) above cannot be
delivered by the Depositor to the Collateral Agent on behalf of the Trustee
prior to or concurrently with the execution and delivery of this Agreement, due
to a delay in connection with recording, the Depositor may:
(x) In lieu of delivering such original recorded Mortgage,
deliver to the Collateral Agent on behalf of the Trustee a copy thereof
provided that the related Originator certifies that the original
Mortgage has been delivered to a title insurance company for
recordation after receipt of its policy of title insurance or binder
therefor; and
(y) In lieu of delivering the original recorded Assignment of
Mortgage, deliver to the Collateral Agent on behalf of the Trustee a
copy of the Assignment of Mortgage certified by the related Originator.
The Trustee shall promptly upon receipt thereof, with respect to each
Mortgage Note described in (i) above and each Assignment of Mortgage described
in (iv) above, endorse such Mortgage Note and Assignment of Mortgage as follows:
"JPMorgan Chase Bank, as Trustee under the Pooling and Servicing Agreement dated
as of September 1, 2002, ABFS Mortgage Loan Trust 2002-3."
32
As promptly as practicable, but in any event within thirty (30) days
from the Closing Date, the related Originator shall cause to be recorded, at the
related Originator's expense, in the appropriate public office for real property
records, the Assignments of Mortgages to the Trustee.
All original documents relating to the Mortgage Loans which are not
delivered to the Trustee, as permitted by Section 2.05(a) of the Unaffiliated
Seller's Agreement and this Section 2.05(a), are and shall be held by the
related Originator, the Unaffiliated Seller or the Servicer in trust for the
benefit of the Trustee on behalf of the Certificateholders.
(b) Within thirty (30) days following delivery of the Mortgage Files to
the Collateral Agent on behalf of the Trustee, the Collateral Agent will review
each Mortgage File to ascertain that all required documents set forth in Section
2.05(a) (other than clause (v) thereof) have been executed and received, and
that such documents relate to the Mortgage Loans identified on the Mortgage Loan
Schedule, and in so doing the Trustee may rely on the purported due execution
and genuineness of any signature thereon. If within such 30-day period (or, with
respect to any Qualified Substitute Mortgage Loan, within thirty (30) days after
the assignment thereof) the Collateral Agent on behalf of the Trustee finds any
document constituting a part of a Mortgage File not to have been executed or
received or to be unrelated to the Mortgage Loans identified in the Mortgage
Loan Schedule, the Collateral Agent shall promptly notify the Servicer, the
Back-up Servicer and the Trustee, and the Servicer shall have a period of sixty
(60) days after such notice within which to correct or cure any such defect.
Each original recorded Assignment of Mortgage shall be delivered to the Trustee
within ten (10) days following the date on which it is returned to the Servicer
by the office with which such Assignment of Mortgage was filed for recording and
within ten (10) days following receipt by the Trustee, the Trustee shall review
such Assignment of Mortgage to confirm the information specified above with
respect to the documents constituting the Mortgage File. Upon receipt by the
Trustee of the recorded assignment such recorded assignment shall become part of
the Mortgage File. The Trustee shall notify the Servicer of any defect in such
assignment based on such review. The Servicer shall have a period of 60 days
following such notice to correct or cure such defect. In the event that the
Servicer fails to record an Assignment of Mortgage as herein provided the
Trustee shall, at the Servicer's expense, use reasonable efforts to prepare and,
if required hereunder, file such assignments for recordation in the appropriate
real property or other records and the Servicer hereby appoints the Collateral
Agent, on behalf of the Trustee as its attorney-in-fact with full power and
authority acting in its stead for the purpose of such preparation, execution and
filing.
33
(c) It is intended that the conveyance of the Mortgage Loans and other
property by the Depositor to the Trustee as provided in this Section 2.05 and
Section 2.02 be, and be construed as, a sale of the Mortgage Loans and such
other property by the Depositor to the Trustee for the benefit of the
Certificateholders. It is, further, not intended that such conveyance be deemed
a pledge of the Mortgage Loans or such other property by the Depositor to the
Trustee to secure a debt or other obligation of the Depositor. However, in the
event that the Mortgage Loans or any of such other property are held to be
property of the Depositor, or if for any reason this Agreement is held or deemed
to create a security interest in the Mortgage Loans or any of such other
property, then it is intended that: (i) this Agreement shall also be deemed to
be a security agreement within the meaning of the Uniform Commercial Code; (ii)
the conveyance provided for in this Section shall be deemed to be a grant by the
Depositor to the Trustee of a security interest in all of the Depositor's right,
title and interest in and to the Mortgage Loans, the Trust Fund and such other
property and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including, without limitation, all amounts from time to time held or
invested in the Distribution Account, whether in the form of cash, instruments,
securities or other property; (iii) the possession by the Trustee or its agent
of the Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to the Uniform Commercial Code; and (iv) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law. The Depositor and the Trustee
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 Mortgage Loans, the Trust Fund or any of such other property,
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 this Agreement.
(d) Without diminution of the requirements of Sections 2.04(c) and this
Section 2.05, all original documents relating to the Mortgage Loans that are not
delivered to the Trustee, are and shall be held by the Servicer in trust for the
benefit of the Trustee on behalf of the Certificateholders. In the event that
any such original document is required pursuant to the terms of this Section
2.05 to be a part of a Mortgage File, such document shall be delivered promptly
to the Trustee pursuant to the Unaffiliated Seller's Agreement. In acting as
custodian of any such original document, the Servicer agrees further that it
does not and will not have or assert any beneficial ownership interest in the
Mortgage Loans or the Mortgage Files. Promptly upon the Depositor's and the
Trust's acquisition thereof and the Servicer's receipt thereof, the Servicer on
behalf of the Trust shall ▇▇▇▇ conspicuously each original document not
delivered to the Trustee, and the Unaffiliated Seller's master data processing
records evidencing each Mortgage Loan with a legend, acceptable to the Trustee,
evidencing that the Trust has purchased the Mortgage Loans and all right and
title thereto and interest therein pursuant to the Unaffiliated Seller's
Agreement and this Agreement.
34
Section 2.06 Acceptance by Trustee of the Trust Fund; Certain
Substitutions; Certification by Trustee. (a) The Trustee agrees to execute and
deliver to the Depositor, the Back-up Servicer, the Servicer and the
Unaffiliated Seller on or prior to the Closing Date an acknowledgement of
receipt of, in the form attached as Exhibit S hereto, with respect to the
Mortgage Loan Pool transferred on such date, each original Mortgage Note (with
any exceptions noted), and declares that it will hold or cause the Collateral
Agent, on its behalf to hold such documents and any amendments, replacements or
supplements thereto, as well as any other assets included in the definition of
Trust Fund and delivered to the Trustee or the Collateral Agent on its behalf,
as Trustee in trust upon and subject to the conditions set forth herein for the
benefit of the Certificateholders. The Collateral Agent agrees, for the benefit
of the Certificateholders, to review (or cause to be reviewed) each Trustee's
Mortgage File within thirty (30) days after the Closing Date (with respect to
the Mortgage Loans), within thirty (30) days after receipt by the Collateral
Agent, on behalf of the Trustee, thereof (with respect to Qualified Substitute
Mortgage Loans), as applicable, and to deliver to the Unaffiliated Seller, the
Servicer, the Back-up Servicer and the Depositor a certification in the form
attached hereto as Exhibit J (the "Initial Certification") certifying that, as
to each Mortgage Loan listed in the related Mortgage Loan Schedule (other than
any Mortgage Loan paid in full or any Mortgage Loan specifically identified in
such certification as not covered by such certification), and unless otherwise
noted, (i) all documents required to be delivered to it pursuant to Section 2.05
hereof (other than the items listed in clause (a)(v) thereof) are in its
possession, (ii) each such document has been reviewed by it and has not been
mutilated, damaged, torn or otherwise physically altered (handwritten additions,
changes or corrections shall not constitute physical alteration if initialed by
the Mortgagor), appears regular on its face and relates to such Mortgage Loan,
and (iii) based on its examination and only as to the foregoing documents, the
information set forth on the Mortgage Loan Schedule as to the information set
forth in (i), (ii), (v) and (vi) of the definition of "Mortgage Loan Schedule"
set forth herein accurately reflects the information set forth in the Trustee's
Mortgage File delivered on such date. The Collateral Agent, on behalf of the
Trustee shall be under no duty or obligation to inspect, review or examine any
such documents, instruments, certificates or other papers to determine that they
are genuine, enforceable, or appropriate for the represented purpose or that
they are other than what they purport to be on their face.
(b) Within ninety (90) days of the Closing Date, the Trustee shall
deliver (or cause to be delivered) to the Servicer, the Back-up Servicer, the
Unaffiliated Seller, the Depositor and the Rating Agencies a final certification
in the form attached hereto as Exhibit K (the "Final Certification") certifying
that, as to each Mortgage Loan listed in the related Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), and
unless otherwise noted, (i) all documents required to be delivered to it
pursuant to Section 2.05 (other than the items listed in clause (a)(v) thereof)
are in its possession, (ii) each such document has been reviewed by it and has
not been mutilated, damaged, torn or otherwise physically altered (handwritten
additions, changes or corrections shall not constitute physical alteration if
initialed by the Mortgagor), appears regular on its face and relates to such
Mortgage Loan, and (iii) based on its examination and only as to the foregoing
documents, the information set forth in (i), (ii), (v) and (vi) of the
definition of "Mortgage Loan Schedule" set forth herein accurately reflects the
information set forth in the Trustee's Mortgage File delivered on such date.
35
(c) If the Collateral Agent on behalf of the Trustee during the process
of reviewing the Trustee's Mortgage Files finds any document constituting a part
of a Trustee's Mortgage File which is not executed, has not been received, is
unrelated to the Mortgage Loan identified in the related Mortgage Loan Schedule,
or does not conform to the requirements of Section 2.05 or the description
thereof as set forth in the related Mortgage Loan Schedule, the Trustee shall
promptly so notify the Servicer, the Back-up Servicer and the Unaffiliated
Seller. In performing any such review, the Collateral Agent on behalf of the
Trustee may conclusively rely on the Unaffiliated Seller as to the purported
genuineness of any such document and any signature thereon. It is understood
that the scope of the Collateral Agent or the Trustee's review of the Mortgage
Files is limited solely to confirming that the documents listed in Section 2.05
(other than those listed in clause (v) thereof) have been executed and received
and relate to the Mortgage Files identified in the related Mortgage Loan
Schedule. The Collateral Agent on behalf of the Trustee shall have no
responsibility for determining whether any document is valid and binding,
whether the text of any assignment or endorsement is in proper or recordable
form, whether any document has been recorded in accordance with the requirements
of any applicable jurisdiction, or whether a blanket assignment is permitted in
any applicable jurisdiction. Pursuant to the Unaffiliated Seller's Agreement,
the Unaffiliated Seller and the Originators have agreed to use reasonable
efforts to cause to be remedied a material defect in a document constituting
part of a Mortgage File of which it is so notified by the Collateral Agent or
the Trustee. If, however, within sixty (60) days after the Collateral Agent or
the Trustee's notice to it respecting such defect the Unaffiliated Seller has
not caused to be remedied the defect and the defect materially and adversely
affects the value of, or the interest of the Certificateholders in the related
Mortgage Loan, the Unaffiliated Seller and the Originators will be obligated,
pursuant to the Unaffiliated Seller's Agreement, to either (i) substitute in
lieu of such Mortgage Loan a Qualified Substitute Mortgage Loan in the manner
and subject to the conditions set forth in Section 3.03 or (ii) purchase such
Mortgage Loan at a purchase price equal to the Principal Balance of such
Mortgage Loan as of the date of purchase, plus all accrued and unpaid interest
on such Principal Balance computed at the Mortgage Interest Rate, net of the
Servicing Fee if the Unaffiliated Seller or an Originator, as applicable, is the
Servicer, plus the amount of any unreimbursed Servicing Advances made by the
Servicer with respect to such Mortgage Loan, which purchase price shall be
deposited in the Collection Account on the next succeeding Servicer Remittance
Date, after deducting therefrom any amounts received in respect of such
repurchased Mortgage Loan or Loans and being held in the Collection Account for
future distribution to the extent such amounts have not yet been applied to
principal or interest on such Mortgage Loan (the "Loan Repurchase Price"). For
purposes of calculating the Interest Remittance Amount and the Principal
Remittance Amount, any Loan Repurchase Price or Substitution Adjustment that is
paid shall be deemed deposited in the Distribution Account in the Due Period
preceding such Servicer Remittance Date.
(d) Upon receipt by the Trustee of a certification of a Servicing
Officer of such substitution or purchase and, in the case of a substitution,
upon receipt of the related Trustee's Mortgage File, and the deposit of the
amounts described above in the Collection Account (which certification shall be
in the form of Exhibit L hereto), the Trustee shall release to the Servicer for
release or cause the Collateral Agent to release to the Unaffiliated Seller the
related Trustee's Mortgage File and shall execute, without recourse, and deliver
such instruments of transfer furnished by the Unaffiliated Seller as may be
necessary to transfer such Mortgage Loan to the Unaffiliated Seller. The Trustee
shall notify the Rating Agencies if the Unaffiliated Seller fails to repurchase
or substitute for a Mortgage Loan in accordance with the foregoing.
36
Section 2.07 Designations under REMIC Provisions; Designation of
Startup Day. (a) REMIC I will consist of all of the assets of the Trust Fund
(other than the Supplemental Interest Payment Account) and will be evidenced by
the Class I-A Interest, the Class I-B1 Interest, the Class I-B2 Interest, the
Class I-B3 Interest, the Class I-B4 Interest, the Class I-B5 Interest, the Class
I-B6 Interest, the Class I-B7 Interest, the Class I-B8 Interest, the Class I-B9
Interest and the Class I-B10 Interest (collectively, the "REMIC I Regular
Interests") which will be uncertificated and will represent the "regular
interests" in REMIC I. REMIC II will consist of the REMIC I Regular Interests
and will be evidenced by the Class II-Accrual Interest, the Class II-A Interest,
the Class II-AIO Interest, the Class II-M1 Interest, the Class II-M2 Interest
and the Class II-B Interest (collectively, the "REMIC II Regular Interests")
which will be uncertificated and will represent the "regular interests" in REMIC
II. The Class R-I Interest and the Class R-II Interest will represent the sole
class of residual interest in each of REMIC I and REMIC II, respectively. The
Trustee will hold the REMIC I Regular Interests and the REMIC II Regular
Interests. The Master REMIC will consist of the REMIC II Regular Interests and
will be evidenced by Class A (other than the Supplemental Interest Right of the
Class A Certificates), Class A-IO, Class M-1 (other than the Supplemental
Interest Right of the Class M-1 Certificates), Class M-2 (other than the
Supplemental Interest Right of the Class M-2 Certificates), Class B (other than
the Supplemental Interest Right of the Class B Certificates) and Class X
Certificates (collectively, the "Master REMIC Regular Interests") which will
represent the "regular interests" in the Master REMIC. The Class R-III Interest
will represent the sole class of "residual interest" in the Master REMIC. The
Class R Certificates will represent the beneficial ownership of the Class R-I,
R-II and R-III Interests.
(b) The Master REMIC Regular Interests and the Class R-III Interest
shall have the principal balances and Pass-Through Rates set forth in the
following table:
Original Certificate
Class Principal Balance Pass-Through Rate
--------------- ---------------------------- -----------------
Class A(1) $321,900,000 (3)
Class A-IO (2) 7.00%
Class M-1(1) $22,200,000 (4)
Class M-2(1) $18,500,000 (5)
Class B(1) $7,400,000 (6)
Class X (7) (8)
Class R (9) (9)
(1) The Capped Certificates represent two separate investments:
(i) the Capped Certificates without the Supplemental Interest
Rights (the "Regular Interests") and (ii) the Supplemental
Interest Rights. Only the first investment, the Regular
Interests, will be treated as regular interests in the Master
REMIC.
(2) On the first Distribution Date through the Distribution Date
in March 2005, the Class A-IO Certificates will have a
notional balance equal to the notional balance of the Class
II-AIO, and for each Distribution Date thereafter, $0.
(3) With respect to any Distribution Date prior to the Clean-up
Call Date, the lesser of (1) 4.263% per annum and (2) the
REMIC II Net WAC Cap for such Distribution Date. With respect
to any Distribution Date after the Clean-up Call Date, the
lesser of (1) 4.763% per annum and (2) the REMIC II Net WAC
Cap for such Distribution Date.
37
(4) With respect to any Distribution Date prior to the Clean-up
Call Date, the lesser of (1) 5.402% per annum and (2) the
REMIC II Net WAC Cap for such Distribution Date. With respect
to any Distribution Date after the Clean-up Call Date, the
lesser of (1) 5.902 % per annum and (2) the REMIC II Net WAC
Cap for such Distribution Date.
(5) With respect to any Distribution Date prior to the Clean-up
Call Date, the lesser of (1) 5.895% per annum and (2) the
REMIC II Net WAC Cap for such Distribution Date. With respect
to any Distribution Date after the Clean-up Call Date, the
lesser of (1) 6.395% per annum and (2) the REMIC II Net WAC
Cap for such Distribution Date.
(6) With respect to any Distribution Date prior to the Clean-up
Call Date, the lesser of (1) 6.860% per annum and (2) the
REMIC II Net WAC Cap for such Distribution Date. With respect
to any Distribution Date after the Clean-up Call Date, the
lesser of (1) 7.360% per annum and (2) the REMIC II Net WAC
Cap for such Distribution Date.
(7) The Class X Certificates will have a notional principal
balance equal to the Aggregate Principal Balance.
(8) The pass-through rate of the Class X Certificates will be the
excess of: (i) the REMIC II Net WAC Cap over (ii) the product
of: (A) two and (B) the weighted average of the Pass-Through
Rates on the REMIC II Regular Interests (other than the Class
II-AIO Interest), where the Class II-Accrual Interest is
subject to a cap equal to zero and the Class II-A, Class
II-M1, Class II-M2 and Class II-B are each subject to a cap
equal to the Pass-Through Rate on its Corresponding Class.
(9) The Class R Certificates will represent the beneficial
ownership of the Class R-I, R-II and R-III Interests. The
Class R-III Interest does not have a principal balance or a
Pass-Through Rate but is entitled to any remaining
distributions of principal and interest after the Master REMIC
Regular Interests have been paid in full.
38
The REMIC II Regular Interests and the Class R-II Interest shall have
the principal balances, Pass-Through Rates and Corresponding Classes of
Certificates set forth in the following table:
Corresponding
REMIC Initial Principal Interest Class of Master
Interests Balance Rate REMIC Interest
-------------- ------------------------------- ------------- ----------------
II-Accrual 50% of the Aggregate Principal (1) N/A
Balance for the Mortgage Loans
plus 50% of the
Overcollateralized Amount
II-A 50% of the Corresponding Class (1) A
balance
II-AIO (2) (3) A-IO
II-M-1 50% of the Corresponding Class (1) M-1
balance
II-M-2 50% of the Corresponding Class (1) M-2
balance
II-B 50% of the Corresponding Class (1) B
balance
R-II (4) (4) N/A
(1) REMIC II Net WAC Cap.
(2) The Class II-A-IO will have a notional balance equal to (a) on
the first Distribution Date through the Distribution Date in
December 2002, the sum of the principal balances of Class
I-B1, Class I-B2, Class I-B3, Class I-B4, Class I-B5, Class
I-B6, Class I-B7, Class I-B8, Class I-B9 and Class I-B10; (b)
from the Distribution Date in January 2003 through the
Distribution Date in March 2003, the sum of the principal
balances of Class I-B2, Class I-B3, Class I-B4, Class I-B5,
Class I-B6, Class I-B7, Class I-B8, Class I-B9 and Class
I-B10; (c) from the Distribution Date in April 2003 through
the Distribution Date in June 2003, the sum of the principal
balances of Class I-B3, Class I-B4, Class I-B5, Class I-B6,
Class I-B7, Class I-B8, Class I-B9 and Class I-B10; (d) from
the Distribution Date in July 2003 through the Distribution
Date in September 2003, the sum of the principal balances of
Class I-B4, Class I-B5, Class I-B6, Class I-B7, Class I-B8,
Class I-B9 and Class I-B10; (e) from the Distribution Date in
October 2003 through the Distribution Date in December 2003,
the sum of the principal balances of Class I-B5, Class I-B6,
Class I-B7, Class I-B8, Class I-B9 and Class I-B10; (f) from
the Distribution Date in January 2004 through the Distribution
Date in March 2004, the sum of the principal balances of Class
I-B6, Class I-B7, Class I-B8, Class I-B9 and Class I-B10; (g)
from the Distribution Date in April 2004 through the
Distribution Date in June 2004, the sum of the principal
balances of Class I-B7, Class I-B8, Class I-B9 and Class
I-B10; (h) from the Distribution Date in July 2004 through the
Distribution Date in September 2004, the sum of the principal
balances of Class I-B8, Class I-B9, and Class I-B10; (i) from
the Distribution Date in October 2004 through the Distribution
Date in December 2004, the sum of the principal balances of
Class I-B9 and Class I-B10; (j) from the Distribution Date in
January 2005 through the Distribution Date in March 2005, the
principal balance of Class I-B10; and (k) on each Distribution
Date thereafter, $0.
39
(3) On each Distribution Date up to and including the Distribution
Date in March 2005, a per annum rate equal to 7.00%. On each
Distribution Date thereafter, 0%.
(4) The Class R-II Interest does not have a principal balance or a
Pass-Through Rate but is entitled to any remaining
distributions of principal and interest after the REMIC II
Regular Interests have been paid in full.
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount will be payable as a reduction of the principal
balances of Class II-A, Class II-M-1, Class II-M-2 and Class II-B (in the order
and amount of such reduction to the principal balance of each classes'
Corresponding Class) and will be accrued and added to the principal balance of
the Class II-Accrual Interest. On each Distribution Date, the increase in
principal balance of the Class II-Accrual Interest may not exceed interest
accruals for such Distribution Date for the Class II-Accrual Interest. In the
event that (i) 50% of the increase in the Overcollateralized Amount exceeds (ii)
interest accruals on the Class II-Accrual Interest 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
Overcollateralized Amount for purposes of determining the amount of interest
accrual on the Class II-Accrual Interest payable as principal on the Class
II-Accrual Interest on the next Distribution Date pursuant to the first sentence
of this paragraph.
On each Distribution Date, the Principal Remittance Amount shall be
allocated 50% to the Class II-Accrual Interest and 50% to Class II-A, Class
II-M-1, Class II-M-2 and Class II-B (in the order and amount of reductions to
the principal balances of each classes' Corresponding Class) until paid in full.
Notwithstanding the above, payments allocated to the Class X Certificates that
result in the reduction of the Overcollateralized Amount shall be allocated to
the Class II-Accrual Interest (until paid in full). Liquidated Loan Losses shall
be applied so that after all distributions have been made on each Distribution
Date the principal balances of the Class II-A, Class II-M-1, Class II-M-2 and
Class II-B are each equal to 50% of the principal balance of its Corresponding
Class and the Class II-Accrual Interest is equal to the sum of (i) 50% of the
Aggregate Principal Balance and (ii) 50% of the Overcollateralized Amount.
40
(d) The REMIC I Regular Interests and the Class R-I Interest shall have
the principal balances and Pass-Through Rates set forth in the following table:
REMIC Initial Pass-Through
Interests Balance Rate
-------------- -------------------- ----------------
I-A $250,340,000 (1)
I-B1 $1,850,000 (1)
I-B2 $4,250,000 (1)
I-B3 $6,300,000 (1)
I-B4 $7,120,000 (1)
I-B5 $6,660,000 (1)
I-B6 $930,000 (1)
I-B7 $19,250,000 (1)
I-B8 $15,080,000 (1)
I-B9 $8,420,000 (1)
I-B10 $49,800,000 (1)
R-I (2) (2)
(1) On any Distribution Date, a Pass-Through Rate equal to the Net
Weighted Average Mortgage Interest Rate.
(2) The Class R-I Interest does not have a principal balance or a
Pass-Through Rate but is entitled to any remaining
distributions of principal and interest after the REMIC I
Regular Interests have been paid in full.
On each Distribution Date, the Principal Remittance Amount will be
allocated to Class I-A until the Class I-A is paid in full or eliminated by such
losses; and thereafter, such amounts will be allocated sequentially to the Class
I-B1, Class I-B2, Class I-B3, Class I-B4, Class I-B5, Class I-B6, Class I-B7,
Class I-B8, Class I-B9 and Class I-B10 until each such Class is paid in full or
eliminated by such losses.
(e) The Closing Date will be the "startup day" of each REMIC created
hereunder within the meaning of Section 860G(a)(9) of the Code.
Section 2.08 Execution of Certificates. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the delivery of the Trustee's
Mortgage Files relating thereto to it and, concurrently with such delivery, has
executed, authenticated and delivered to or upon the order of the Depositor, in
exchange for the Mortgage Loans, the Trustee's Mortgage Files and the other
assets included in the definition of Trust Fund, Certificates duly authenticated
by the Trustee in Authorized Denominations evidencing the entire ownership of
the Trust Fund.
Section 2.09 Application of Principal and Interest. In the event that
Net Liquidation Proceeds on a Liquidated Mortgage Loan are less than the
Principal Balance of the related Mortgage Loan plus accrued interest thereon, or
any Mortgagor makes a partial payment of any Monthly Payment due on a Mortgage
Loan, such Net Liquidation Proceeds or partial payment shall be applied as
provided in the related Mortgage Note, and if not so provided, first to interest
accrued at the Mortgage Interest Rate and then to principal.
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Section 2.10 Grant of Security Interest. (a) Except with respect to the
REMIC Provisions, it is the intention of the parties hereto that the conveyance
by the Depositor of the Trust Fund to the Trustee on behalf of the Trust shall
constitute a purchase and sale of such Trust Fund and not a loan. In the event,
however, that a court of competent jurisdiction were to hold that the
transaction evidenced hereby constitutes a loan and not a purchase and sale, it
is the intention of the parties hereto that this Agreement shall constitute a
security agreement under applicable law, and that the Depositor shall be deemed
to have granted to the Trustee, on behalf of the Trust, a first priority
perfected security interest in all of the Depositor's right, title and interest
in, to and under the Trust Fund. The conveyance by the Depositor of the Trust
Fund to the Trustee on behalf of the Trust shall not constitute and is not
intended to result in an assumption by the Trustee or any Certificateholder of
any obligation of the Unaffiliated Seller or any other Person in connection with
the Trust Fund.
(b) The Depositor and the Servicer shall take no action inconsistent
with the Trust's ownership of the Trust Fund and each shall indicate or shall
cause to be indicated in its records and records held on its behalf that
ownership of each Mortgage Loan and the assets in the Trust Fund are held by the
Trustee on behalf of the Trust. In addition, the Depositor and the Servicer
shall respond to any inquiries from third parties with respect to ownership of a
Mortgage Loan or any other asset in the Trust Fund by stating that it is not the
owner of such asset and that ownership of such Mortgage Loan or other Trust Fund
asset is held by the Trustee on behalf of the Trust.
Section 2.11 Further Action Evidencing Assignments. (a) The Servicer
agrees that, from time to time, at its expense, it shall cause the Unaffiliated
Seller (and the Depositor on behalf of itself also agrees that it shall),
promptly to execute and deliver all further instruments and documents, and take
all further action, that may be necessary or appropriate, or that the Servicer,
the Collateral Agent or the Trustee may reasonably request, in order to perfect,
protect or more fully evidence the transfer of ownership of the Trust Fund or to
enable the Trustee to exercise or enforce any of its rights hereunder. Without
limiting the generality of the foregoing, the Servicer and the Depositor will,
upon the request of the Servicer, the Collateral Agent or the Trustee, execute
and file (or cause to be executed and filed) such real estate filings, financing
or continuation statements, or amendments thereto or assignments thereof, and
such other instruments or notices, as may be necessary or appropriate.
(b) The Depositor hereby grants to the Servicer and the Trustee powers
of attorney to execute all documents on its behalf under this Agreement and the
Unaffiliated Seller's Agreement as may be necessary or desirable to effectuate
the foregoing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations of the Servicer and the Unaffiliated
Seller. The Servicer and the Unaffiliated Seller hereby represent and warrant to
the Collateral Agent, the Trustee, the Depositor, the Back-up Servicer and the
Certificateholders as of the Closing Date and during the term of this Agreement
that:
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(a) Each of the Unaffiliated Seller, the Servicer and the Subservicers
is a corporation duly organized, validly existing and in good standing under the
laws of their respective states of incorporation and has the corporate power to
own its assets and to transact the business in which it is currently engaged.
Each of the Unaffiliated Seller, the Servicer and the Subservicers is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it or the performance of its obligations hereunder
requires such qualification and in which the failure so to qualify could
reasonably be expected to have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Unaffiliated
Seller, the Servicer or the Subservicers or the performance of their respective
obligations hereunder;
(b) The Unaffiliated Seller and the Servicer each has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Unaffiliated Seller and the Servicer,
enforceable in accordance with its terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency, reorganization, moratorium or 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);
(c) Neither the Unaffiliated Seller nor the Servicer is required to
obtain the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency which consent already has not been obtained in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement, except such as have been obtained prior to the Closing Date;
(d) The execution, delivery and performance of this Agreement by the
Unaffiliated Seller and the Servicer will not violate any provision of any
existing law or regulation or any order or decree of any court or the Articles
of Incorporation or Bylaws of the Unaffiliated Seller or the Servicer,
respectively, or constitute a breach of any mortgage, indenture, contract or
other agreement to which the Unaffiliated Seller or the Servicer, respectively,
is a party or by which it may be bound;
(e) There is no action, suit, proceeding or investigation pending or
threatened against the Servicer, the Unaffiliated Seller or the Subservicers
which, either in any one instance or in the aggregate, is, likely to result in
any material adverse change in the business, operations, financial condition,
properties, or assets of the Servicer, the Unaffiliated Seller or the
Subservicers, or in any material impairment of the right or ability of any of
them to carry on its business substantially as now conducted, or in any material
liability on the part of any of them, or which would draw into question the
validity of this Agreement, the Certificates, or the Mortgage Loans or of any
action taken or to be taken in connection with the obligations of the
Unaffiliated Seller or the Servicer contemplated herein or therein, or which
would be likely to impair materially the ability of the Unaffiliated Seller or
the Servicer to perform its obligations hereunder;
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(f) Neither this Agreement nor any statement, report, or other document
furnished or to be furnished by the Servicer, the Unaffiliated Seller or the
Subservicer pursuant to this Agreement or in connection with the transactions
contemplated hereby, including, without limitation, the sale or placement of the
Certificates, contains any untrue statement of fact provided by or on behalf of
the Unaffiliated Seller or the Servicer or omits to state a fact necessary to
make the statements provided by or on behalf of the Unaffiliated Seller or the
Servicer contained herein or therein not misleading;
(g) Neither the Unaffiliated Seller nor the Servicer believes, nor does
either have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement;
(h) The transfer, assignment, and conveyance of the Mortgage Loans by
the Unaffiliated Seller pursuant to this Agreement is not subject to the bulk
transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(i) The Unaffiliated Seller is solvent and will not as a result of this
Agreement and the undertakings of the Unaffiliated Seller hereunder be rendered
insolvent;
(j) None of the Unaffiliated Seller, the Servicer or the Subservicers
is an "investment company" or a company "controlled by an investment company,"
within the meaning of the Investment Company Act of 1940, as amended; and
(k) Immediately prior to the transfer and assignment by the Depositor
to the Trustee, the Depositor had good title to, and was the sole owner of each
Mortgage Loan, free of any interest of any other Person, and the Depositor has
transferred 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, 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, the security interest
referred to in Section 2.10 hereof. The Mortgage has been duly assigned and the
Mortgage Note has been duly endorsed. The Assignment of Mortgage delivered to
the Trustee pursuant to Section 2.05(a)(iv) is in recordable form and is
acceptable for recording under the laws of the applicable jurisdiction. The
endorsement of the Mortgage Note, the delivery to the Trustee of the endorsed
Mortgage Note, and such Assignment of Mortgage, and the delivery of such
Assignment of Mortgage for recording to, and the due recording of such
Assignment of Mortgage in, the appropriate public recording office in the
jurisdiction in which the Mortgaged Property is located are sufficient to permit
the Trustee to avail itself of all protection available under applicable law
against the claims of any present or future creditors of the Depositor, and are
sufficient to prevent any other sale, transfer, assignment, pledge, or
hypothecation of the Mortgage Note and Mortgage by the Depositor from being
enforceable.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.01 shall survive the delivery of the
respective Mortgage Files to the Collateral Agent on behalf of the Trustee or to
a custodian, as the case may be, and inure to the benefit of the Trustee.
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Section 3.02 Representations, Warranties and Covenants of the
Depositor. The Depositor hereby represents, warrants and covenants to the
Collateral Agent, the Servicer, the Back-up Servicer, the Trustee, the
Unaffiliated Seller, and the Certificateholders 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 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;
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(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 good title to, and was the sole owner of each
Mortgage Loan, free of any interest of any other Person, and the Depositor has
transferred 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, 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, the security interest
referred to in Section 2.10 hereof. The Mortgage has been duly assigned and the
Mortgage Note has been duly endorsed. The Assignment of Mortgage delivered to
the Collateral Agent on behalf of the Trustee pursuant to Section 2.05(a)(iv) is
in recordable form and is acceptable for recording under the laws of the
applicable jurisdiction. The endorsement of the Mortgage Note, the delivery to
the Collateral Agent on behalf of the Trustee of the endorsed Mortgage Note, and
such Assignment of Mortgage, and the delivery of such Assignment of Mortgage for
recording to, and the due recording of such Assignment of Mortgage in, the
appropriate public recording office in the jurisdiction in which the Mortgaged
Property is located are sufficient to permit the Trustee to avail itself of all
protection available under applicable law against the claims of any present or
future creditors of the Depositor, and are sufficient to prevent any other sale,
transfer, assignment, pledge, or hypothecation of the Mortgage Note and Mortgage
by the Depositor from being enforceable.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.02 shall survive delivery of the
respective Mortgage Files to the Collateral Agent on behalf of the Trustee or to
a custodian, as the case may be, and shall inure to the benefit of the Trustee.
Section 3.03 Purchase and Substitution. (a) It is understood and agreed
that the representations and warranties set forth in Sections 3.01, 3.02 and
3.03 of the Unaffiliated Seller's Agreement shall survive delivery of the
Certificates to the Certificateholders. Pursuant to the Unaffiliated Seller's
Agreement, with respect to any representation or warranty contained in Sections
3.01, 3.02 or 3.03 of the Unaffiliated Seller's Agreement that is made to the
best of the Unaffiliated Seller's knowledge, the Unaffiliated Seller shall be
deemed to have knowledge of all facts and circumstances in existence as of such
date and, if it is discovered by the Servicer, the Back-up Servicer, any
Subservicer, the Trustee or any Certificateholder that the substance of such
representation and warranty was inaccurate as of the Closing Date and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan or the interests of the Trustee with respect thereto, then notwithstanding
the Unaffiliated Seller's lack of knowledge with respect to the inaccuracy at
the time the representation or warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation or warranty. Upon discovery by
the Unaffiliated Seller, the Servicer, the Back-up Servicer, any Subservicer or
the Trustee of a breach of any of such representations and warranties which
materially and adversely affects the value of the Mortgage Loans or the interest
of the Trustee or the Certificateholders, or which materially and adversely
affects the interests of the Trustee or the Certificateholders in the related
Mortgage Loan in the case of a representation and warranty relating to a
particular
46
Mortgage Loan (notwithstanding that such representation and warranty
was made to the Unaffiliated Seller's best knowledge), the party discovering
such breach shall promptly (and in any event within five (5) Business Days of
the discovery) give written notice to the others. Subject to the last paragraph
of this Section 3.03, within sixty (60) days of the earlier of its discovery or
its receipt of notice of any breach of a representation or warranty, pursuant to
the Unaffiliated Seller's Agreement, the Servicer shall, or shall cause the
Unaffiliated Seller or an Originator to (a) promptly cure such breach in all
material respects, or (b) purchase such Mortgage Loan on the next succeeding
Servicer Remittance Date, by depositing an amount equal to the Loan Repurchase
Price into the Collection Account, or (c) remove such Mortgage Loan from the
Trust Fund (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans; provided, that such
substitution is effected not later than the date which is two years after the
Startup Day or at such later date, if the Trustee receives an Opinion of
Counsel, by and at the cost of the Servicer, to the effect set forth below in
this Section. In addition, pursuant to the Unaffiliated Seller's Agreement, the
Unaffiliated Seller and the related Originator shall be obligated to indemnify
the Trustee and the Certificateholders for any third party claims arising out of
a breach by the Unaffiliated Seller of representations or warranties regarding
the Mortgage Loans. Pursuant to the Unaffiliated Seller's Agreement any such
substitution shall be accompanied by payment by the Unaffiliated Seller of the
Substitution Adjustment, if any, to be deposited in the Collection Account.
(b) As to any Deleted Mortgage Loan for which the Unaffiliated Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, the Servicer shall
cause the Unaffiliated Seller or an Originator, as applicable, to effect such
substitution by delivering to the Collateral Agent on behalf of the Trustee a
certification in the form attached hereto as Exhibit L, executed by a Servicing
Officer and shall cause the Unaffiliated Seller or an Originator, as applicable,
to deliver the documents described in Sections 2.05(a)(i) through (vi) for such
Qualified Substitute Mortgage Loan or Loans to the Collateral Agent on behalf of
the Trustee.
(c) The Servicer shall deposit in the Collection Account all payments
received in connection with such Qualified Substitute Mortgage Loan or Loans
after the date of such substitution. Monthly Payments received with respect to a
Qualified Substitute Mortgage Loan or Loans on or before the date of
substitution will be retained by the Unaffiliated Seller. The Trust Fund will
own all payments received on the Deleted Mortgage Loan on or before the date of
substitution, and the Unaffiliated Seller shall thereafter be entitled to retain
all amounts subsequently received in respect of such Deleted Mortgage Loan. The
Servicer shall give written notice to the Trustee and the Back-up Servicer that
such substitution has taken place and shall amend the Mortgage Loan Schedule to
reflect the removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage Loan or
Loans. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects.
(d) It is understood and agreed that the obligations of the
Unaffiliated Seller and the related Originator set forth in Sections 2.06 and
3.05 of the Unaffiliated Seller's Agreement to, and the Servicer's obligation to
cause the Unaffiliated Seller and the Originator to cure, purchase or substitute
for a defective Mortgage Loan, or to indemnify as described in clause (a) above,
constitute the sole remedies of the Trustee and the Certificateholders
respecting a breach of the representations and warranties of the Unaffiliated
Seller and the Originators set forth in Sections 3.01, 3.02 and 3.03 of the
Unaffiliated Seller's Agreement. The Trustee shall give prompt written notice to
the Rating Agencies of any repurchase or substitution made pursuant to this
Section 3.03 or Section 2.06(b).
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(e) Upon discovery by the Servicer, the Back-up Servicer, the Trustee
or any Certificateholder that any Mortgage Loan does not constitute a Qualified
Mortgage, the party discovering such fact shall promptly (and in any event
within five (5) Business Days of the discovery) give written notice thereof to
the other parties. In connection therewith, pursuant to the Unaffiliated
Seller's Agreement, the Unaffiliated Seller shall be required to repurchase or
substitute a Qualified Substitute Mortgage Loan for the affected Mortgage Loan
within sixty (60) days of the earlier of such discovery by any of the foregoing
parties, or the Trustee's or the Unaffiliated Seller's receipt of notice, in the
same manner as it would a Mortgage Loan for a breach of representation or
warranty contained in Sections 3.01, 3.02 or 3.03 of the Unaffiliated Seller's
Agreement. The Trustee shall reconvey to the Unaffiliated Seller the Mortgage
Loan to be released pursuant hereto in the same manner, and on the same terms
and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Sections 3.01, 3.02 or 3.03 of the
Unaffiliated Seller's Agreement.
(f) Pursuant to Section 3.05(k) of the Unaffiliated Seller's Agreement
the Unaffiliated Seller and each of the Originators shall be jointly and
severally responsible for any repurchase, cure or substitution obligation of the
Unaffiliated Seller or any of the Originators under this Agreement or the
Unaffiliated Seller's Agreement.
Section 3.04 Representations, Warranties and Covenants of the Trustee,
the Collateral Agent and the Back-up Servicer. Each of the Trustee, the
Collateral Agent and the Back-up Servicer hereby represents, warrants and
covenants to the Servicer, the Certificateholders, the Unaffiliated Seller and
the Depositor that as of the date of this Agreement or as of such date
specifically provided herein:
(a) It is a banking corporation duly organized, validly existing and in
good standing under the laws of the State of New York;
(b) It has the corporate power and authority to execute, deliver and
perform, and to enter into and consummate transactions contemplated by this
Agreement; and
(c) This Agreement has been duly and validly authorized, executed and
delivered by it, 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
it, enforceable against it 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).
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.04 shall survive delivery of the
respective Trustee's Mortgage Files to the Collateral Agent, on behalf of the
Trustee or to another custodian, as the case may be, and shall inure to the
benefit of the Certificateholders.
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ARTICLE IV
THE CERTIFICATES
Section 4.01 The Certificates. The Class A Certificates shall be
substantially in the form annexed hereto of Exhibit A, the Class A-IO
Certificates shall be substantially in the form annexed hereto as Exhibit B, the
Class M-1 and Class M-2 Certificates shall be substantially in the form annexed
hereto of Exhibit C and the Class B, Class X and Class R Certificates shall be
substantially in the forms annexed hereto as Exhibits D, E and F, respectively.
All Certificates shall be executed by manual or facsimile signature on behalf of
the Trustee by an authorized officer and authenticated by the manual or
facsimile signature of an authorized officer. Certificates bearing the
signatures of individuals who were at the time of the execution of the
Certificates the authorized officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the delivery of such Certificates or did not hold such offices
at the date of such Certificates. All Certificates issued hereunder shall be
dated the date of their authentication.
Section 4.02 Registration of Transfer and Exchange of Certificates. (a)
The Trustee, as registrar, shall cause to be kept a register (the "Certificate
Register") in which, subject to such reasonable regulations as it may prescribe,
the Trustee shall provide for the registration of Certificates and the
registration of transfer of Certificates. The Trustee is hereby appointed
registrar (the "Certificate Registrar") for the purpose of registering
Certificates and transfers of Certificates as herein provided.
(b) All Certificates issued upon any registration of transfer or
exchange of Certificates shall be valid evidence of the same ownership interests
in the Trust and entitled to the same benefits under this Agreement as the
Certificates surrendered upon such registration of transfer or exchange.
(c) Every Certificate presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or 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.
(d) No service charge shall be made to a Holder for any registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Certificates; any
other expenses in connection with such transfer or exchange shall be an expense
of the Trust.
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(e) It is intended that the Offered Certificates be registered so as to
participate in a global book-entry system with the Depository, as set forth
herein. The Offered Certificates shall, except as otherwise provided in the next
paragraph, be initially issued in the form of a single fully registered
Certificate with a denomination equal to the Original Certificate Principal
Balance or Class A-IO Notional Balance, respectively. Upon initial issuance, the
ownership of each such Offered Certificate shall be registered in the
Certificate Register in the name of Cede & Co., or any successor thereto, as
nominee for the Depository. The Depositor and the Trustee are hereby authorized
to execute and deliver the Representation Letter with the Depository. With
respect to the Offered Certificates registered in the Certificate Register in
the name of Cede & Co., as nominee of the Depository, the Depositor, the
Unaffiliated Seller, the Servicer, the Back-up Servicer and the Trustee shall
have no responsibility or obligation to Direct or Indirect Participants or
beneficial owners for which the Depository holds Offered Certificates from time
to time as a Depository. Without limiting the immediately preceding sentence,
the Depositor, the Unaffiliated Seller, the Servicer, the Back-up Servicer and
the Trustee shall have no responsibility or obligation with respect to (i) the
accuracy of the records of the Depository, Cede & Co., or any Direct or Indirect
Participant with respect to any Ownership Interest, (ii) the delivery to any
Direct or Indirect Participant or any other Person, other than a
Certificateholder, of any notice with respect to the Offered Certificates or
(iii) the payment to any Direct or Indirect Participant or any other Person,
other than a Certificateholder, of any amount with respect to any distribution
of principal or interest on the Offered Certificates. No Person other than a
Certificateholder shall receive a certificate evidencing such Offered
Certificate. Upon delivery by the Depository to the Trustee of written notice to
the effect that the Depository has determined to substitute a new nominee in
place of Cede & Co., and subject to the provisions hereof with respect to the
payment of interest by the mailing of checks or drafts to the Certificateholders
appearing as Certificateholders at the close of business on a Record Date, the
name "Cede & Co." in this Agreement shall refer to such new nominee of the
Depository.
(f) In the event that (i) the Depository or the Servicer advises the
Trustee in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as nominee and depository with respect to the
Offered Certificates and the Servicer or the Depository is unable to locate a
qualified successor or (ii) the Trustee at its sole option elects to terminate
the book-entry system through the Depository, the Offered Certificates shall no
longer be restricted to being registered in the Certificate Register in the name
of Cede & Co. (or a successor nominee) as nominee of the Depository. At that
time, the Servicer may determine that the Offered Certificates shall be
registered in the name of and deposited with a successor depository operating a
global book-entry system, as may be acceptable to the Servicer, or such
depository's agent or designee but, if the Servicer does not select such
alternative global book-entry system, then the Offered Certificates may be
registered in whatever name or names Certificateholders transferring Offered
Certificates shall designate, in accordance with the provisions hereof;
provided, however, that any such reregistration shall be at the expense of the
Servicer.
(g) Notwithstanding any other provision of this Agreement to the
contrary, so long as any Offered Certificate is registered in the name of Cede &
Co., as nominee of the Depository, all distributions of principal or interest on
such Offered Certificates, as the case may be, and all notices with respect to
such Offered Certificates, as the case may be, shall be made and given,
respectively, in the manner provided in the Representation Letter.
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(h) No transfer, sale, pledge or other disposition of any Class R or
Class X Certificate shall be made unless such disposition is made pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "1933 Act") and effective registration or qualification under applicable
state securities laws or "Blue Sky" laws, or is made in a transaction that does
not require such registration or qualification. In the event that a transfer of
a Certificate is to be made in reliance upon an exemption from the 1933 Act, the
Trustee or the Certificate Registrar shall require, in order to assure
compliance with the 1933 Act, that the Certificateholder desiring to effect such
disposition and such Certificateholder's prospective transferee each certify to
the Trustee or the Certificate Registrar in writing the facts surrounding such
disposition substantially in the form of Exhibit M hereto (with respect to a
transfer made pursuant to Rule 144A promulgated under the ▇▇▇▇ ▇▇▇) and may,
unless such transfer occurs more than three years after the Closing Date or is
made pursuant to Rule 144A promulgated under the 1933 Act, require an Opinion of
Counsel satisfactory to the Trustee or Certificate Registrar as the case may be,
that such transfer may be made pursuant to an exemption from the 1933 Act, which
Opinion of Counsel shall be at the expense of the Certificateholder. None of the
Servicer, the Back-up Servicer, the Depositor, the Unaffiliated Seller or the
Trustee is obligated under this Agreement to register Certificates under the
1933 Act, as amended or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of the Class R or
Class X Certificates without such registration or qualification. Every
Certificate presented or surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer substantially in the
form of Exhibit N hereto, or such other endorsement or written instrument of
transfer as is satisfactory to the Trustee, duly executed by the Holder thereof
or his attorney duly authorized in writing, together with wiring instructions,
if applicable, in the form of Exhibit R.
(i) Any such Certificateholder desiring to effect such transfer shall,
and does hereby agree to, indemnify the Trustee, the Depositor, the Unaffiliated
Seller, the Back-up Servicer and the Servicer against any liability that may
result if the transfer is not exempt or is not made in accordance with such
applicable federal and state laws. Promptly after receipt by an indemnified
party under this paragraph of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this paragraph, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this paragraph. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to appoint counsel reasonably satisfactory to such indemnified party to
represent the indemnified party in such action; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to appoint counsel to defend such action
and approval by the indemnified party of such counsel, the indemnifying party
will not be liable to such indemnified party under this paragraph for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso of the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel for any indemnified party),
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party. Under no circumstances shall the indemnified party enter
into a settlement agreement with respect to any lawsuit, claim or other
proceeding without the prior written consent of the indemnifying party.
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(j) Subject to the restrictions set forth in this Agreement, upon
surrender for registration of transfer of any Certificate at the office or
agency of the Trustee located in New York, New York, the Trustee shall execute,
authenticate and deliver in the name of the designated transferee or
transferees, a new Certificate of the same Class and Percentage Interest and
dated the date of authentication by the Trustee. At the option of the
Certificateholders, Certificates may be exchanged for other Certificates of
Authorized Denominations of a like aggregate Percentage Interest, upon surrender
of the Certificates to be exchanged at such office. 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. No service charge shall be made for any transfer or
exchange of Certificates, but the Trustee may require 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. All Certificates
surrendered for transfer and exchange shall be cancelled and destroyed by the
Trustee in accordance with the Trustee's standard procedures.
(k) No transfer of an Offered Certificate shall be made to the
Unaffiliated Seller or, to the actual knowledge of a Responsible Officer of the
Trustee, to any of the Unaffiliated Seller's Affiliates, successors or assigns.
(l) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Servicer or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (viii) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Class R Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and a United
States Person and shall promptly notify the Trustee of any change or
impending change in its status as either a United States Person or a
Permitted Transferee.
(ii) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery
to it of, and shall not register the Transfer of any Class R
Certificate until its receipt of, an affidavit and agreement (a
"Transfer Affidavit and Agreement") attached hereto as Exhibit M from
the proposed Transferee, in form and substance satisfactory to the
Trustee, representing and warranting, among other things, that such
Transferee is a Permitted Transferee, that it is not acquiring its
Ownership Interest in the Class R Certificate that is the subject of
the proposed Transfer as a nominee, trustee or agent for any Person
that is not a Permitted Transferee, that as long as it retains its
Ownership Interest in a Class R Certificate, it will endeavor to remain
a Permitted Transferee, that it will not cause income from its
Ownership Interest in a Class R Certificate to be attributable to a
foreign permanent establishment or fixed base (within the meaning of
any applicable income tax treaty) of it or another U.S. taxpayer, and
that it has reviewed the provisions of this Section 4.02(l) and agrees
to be bound by them.
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(iii) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (ii) above, if a
Responsible Officer of the Trustee has actual knowledge that the
proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Class R Certificate to such proposed Transferee
shall be effected.
(iv) Each Person holding or acquiring any Ownership Interest
in a Class R Certificate shall agree (x) to require a Transfer
Affidavit and Agreement from any other Person to whom such Person
attempts to transfer its Ownership Interest in a Class R Certificate
and (y) not to transfer its Ownership Interest unless it provides a
certificate (attached hereto as Exhibit N) to the Trustee stating that,
among other things, it has no actual knowledge that such other Person
is not a Permitted Transferee.
(v) Each Person holding or acquiring an Ownership Interest in
a Class R Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of temporary Treasury
regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Class R Certificate, if it is, or is holding an
Ownership Interest in a Class R Certificate on behalf of, a
"pass-through interest holder".
(vi) The Trustee will register the Transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit and
Agreement and all of such other documents as shall have been reasonably
required by the Trustee as a condition to such registration. In
addition, 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 to the effect that such Transferee is a United
States Person and is not a "disqualified organization" (as defined in
Section 860E(e)(5) of the Code).
(vii) Any attempted or purported transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of
this Section 4.02 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 Class R Certificate in violation of the provisions
of this Section 4.02, 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 Class R Certificate. The
Trustee shall notify the Servicer upon receipt of written notice or
discovery by a Responsible Officer that the registration of transfer of
a Class R Certificate was not in fact permitted by this Section 4.02.
Knowledge shall not be imputed to the Trustee with respect to an
impermissible transfer in the absence of such a written notice or
discovery by a Responsible Officer. The Trustee shall be under no
liability to any Person for any registration of transfer of a Class R
Certificate that is in fact not permitted by this Section 4.02 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 and Agreement. The
Trustee shall be entitled, but not obligated to, recover from any
Holder of a Class R 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 Class R Certificate at and after either such time and any and all
costs incurred by the Trustee in reversing the non-permitted transfer.
Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Holder of such
Certificate.
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(viii) If any purported transferee shall become a Holder of a
Class R Certificate in violation of the restrictions in this Section
4.02, then the Servicer or its designee shall have the right, without
notice to the Holder or any prior Holder of such Class R Certificate,
to sell such Class R Certificate to a purchaser selected by the
Servicer or its designee on such reasonable terms as the Servicer or
its designee may choose. Such purchaser may be the Servicer itself or
any Affiliate of the Servicer. The proceeds of such sale, net of
commissions, expenses and taxes due, if any, will be remitted by the
Servicer to the last preceding purported transferee of such Class R
Certificate, except that in the event that the Servicer determines that
the Holder or any prior Holder of such Class R Certificate may be
liable for any amount due under this Section 4.02 or any other
provision of this Agreement, the Servicer may withhold a corresponding
amount from such remittance as security for such claim. The terms and
conditions of any sale under this clause (viii) shall be determined in
the sole discretion of the Servicer or its designee, and it shall not
be liable to any Person having an Ownership Interest in a Class R
Certificate as a result of its exercise of such discretion.
(m) The provisions of Section 4.02(l) may be modified, added to or
eliminated, provided that there shall have been delivered to the Trustee an
Opinion of Counsel to the effect that such modification of, addition to or
elimination of such provisions will not cause any of the REMICs included in the
Trust Fund to cease to qualify as a REMIC and will not cause (x) any of the
REMICs included in the Trust Fund to be subject to an entity-level tax caused by
the Transfer of any Ownership Interest in a Class R Certificate to a Person that
is not a Permitted Transferee or (y) a Person other than the prospective
transferee to be subject to a REMIC-related tax caused by the Transfer of an
Ownership Interest in a Class R Certificate to a Person that is not a Permitted
Transferee.
(n) The Trustee and the Servicer shall require the prospective
transferee of any Class R or Class X Certificate to certify (in the form of
Exhibit O hereto) that it is not a pension or benefit plan or individual
retirement arrangement that is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or to Section 4975 of the Code (a
"Plan") or an entity whose underlying assets are deemed to be assets of a Plan
by reason of such plan's or arrangement's investment in the entity, as
determined under U.S. Department of Labor Regulations 29 C.F.R. ss. 2510.3-101
or otherwise.
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Section 4.03 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 Servicer and the Trustee such
security or indemnity as may reasonably be required by each of them to save each
of them harmless, then, in the absence of notice to the Servicer and the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Trustee
shall execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Percentage Interest, but bearing a number not contemporaneously
outstanding. Upon the issuance of any new Certificate under this Section 4.03,
the Servicer and 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 their fees and expenses connected therewith. Any duplicate
Certificate issued pursuant to this Section 4.03 shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the mutilated, destroyed, lost or stolen Certificate shall be
found at any time.
Section 4.04 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer and subject to the provisions of
Section 4.02 and Article X, the Servicer, the Back-up Servicer, the Depositor,
the Unaffiliated Seller and the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving remittances pursuant to Section 6.05 and for all other purposes
whatsoever, and the Servicer, the Back-up Servicer, the Depositor, the
Unaffiliated Seller and the Trustee shall not be affected by notice to the
contrary.
ARTICLE V
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 5.01 REMIC Matters; The Servicer. (a) The parties intend that
the Trust Fund formed hereunder shall, except for the Supplemental Interest
Payment Account, constitute, and that the affairs of the Trust Fund shall be
conducted and this Agreement shall be construed so as to qualify the Trust Fund
as, three separate "real estate mortgage investment conduits" as defined in and
in accordance with the REMIC Provisions. In furtherance of such intention, the
Servicer covenants and agrees that it shall, to the extent permitted by
applicable law, act as agent (and the Servicer is hereby appointed to act as
agent) on behalf of the Trust Fund and that in such capacity it shall: (a)
prepare and file, or cause to be prepared and filed, all required federal, state
and local tax returns for each REMIC using a calendar year as the taxable year
for the Trust Fund when and as required by the REMIC Provisions and other
applicable federal, state and local income tax laws; (b) maintain or cause the
maintenance of the books of each REMIC on the accrual method of accounting; (c)
make elections, on behalf of each REMIC, to be treated as a REMIC on the federal
tax return of the Trust Fund for its first taxable year, in accordance with the
REMIC Provisions; provided, however, that such election shall not be made with
respect to the Supplemental Interest Payment Account and shall specifically
exclude the Supplemental Interest Payment Account from the assets for which a
REMIC election is made; (d) prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders all information reports as and when
required to be provided to them in accordance with the REMIC Provisions; (e)
conduct the affairs of each REMIC at all times that any Certificates are
outstanding so as to maintain the status thereof as a REMIC under the REMIC
Provisions; and (f) 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.
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(b) [Reserved]
(c) In the event that any income tax (including any tax with regard to
"prohibited transactions" of any REMIC created hereunder as defined in Section
860F of the Code) is imposed on the Trust Fund, such tax shall be charged
against amounts otherwise distributable to the Holders of the Class R or Class X
Certificates on a pro rata basis to the extent hereinafter provided. In the
event that any such tax shall be due and owing at a time when amounts otherwise
distributable to the Holders of the Class R or Class X Certificates are not
available, the Servicer shall pay such tax from its own funds. In such event,
and upon receipt of written instruction from the Servicer, signed by a
Responsible Officer, the Trustee is hereby authorized to retain from amounts
otherwise distributable to the Holders of the Class R and Class X Certificates
on any Distribution Date sufficient funds to reimburse the Servicer for the
payment of such tax (but such obligation shall not prevent the Trustee or any
other appropriate Person from contesting any such tax in appropriate proceedings
and shall prevent the Trustee from withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings).
(d) The Servicer shall service and administer the Mortgage Loans in
accordance with the Accepted Servicing Practices and shall have full power and
authority to do any and all things not inconsistent therewith in connection with
such servicing and administration which it may deem necessary or desirable in
order to maximize collections on the Mortgage Loans, subject to the limitations
set forth in this Agreement. The Trustee shall furnish the Servicer with any
powers of attorney and other documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder. Without
limiting the generality of the foregoing, the Servicer shall continue, and is
hereby authorized and empowered by the Trustee, to execute and deliver, on
behalf of itself, the Certificateholders and the Trustee or any of them, any and
all instruments of satisfaction or cancellation, or of partial or full release
or discharge and all other comparable instruments, and to effect such
modifications, waivers, indulgences and other like matters as are in its
judgment necessary or desirable, with respect to the Mortgage Loans and the
Mortgaged Properties and the servicing and administration thereof in order to
maximize collections on the Mortgage Loans subject to the limitations set forth
in this Agreement. The Servicer shall notify the Trustee of any such waiver,
release, discharge, modification, indulgence or other such matter by delivering
to the Trustee an Officer's Certificate certifying that such agreement is in
compliance with this Section 5.01(d) together with the original copy of any
written agreement or other document executed in connection therewith, all of
which written agreements or documents shall, for all purposes, be considered a
part of the related Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. Notwithstanding anything in this
Agreement to the contrary, the Servicer shall not permit any modification with
respect to any Mortgage Loan that would change the Mortgage Interest Rate,
reduce or increase the principal balance, change the lien priority, the original
CLTV or change the final maturity date on or of such Mortgage Loan unless the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Servicer, imminent; provided, however, that the Servicer
shall not extend the final maturity date of any Mortgage Loan beyond the date
which is six months after the latest Final Scheduled Maturity Date for any
outstanding Class of Offered Certificates, unless the Rating Agency Condition is
satisfied with respect thereto.
56
(e) The relationship of the Servicer (and of any successor to the
Servicer as servicer under this Agreement) to the Trustee under this Agreement
is intended by the parties to be that of an independent contractor and not that
of a joint venturer, partner or agent.
Section 5.02 Collection of Certain Mortgage Loan Payments; Collection
Account. (a) The Servicer shall make its 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,
follow the Accepted Servicing Practices. Consistent with the foregoing, the
Servicer may in its discretion waive any assumption fees or other fees which may
be collected in the ordinary course of servicing such Mortgage Loans.
(b) The Servicer shall establish and maintain in the name of the
Trustee the Collection Account, in trust for the benefit of the
Certificateholders. The Collection Account shall be established and maintained
as an Eligible Account.
(c) The Servicer shall deposit in the Collection Account any amounts
representing Monthly Payments on the Mortgage Loans due and accrued or to be
applied as of a date after the Cut-Off Date, and thereafter, on each Business
Day (except as otherwise permitted herein), the following payments and
collections received or made by it (other than in respect of principal collected
and interest due and accrued on the Mortgage Loans on or before the Cut-Off
Date):
(i) Payments of interest on the Mortgage Loans;
(ii) Payments of principal of the Mortgage Loans;
(iii) The Loan Repurchase Price of Mortgage Loans repurchased
pursuant to Sections 2.06, 3.03, 5.05, 5.15 or otherwise hereunder;
(iv) The Substitution Adjustment received in connection with
Mortgage Loans for which Qualified Substitute Mortgage Loans are
received pursuant to Sections 2.06 and 3.03;
(v) All Liquidation Proceeds; and
(vi) All Insurance Proceeds (including, for this purpose, any
amounts required to be deposited by the Servicer pursuant to the last
sentence of Section 5.04).
It is understood that the Servicer need not deposit amounts
representing fees, prepayment premiums, late payment charges or extension or
other administrative charges payable by Mortgagors, or amounts received by the
Servicer for the account of Mortgagors for application towards the payment of
taxes, insurance premiums, assessments and similar items.
(d) The Trustee shall invest any funds in the Collection Account in
Permitted Investments as directed in writing by the Servicer, which shall mature
not later than the Business Day next preceding the Servicer Remittance Date next
following the date of such investment (except that any investment held by the
Trustee may mature on such Servicer Remittance Date) and shall not be sold or
disposed of prior to its maturity. All net income and gain realized from any
such investment shall be for the benefit of the Servicer and shall be subject to
its withdrawal or order on a Distribution Date. The Servicer shall deposit from
its own funds the amount of any loss, to the extent not offset by investment
income or earnings, in the Collection Account upon the realization of such loss.
In the event that the Servicer fails to provide written investment instructions,
the Trustee shall invest such funds pursuant to clause (v) of the definition of
Permitted Investments.
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Section 5.03 Permitted Withdrawals from the Collection Account. The
Trustee shall make withdrawals from the Collection Account, on any Distribution
Date, for the following purposes:
(a) to reimburse the Servicer for Liquidation Expenses theretofore
incurred in respect of any Mortgage Loan in an amount not to exceed the amount
of the sum of the related Insurance Proceeds and Liquidation Proceeds deposited
in the Collection Account pursuant to Section 5.02(c)(v)-(vi);
(b) to reimburse the Servicer for amounts expended by it pursuant to
Section 5.04 in good faith in connection with the restoration of damaged
property, in an amount not to exceed the amount of the related Insurance
Proceeds and Liquidation Proceeds (net of withdrawals pursuant to clause (a)
above) and amounts representing proceeds of other insurance policies covering
the property subject to the related Mortgage deposited in the Collection Account
pursuant to Section 5.02(c)(v)-(vi);
(c) to pay to the Unaffiliated Seller amounts received in respect of
any Deleted Mortgage Loan purchased or substituted for by the Unaffiliated
Seller to the extent that the distribution to the Certificateholders of any such
amounts on the Distribution Date upon which the proceeds of such purchase are
distributed to the Certificateholders would make the total amount distributed in
respect of any such Mortgage Loan on such Distribution Date greater than the
Loan Repurchase Price or the Substitution Adjustment therefor;
(d) to reimburse the Servicer for unreimbursed Servicing Advances,
without interest, with respect to the Mortgage Loans for which it has made a
Servicing Advance, from subsequent collections with respect to interest on such
Mortgage Loans and from Liquidation Proceeds, Insurance Proceeds and/or the Loan
Repurchase Price or Substitution Adjustment of or relating to such Mortgage
Loans;
(e) to reimburse the Servicer for any Periodic Advances, such
reimbursement to be made from any collections in respect of the related Mortgage
Loan with respect to which such Periodic Advance was made;
(f) to withdraw any amount received from a Mortgagor that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court having competent jurisdiction;
58
(g) to withdraw any funds deposited in the Collection Account that were
not required to be deposited therein;
(h) to pay the Servicer Servicing Compensation pursuant to Section 5.08
hereof to the extent not retained or paid; and
(i) to remit funds to the Distribution Account pursuant to Section
6.01(c) hereof.
The Servicer shall keep and maintain a separate accounting for each
Mortgage Loan for the purpose of accounting for withdrawals from the Collection
Account pursuant to subclause (a).
Section 5.04 Hazard Insurance Policies; Property Protection Expenses.
(a) The Servicer shall cause to be maintained for each Mortgage Loan a hazard
insurance policy with extended coverage which contains a standard mortgagee's
clause with an appropriate endorsement in an amount equal to the lesser of (a)
the maximum insurable value of the related Mortgaged Property or (b) the sum of
the Principal Balance of such Mortgage Loan plus the outstanding balance of any
mortgage loan senior to such Mortgage Loan, but in no event shall such amount be
less than is necessary to prevent the Mortgagor from becoming a coinsurer
thereunder. The Servicer shall also maintain on property acquired upon
foreclosure, or by deed in lieu of foreclosure, hazard insurance with extended
coverage in an amount which is at least equal to the lesser of (i) the maximum
insurable value from time to time of the improvements which are a part of such
property or (ii) the combined Principal Balance of such Mortgage Loan and the
principal balance of any mortgage loan senior to such Mortgage Loan at the time
of such foreclosure plus accrued interest and the good-faith estimate of the
Servicer of related Liquidation Expenses to be incurred in connection therewith.
Amounts collected by the Servicer under any such policies shall be deposited in
the Collection Account to the extent that they constitute Liquidation Proceeds
or Insurance Proceeds. Each hazard insurance policy shall contain a standard
mortgage clause naming the Originator, its successors and assigns, as mortgagee.
Subject to Section 5.04(c), the Servicer shall be under no obligation to require
that any Mortgagor maintain earthquake or flood or other additional insurance
and shall be under no obligation itself to maintain any such additional
insurance on property acquired in respect of a Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
(b) If the Servicer shall obtain and maintain a blanket policy issued
by an insurer acceptable to the Rating Agencies insuring against hazard losses
on all of the Mortgage Loans, it shall conclusively be deemed to have satisfied
its obligations as set forth in Section 5.04(a), 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 a policy complying with Section 5.04(a), and there shall have
been a loss which would have been covered by such policy, deposit in the
Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause.
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(c) If the Mortgaged Property or REO Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area (and if the flood insurance policy referenced herein has been made
available), the Servicer will cause to be maintained flood insurance in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the Principal Balance of the related Mortgage Loan and the balance of the
related first lien, if any, (ii) the maximum insurable value of the related
Mortgaged Property, and (iii) 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).
Section 5.05 Assumption and Modification Agreements. In any case in
which a Mortgaged Property has been or is about to be conveyed by the Mortgagor,
the Servicer shall exercise its right to accelerate the maturity of the related
Mortgage Loan and require that the Principal Balance thereof be paid in full on
or prior to such conveyance by the Mortgagor under any "due-on-sale" clause
applicable thereto. If such "due-on-sale" clause, by its terms, is not operable
or the Servicer is prevented, as provided in the last paragraph of this Section
5.05, from enforcing any such clause, the Servicer is authorized to take or
enter into an assumption and modification agreement from or with the Person to
whom such property has been or is about to be conveyed, pursuant to which such
Person becomes liable under the Mortgage Note and the Mortgagor remains liable
thereon or, if the Servicer in its reasonable judgment finds it appropriate, is
released from liability thereon. The Servicer shall notify the Trustee and the
Collateral Agent that any assumption and modification agreement has been
completed by delivering to the Trustee an Officer's Certificate certifying that
such agreement is in compliance with this Section 5.05 together with the
original copy of such assumption and modification agreement. Any such assumption
and modification agreement shall, for all purposes, be considered a part of the
related Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. In connection with any such agreement, the then
current Mortgage Interest Rate thereon shall not be increased or decreased. Any
fee collected by the Servicer for entering into any such agreement will be
retained by the Servicer as additional servicing compensation. At its sole
election, the Servicer may purchase from the Trust Fund any Mortgage Loan that
has been assumed in accordance with this Section 5.05 within one month after the
date of such assumption at a price equal to the greater of (i) the fair market
value of such Mortgage Loan (as determined by the Servicer in its good faith
judgment) and (ii) the Loan Repurchase Price. Such amount, if any, shall be
deposited into the Collection Account in the Due Period in which such repurchase
is made.
Notwithstanding the foregoing paragraph of this Section 5.05 or any
other provision of this Agreement, the Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason of
any assumption of a Mortgage Loan, or transfer of any Mortgaged Property without
the assumption thereof, by operation of law or any assumption or transfer which
the Servicer reasonably believes it may be restricted by law from preventing for
any reason whatsoever.
Section 5.06 Realization Upon Defaulted Mortgage Loans. (a) The
Servicer shall foreclose upon or otherwise comparably convert to ownership
Mortgaged 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 5.02(a). Prior to
conducting any sale in a foreclosure proceeding or recording a deed-in-lieu of
foreclosure with respect to any Mortgaged Property, the Servicer shall cause an
environmental review to be performed, in accordance with Accepted Servicing
Practices on the Mortgaged Property by a company such as Equifax, Inc. or
Toxicheck. In connection with such foreclosure or other conversion, the Servicer
shall follow such practices (including, in the case of any default on a related
senior mortgage loan, the advancing of funds to correct such default) and
procedures which are consistent with Accepted Servicing Practices as it shall
deem necessary or advisable and as shall be normal and usual in its general
first and second mortgage loan servicing activities. The foregoing is subject to
the proviso that the Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the correction of any default on a
related senior mortgage loan or restoration of any property unless, in the
reasonable judgment of the Servicer, such expenses will be recoverable from
Liquidation Proceeds.
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(b) In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee on behalf of
Certificateholders. With respect to any REO Property, the Servicer either itself
or through an agent selected by the Servicer shall manage, conserve, protect and
operate such REO Property in the same manner and to such extent as is customary
in the locality where such REO Property is located. Any net income generated
from the REO Property and the proceeds from a sale of any REO Property shall be
deposited in the Collection Account. Any expenses incurred by the Servicer
pursuant to its obligations with respect to any REO Property shall constitute
Servicing Advances. In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, the Servicer shall: (i) dispose of such Mortgaged
Property prior to the end of the third taxable year after its acquisition by the
Trust Fund or (ii) in its capacity as Tax Matters Person, request more than 60
days prior to the date on which such 3 year period would otherwise expire, an
extension of the 3 year period; provided, however, that in the event the
Servicer shall have furnished the Trustee with an Opinion of Counsel to the
effect that the holding by the Trust Fund of such Mortgaged Property subsequent
to the third taxable year after its acquisition will not result in the
imposition of taxes on "prohibited transactions" of the Trust Fund as defined in
Section 860F of the Code or cause the Trust Fund to fail to qualify as a REMIC
at any time that any Certificates are outstanding, such disposition or extension
shall not be required.
(c) Any Insurance Proceeds or Liquidation Proceeds received with
respect to a Mortgage Loan or REO Property (other than received in connection
with a purchase by the Servicer of all the Mortgage Loans and REO Properties in
the Trust Fund pursuant to Section 8.01(b)) will be applied in the following
order of priority, in each case to the extent of available funds: first, to pay
the Servicer any accrued and unpaid Servicing Fees relating to such Mortgage
Loan; second, to reimburse the Servicer or any Subservicer for any related
unreimbursed Servicing Advances, and any related unreimbursed Periodic Advances
theretofore funded by the Servicer or any Subservicer from its own funds, in
each case, with respect to the related Mortgage Loan; third, to accrued and
unpaid interest on the Mortgage Loan, at the Mortgage Interest Rate (or at such
lesser rate as may be in effect for such Mortgage Loan pursuant to application
of the Civil Relief Act) on the Principal Balance of such Mortgage Loan, to the
date such Mortgage Loan is determined to be a Liquidated Mortgage Loan if it is
a Liquidated Mortgage Loan, or to the Due Date in the Due Period prior to the
Distribution Date on which such amounts are to be distributed if such
determination has not yet been made, minus any unpaid Servicing Fees with
respect to such Mortgage Loan; fourth, to the extent of the Principal Balance of
the Mortgage Loan outstanding immediately prior to the receipt of such proceeds,
as a recovery of principal of the related Mortgage Loan; and fifth, to any
prepayment or late payment charges or penalty interest payable in connection
with the receipt of such proceeds and to all other fees and charges due and
payable with respect to such Mortgage Loan. The amount of any gross Insurance
Proceeds and Liquidation Proceeds received with respect to any Mortgage Loan or
REO Property minus the amount of any unreimbursed Servicing Advances,
unreimbursed Periodic Advances or unpaid Servicing Fees, in each case, with
respect to the related Mortgage Loan, are the "Net Recovery Proceeds" with
respect to such Mortgage Loan or REO Property.
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Section 5.07 Trustee to Cooperate. Upon the payment in full of the
Principal Balance of any Mortgage Loan, the Servicer will notify the Trustee by
a certification (which certification shall include a statement to the effect
that all amounts received in connection with such payment which are required to
be deposited in the Collection Account pursuant to Section 5.02 have been so
deposited) of a Servicing Officer. Upon any such payment in full, the Servicer
is authorized to execute, pursuant to the authorization contained in Section
5.01, an instrument of satisfaction regarding the related Mortgage, which
instrument of satisfaction shall be recorded by the Servicer if required by
applicable law and be delivered to the Person entitled thereto, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction shall be reimbursed from the Collection Account. From
time to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan, the Collateral Agent on behalf of the Trustee shall, upon request of the
Servicer and delivery to the Trustee of a trust receipt signed by a Servicing
Officer, release the related Mortgage File to the Servicer and shall execute
such documents as shall be necessary for the prosecution of any such
proceedings. Such trust receipt shall obligate the Servicer to return the
Mortgage File to the Collateral Agent on behalf of the Trustee when the need
therefor by the Servicer no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the trust receipt shall be released by
the Collateral Agent on behalf of the Trustee to the Servicer.
Section 5.08 Servicing Compensation; Payment of Certain Expenses by
Servicer. On each Distribution Date, the Servicer shall be entitled to receive,
and the Trustee shall pay in the event such servicing compensation is not
retained by the Servicer, out of collections on the Mortgage Loans for the Due
Period, as servicing compensation for such Due Period, an amount (the "Monthly
Servicing Fee") equal to the product of one-twelfth of the Servicing Fee.
Additional servicing compensation in the form of assumption fees, late payment
charges or extension and other administrative charges shall be retained by the
Servicer. The Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder (including payment of all fees and
expenses of the Subservicer and payment of the Trustee Fee to the extent that
monies in the Collection Account are insufficient therefor, as provided in
Section 9.05 hereof, and all other fees and expenses not expressly stated
hereunder to be payable by or from another source) and shall not be entitled to
reimbursement therefor except as specifically provided herein.
Section 5.09 Annual Statement as to Compliance. (a) The Servicer will
deliver to the Trustee, the Rating Agencies and each Certificateholder, on or
before March 15 of each year, beginning March 15, 2003, an Officer's Certificate
of the Servicer stating that (a) a review of the activities of the Servicer
during the preceding calendar year and of its performance under this Agreement
has been made under such Responsible Officer's supervision and (b) to the best
of such officer's knowledge, based on such review, the Servicer has fulfilled
all its material 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 officer and the nature and status thereof.
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Section 5.10 Annual Independent Public Accountants' Servicing Report.
On or before March 15 of each year, beginning March 15, 2003, the Servicer at
its expense shall cause a firm of independent public accountants that is a
member of the American Institute of Certified Public Accountants (who may also
render other services to the Servicer) to furnish a report to the Trustee, the
Rating Agencies and each Certificateholder to the effect that such firm has
examined certain documents and records relating to the servicing of mortgage
loans under pooling and servicing agreements (including this Agreement)
substantially similar to this Agreement, and that such examination, which has
been conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers (to the extent that the procedures in such audit
guide are applicable to the servicing obligations set forth in such agreements),
has disclosed no items of noncompliance with the provisions of this Agreement
which, in the opinion of such firm, are material, except for such items of
noncompliance as shall be set forth in such report.
Section 5.11 Access to Certain Documentation. Each of the Servicer, the
Depositor and the Unaffiliated Seller shall permit the designated agents or
representatives of each Certificateholder and the Trustee (i) to examine and
make copies of and abstracts from all books, records and documents (including
computer tapes and disks) in the possession or under the control of the
Servicer, the Depositor or the Unaffiliated Seller relating to the Mortgage
Loans and (ii) to visit the offices and properties of the Servicer and of the
Unaffiliated Seller for the purpose of examining such materials and to discuss
matters relating to the Mortgage Loans and the Servicer's, the Depositor's and
the Unaffiliated Seller's performance under this Agreement with any of the
officers or employees of the Servicer, the Depositor and the Unaffiliated Seller
having knowledge thereof and with the independent public accountants of the
Servicer (and by this provision the Servicer and the Unaffiliated Seller each
authorize their respective accountants to discuss their respective finances and
affairs), all at such reasonable times, as often as may be reasonably requested
and without charge to such Certificateholder or the Trustee.
Section 5.12 Maintenance of Fidelity Bond. The Servicer shall during
the term of its service as servicer maintain in force a fidelity bond and errors
and omissions insurance in respect of its officers, employees or agents. Such
bond and insurance shall comply with the requirements from time to time of the
FNMA for Persons performing servicing for mortgage loans purchased by such
association.
Section 5.13 The Subservicers. The parties acknowledge that the
Servicer intends to appoint the Subservicers as the Servicer's agents for the
purpose of servicing on the Servicer's behalf such of the Mortgage Loans as were
originated by such subservicer. The Servicer agrees to cause the Subservicers to
service such Mortgage Loans in a manner consistent with the Accepted Servicing
Practices set forth in this Agreement, and agrees that receipt by the
Subservicers of any and all amounts which by the terms hereof are required to be
deposited in the Collection Account shall constitute receipt thereof by the
Servicer for all purposes hereof as of the date so received by the Subservicers.
Notwithstanding such designation of the Subservicers, the Servicer agrees that
it is, and it shall remain, fully obligated under the terms hereof as Servicer
with respect to all such Mortgage Loans, and nothing herein shall relieve or
release the Servicer from its obligations to the other parties hereto to service
such Mortgage Loans in the manner provided in this Agreement.
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Section 5.14 Reports to the Trustee; Collection Account Statements. Not
later than fifteen (15) days after each Distribution Date, the Servicer shall
provide to the Trustee a statement, certified by a Servicing Officer, setting
forth the status of the Collection Account as of the close of business on the
related Distribution Date, stating that all distributions required by this
Agreement to be made by the Servicer on behalf of the Trustee have been made (or
if any required distribution has not been made by the Servicer, specifying the
nature and status thereof) and showing, for the period covered by such
statement, the aggregate of deposits into and withdrawals from the Collection
Account for each category of deposit specified in Section 5.02 and each category
of withdrawal specified in Section 5.03 and the aggregate of deposits into the
Collection Account as specified in Section 6.01(c). Such statement shall also
state the aggregate unpaid principal balance of all the Mortgage Loans as of the
close of business on the last day of the month preceding the month in which such
Distribution Date occurs. Copies of such statement shall be provided by the
Trustee to any Certificateholder upon request.
Section 5.15 Optional Purchase of Defaulted Mortgage Loans. (a) The
Unaffiliated Seller, in its sole discretion, shall have the right, after the
aggregate Principal Balance of defaulted Mortgage Loans exceeds 1.50% of the
Original Aggregate Principal Balance, to elect (by written notice sent to the
Trustee), but shall not be obligated, to purchase for its own account from the
Trust Fund any Mortgage Loan which is one hundred and eighty (180) days or more
Delinquent in the manner and at the price specified in Section 2.06(c). The
purchase price for any Mortgage Loan purchased hereunder shall be deposited in
the Collection Account and the Trustee, upon receipt of such deposit, shall
release or cause to be released to the Unaffiliated Seller the related Trustee's
Mortgage File and shall execute and deliver such instruments of transfer or
assignment prepared by the Unaffiliated Seller, in each case without recourse,
as shall be necessary to vest in the Unaffiliated Seller any Mortgage Loan
released pursuant hereto and the Unaffiliated Seller shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan and all
security and documents related thereto. Such assignment shall be an assignment
outright and not for security. The Unaffiliated Seller shall thereupon own such
Mortgage Loan, and all security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto.
(b) If the Unaffiliated Seller shall have repurchased Mortgage Loans
under this Section 5.15 in an aggregate Principal Balance equal to 2.00% of the
Original Aggregate Principal Balance, the Unaffiliated Seller may not thereafter
exercise its right under this Section 5.15 to purchase any Mortgage Loan unless
it delivers to the Trustee an Opinion of Counsel that such repurchase will not
have a material adverse effect on the characterization as a sale for bankruptcy
purposes of the transfer of the Mortgage Loans from the Unaffiliated Seller to
the Depositor. Notwithstanding the foregoing, the Unaffiliated Seller shall in
no event repurchase Mortgage Loans pursuant to this Section 5.15 in an aggregate
Principal Balance in excess of 10.00% of the Original Aggregate Principal
Balance.
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Section 5.16 Reports to be Provided by the Servicer. (a) In connection
with the transfer of the Certificates, the Trustee on behalf of any
Certificateholder may request that the Servicer make available to any
prospective Certificateholder annual financial statements of the Servicer for
one or more of the most recently completed five fiscal years for which such
statements are available, which request shall not be unreasonably denied or
unreasonably delayed.
(b) The Servicer also agrees to make available on a reasonable basis to
any prospective Certificateholder a knowledgeable financial or accounting
officer for the purpose of answering reasonable questions respecting recent
developments affecting the Servicer or the financial statements of the Servicer
and to permit such prospective Certificateholder to inspect the Servicer's
servicing facilities during normal business hours for the purpose of satisfying
such prospective Certificateholder that the Servicer has the ability to service
the Mortgage Loans in accordance with this Agreement.
Section 5.17 Adjustment of Servicing Compensation in Respect of Prepaid
Mortgage Loans. The Monthly Servicing Fee that the Servicer shall be entitled to
receive with respect to all of the Mortgage Loans and each Distribution Date
shall be offset on such Distribution Date by an amount equal to the aggregate
Prepayment Interest Shortfall with respect to all Mortgage Loans which were
subjects of Principal Prepayments during the month preceding the month of such
Distribution Date. The amount of any offset against the Monthly Servicing Fee
with respect to any Distribution Date under this Section 5.17 shall be limited
to the Monthly Servicing Fee otherwise payable to the Servicer (without
adjustment on account of Prepayment Interest Shortfalls) with respect to such
Distribution Date, and the rights of the Certificateholders to the offset of the
aggregate Prepayment Interest Shortfalls shall not be cumulative.
Section 5.18 Periodic Advances; Special Advance. (a) If, on any
Servicer Remittance Date, the Servicer determines that any Monthly Payments due
on the Due Date immediately preceding such Servicer Remittance Date have not
been received as of the close of business on the Business Day preceding such
Servicer Remittance Date, the Servicer shall determine the amount of any
Periodic Advance required to be made with respect to the related Distribution
Date. The Servicer shall include in the amount to be deposited in the Collection
Account on such Servicer Remittance Date an amount equal to the Periodic
Advance, if any, which deposit may be made in whole or in part from funds in the
Collection Account being held for future distribution or withdrawal on or in
connection with Distribution Dates in subsequent months. Any funds being held
for future distribution to Certificateholders and so used shall be replaced by
the Servicer from its own funds by deposit in the Collection Account on or
before the Business Day preceding the next Servicer Remittance Date on which the
funds in the Collection Account shall be less than the amount necessary to pay
in full the distributions required to be made on such date; provided, that if
such funds are not sufficient the Servicer will use its own funds to the extent
necessary to fulfill its replacement or advance obligation.
The Servicer shall designate on its records the specific Mortgage Loans
and related installments (or portions thereof) as to which such Periodic Advance
shall be deemed to have been made, such determination being conclusive for
purposes of withdrawals from the Collection Account pursuant to Section 5.03.
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(b) In addition to the Periodic Advances the Servicer shall make a
special advance (the "Special Advance") on the Servicer Remittance Date
occurring in October 2002, with respect to interest on Mortgage Loans not having
their first payment due until after September 2002. The Special Advance will be
deposited into the Interest Reserve Account and, on the immediately succeeding
Distribution Date, an amount equal to the lesser of (1) the difference of (i)
the aggregate Class Monthly Interest Amount for each Class of Offered
Certificates for such Distribution Date over (ii) the sum of (x) the amount of
interest collected for the first Due Period and (y) the amount on deposit in the
Interest Reserve Account immediately prior to such Special Advance and (2) an
amount equal to the amount of interest that would have accrued on all such
Mortgage Loans from the Cut-Off Date to its corresponding scheduled payment
date, assuming it had a payment date in September 2002, will be transferred by
the Indenture Trustee from the Interest Reserve Account to the Distribution
Account and treated as a portion of the Interest Remittance Amount. Any funds
remaining in the Interest Reserve Account after the immediately succeeding
Distribution Date shall be remitted to the Servicer on such Distribution Date.
The Special Advance shall be made without regard to recoverability, and shall
not be reimbursable, except as set forth in the preceding sentences. In no event
shall the Trustee, as successor Servicer, be liable for the payment of the
Special Advance except to the extent of the amount on deposit in the Interest
Reserve Account.
Section 5.19 Indemnification; Third Party Claims. (a) The Servicer
agrees to indemnify and to hold each of the Depositor, the Trustee, the Back-up
Servicer, the Collateral Agent, the Unaffiliated Seller and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Depositor, the Trustee, the Back-up Servicer, the
Collateral Agent, the Unaffiliated Seller and any Certificateholder may sustain
in any way related to the failure of the Servicer to perform its duties and
service the Mortgage Loans in compliance with the terms of this Agreement. Each
indemnified party and the Servicer shall immediately notify the other
indemnified parties if a claim is made by a third party with respect to this
Agreement, and the Servicer shall assume 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 the Depositor, the Servicer, the Back-up Servicer, the Trustee, the
Unaffiliated Seller and/or a Certificateholder in respect of such claim. The
obligations of the Servicer under this Section 5.19 arising prior to any
resignation or termination of the Servicer hereunder shall survive the
resignation or termination of the Servicer.
(b) Upon receipt of written instruction from the Servicer, signed by a
Servicing Officer, the Trustee may, if necessary, reimburse the Servicer from
amounts otherwise distributable on the Class X and R Certificates for all
amounts advanced by it pursuant to Section 4.04 of the Unaffiliated Seller's
Agreement, except when the claim relates directly to the failure of the
Servicer, if it is, or is an Affiliate of, the Unaffiliated Seller, to perform
its obligations to service and administer the Mortgages in compliance with the
terms of the Unaffiliated Seller's Agreement, or the failure of the Unaffiliated
Seller to perform its duties in compliance with the terms of this Agreement.
(c) Upon receipt of written instruction from the Servicer, signed by a
Servicing Officer, the Trustee shall reimburse the Unaffiliated Seller from
amounts otherwise distributable on the Class X and R Certificates for all
amounts advanced by the Unaffiliated Seller pursuant to the second sentence of
Section 4.04(a) of the Unaffiliated Seller's Agreement except when the relevant
claim relates directly to the failure of the Unaffiliated Seller to perform its
duties in compliance with the terms of the Unaffiliated Seller's Agreement.
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Section 5.20 Maintenance of Corporate Existence and Licenses; Merger or
Consolidation of the Servicer. (a) The Servicer will keep in full effect its
existence, rights and franchises as a corporation, will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction
necessary to protect the validity and enforceability of this Agreement or any of
the Mortgage Loans and to perform its duties under this Agreement and will
otherwise operate its business so as to cause the representations and warranties
under Section 3.01 to be true and correct at all times under this Agreement.
(b) Any Person into which the Servicer may be merged or consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Servicer shall be a party, or any Person succeeding to the business of
the Servicer, shall be an established mortgage loan servicing institution that
has a net worth of at least $15,000,000 and is a Permitted Transferee, and in
all events shall be the successor of the Servicer 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. The Servicer shall send notice
of any such merger or consolidation to the Trustee.
Section 5.21 Assignment of Agreement by Servicer; Servicer Not to
Resign. The Servicer shall not assign this Agreement nor resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Back-up Servicer, the Unaffiliated Seller and the Trustee;
provided, however, that in the event the Servicer is terminated pursuant to
Section 7.01 hereof, the consent of the Unaffiliated Seller shall no longer be
required, or upon the determination that the Servicer's duties hereunder are no
longer permissible under applicable law and that such incapacity cannot be cured
by the Servicer without incurring unreasonable expense. Any such determination
that the Servicer's duties hereunder are no longer permissible under applicable
law permitting the resignation of the Servicer shall be evidenced by a written
Opinion of Counsel (who may be outside counsel for the Servicer) to such effect
delivered to the Trustee, the Back-up Servicer, the Unaffiliated Seller and the
Depositor. No such resignation shall become effective until the Trustee or a
successor appointed in accordance with the terms of this Agreement has assumed
the Servicer's responsibilities and obligations hereunder in accordance with
Section 7.02. The Servicer shall provide the Trustee, the Back-up Servicer and
the Rating Agencies with 30 days prior written notice of its intention to resign
pursuant to this Section 5.21.
Section 5.22 Periodic Filings with the Securities and Exchange
Commission; Additional Information. The Trustee shall prepare or cause to be
prepared, and shall execute as trustee on behalf of the Trust, for filing with
the Commission (other than the initial Current Report on Form 8-K to be filed by
the Depositor in connection with the issuance of the Certificates) any and all
reports, statements and information respecting the Trust and/or the Certificates
required to be filed, and shall solicit any and all proxies of the
Certificateholders whenever such proxies are required to be solicited, pursuant
to the Securities Exchange Act of 1934, as amended. Unless otherwise advised by
the Servicer (with the consent of the Depositor), the reports to be filed shall
consist only of the following: 8-K reports attaching the related Servicer
Remittance Report, to be filed in October of 2002 through December of 2002, a
Form 10-K to be filed no later than March 31 of 2003, including any accountant's
report referred to in Section 5.10, and a Form 15 to be filed in January 2003.
The Servicer shall prepare, execute and deliver to the Trustee for filing with
the Commission no later than March 15 of each year in which a Form 10-K is filed
with the Commission the certification required under Section 302(a) of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (as such may be amended from time to time) and any
rules or regulations promulgated with respect thereto (which certification shall
be executed by the Servicer). Fees and expenses incurred by the Trustee in
connection with the foregoing shall be reimbursed pursuant to Section 9.05 and
shall not be paid by the Trust.
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The Servicer agrees to promptly furnish to the Trustee, from time to
time upon request, such further information, reports and financial statements as
the Trustee deems appropriate to prepare and file all necessary reports with the
Securities and Exchange Commission.
ARTICLE VI
DISTRIBUTIONS AND PAYMENTS
Section 6.01 Establishment of Accounts; Withdrawals from Accounts;
Deposits to the Distribution Account. (a) The Trustee shall establish and
maintain a Distribution Account which shall be titled "Distribution Account,
JPMorgan Chase Bank, as trustee for the registered holders of ABFS Mortgage Loan
Trust 2002-3, Mortgage Pass-Through Certificates, Series 2002-3", which account
shall be an Eligible Account held by the Trustee on behalf of the
Certificateholders. The Trustee shall establish and maintain on behalf of the
Certificateholders the Interest Reserve Account which shall be titled "Interest
Reserve Account, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, as trustee for the registered holders of
ABFS Mortgage Loan Trust 2002-3, Mortgage Pass-Through Certificates, Series
2002-3" which account shall be an Eligible Account. Upon receipt of the proceeds
of the sale of the Certificates, on the Closing Date, the Trustee shall, upon
the Unaffiliated Seller's direction, from the proceeds of the sale of the
Certificates, deposit, on behalf of the Certificateholders in the Interest
Reserve Account, an amount equal to $[__]. Amounts on deposit in the Interest
Reserve Account shall be invested by the Trustee, at the direction of the
Servicer in Permitted Investments. In the event that the Servicer fails to
provide written investment instructions, the Trustee shall invest such funds
pursuant to clause (v) of the definition of Permitted Investments. Any such
Permitted Investment shall mature no later than the Servicer Remittance Date.
All income realized from any such Permitted Investment shall be for the benefit
of the Servicer as additional servicing compensation. The amount of any losses
incurred in respect of any such Permitted Investment shall be deposited in the
Interest Reserve Account by the Servicer out if its own funds immediately as
realized.
(b) The Servicer shall direct the Trustee in writing to invest the
funds in the Distribution Account only in Permitted Investments. Any such
Permitted Investment shall mature no later than one Business Day prior to the
Distribution Date. No Permitted Investment shall be sold or disposed of prior to
maturity. All income realized from any such Permitted Investment shall be for
the benefit of the Servicer as additional servicing compensation. The amount of
any losses incurred in respect of any such investments shall be deposited in the
Distribution Account by the Servicer out of its own funds immediately as
realized.
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(c) On each Servicer Remittance Date, the Servicer shall cause to be
deposited in the Distribution Account, from funds on deposit in the Collection
Account, (a) an amount equal to the Servicer Remittance Amount and (b) Net
Foreclosure Profits, if any with respect to the related Distribution Date, minus
any portion thereof payable to the Servicer pursuant to Section 5.03. On each
Servicer Remittance Date, the Servicer shall also deposit into the Distribution
Account any Periodic Advances with respect to the related Distribution Date
calculated in accordance with Section 5.18.
Section 6.02 Permitted Withdrawals From the Distribution Account. The
Trustee shall withdraw or cause to be withdrawn funds from the Distribution
Account for the following purposes:
(a) to effect the distributions described in Section 6.05;
(b) to pay to the Unaffiliated Seller with respect to each Mortgage
Loan or property acquired in respect thereof that has been repurchased or
replaced pursuant to Section 2.05 or 3.03 or to pay to the Servicer with respect
to each Mortgage Loan or property acquired in respect thereof that has been
purchased, all amounts received thereon and not required to be distributed as of
the date on which the related repurchase or purchase price or Principal Balance
was determined;
(c) to pay the Servicer any interest earned on or investment income
earned with respect to funds in the Distribution Account;
(d) to return to the Collection Account any amount deposited in the
Distribution Account that was not required to be deposited therein; and
(e) to clear and terminate the Distribution Account upon termination of
the Trust Fund pursuant to Article VIII.
The Trustee shall keep and maintain a separate accounting for
withdrawals from the Distribution Account pursuant to each of subclauses (a)
through (e) listed above.
Section 6.03 Collection of Money. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of all money and
other property payable to or receivable by the Trustee pursuant to this
Agreement, including all payments due on the Mortgage Loans in accordance with
the respective terms and conditions of such Mortgage Loans and required to be
paid over to the Trustee by the Servicer or by any Sub-Servicer. The Trustee
shall hold all such money and property received by it, as part of the Trust Fund
and shall apply it as provided in this Agreement.
Section 6.04 [RESERVED]
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Section 6.05 Distributions. No later than 12:00 noon, New York, New
York time on the Servicer Remittance Date, the Servicer shall deliver to the
Trustee and the Back-up Servicer a report in computer-readable form containing
such information as to enable the Trustee to make the distributions pursuant to
clauses (a) through (e) below, and such other information as the Trustee shall
reasonably require. With respect to amounts held in the Distribution Account, on
each Distribution Date, the Trustee shall make the following allocations,
disbursements and transfers in the following order of priority, and each such
allocation, transfer and disbursement shall be treated as having occurred only
after all preceding allocations, transfers and disbursements have occurred:
(a) Interest Distributions. On each Distribution Date, the Interest
Remittance Amount will be distributed in the following order of priority until
such amounts have been fully distributed:
(i) first, to the Servicer, the Servicing Fee, to the extent such
amounts were not previously retained by the Servicer;
(ii) second, to the Trustee, the Trustee Fee;
(iii) third, to the Back-up Servicer, the Back-up Servicing Fee and
amounts owing to the Back-up Servicer in connection with the
transfer of servicing after the resignation or removal of the
Servicer, in an amount not to exceed $200,000 in the
aggregate;
(iv) fourth, to each Class of the Senior Certificates, the Class
Monthly Interest Amount and any Class Interest Carryover
Shortfall for such Class on that Distribution Date; provided,
however, that if the Interest Remittance Amount is not
sufficient to make a full distribution of the Class Monthly
Interest Amount and Class Interest Carryover Shortfall with
respect to each Class of Senior Certificates, the Interest
Remittance Amount will be distributed pro rata among each
Class of the Senior Certificates based on the ratio of the
Class Monthly Interest Amount and Class Interest Carryover
Shortfall for such Class to the total amount of Class Monthly
Interest Amount and any Class Interest Carryover Shortfall for
the Senior Certificates;
(v) fifth, to the Class M-1 Certificates, the Class Monthly
Interest Amount for such Class and Distribution Date;
(vi) sixth, to the Class M-2 Certificates, the Class Monthly
Interest Amount for such Class and Distribution Date;
(vii) seventh, to the Class B Certificates, the Class Monthly
Interest Amount for such Class and Distribution Date; and
(viii) eighth, any remainder will be treated as Excess Interest.
(b) Principal Distributions. On each Distribution Date, the Principal
Distribution Amount for that Distribution Date will be distributed in the
following order of priority until such amounts have been fully distributed:
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(i) to the Class A Certificates, the Senior Principal Distribution
Amount;
(ii) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount;
(iii) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount;
(iv) to the Class B Certificates, the Class B Principal
Distribution Amount;
(v) to the Class X Certificates, an amount up to the remaining
Aggregate Principal Balance of the Mortgage Loans; and
(vi) to the Class R Certificates, any remaining amount.
(c) Excess Interest. On each Distribution Date, Excess Interest will be
distributed in the following order of priority until fully distributed:
(i) an amount equal to the Overcollateralization Increase Amount,
to be applied as part of the Principal Distribution Amount
pursuant to paragraph (b) above;
(ii) to the Class M-1 Certificates, the Class Interest Carryover
Shortfall for such Class;
(iii) to the Class M-1 Certificates, the Class Principal Carryover
Shortfall for such Class;
(iv) to the Class M-2 Certificates, the Class Interest Carryover
Shortfall for such Class;
(v) to the Class M-2 Certificates, the Class Principal Carryover
Shortfall for such Class;
(vi) to the Class B Certificates, the Class Interest Carryover
Shortfall for such Class;
(vii) to the Class B Certificates, the Class Principal Carryover
Shortfall for such Class;
(viii) to the Supplemental Interest Payment Account, as a
distribution to the Holders of the Class X Certificates, the
lesser of (x) the Class X Distribution Amount and (y) the WAC
Excess:
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(ix) to the Trustee, to the extent not previously paid, an amount
equal to the sum of all reimbursable expenses incurred in
connection with its duties and obligations under this
Agreement and for any indemnity amounts payable to the Trustee
under this Agreement;
(x) to the Back-up Servicer, to the extent not paid pursuant to
Section 6.05(a), any amounts owing to the Back-up Servicer in
connection with the transfer of servicing after the
resignation or removal of the Servicer;
(xi) to the Servicer to the extent of any unreimbursed Servicing
Advances;
(xii) to the Class X Certificates, the Class X Distribution Amount
less any amounts thereof applied pursuant to clauses (viii),
(ix), (x) and (xi) above; and
(xiii) to the Class R Certificates, any remaining amount.
(e) Allocation of Mortgage Loan Interest Shortfalls. On any
Distribution Date, any Mortgage Loan Interest Shortfalls for such Distribution
Date will be allocated as a reduction of the following amounts in the following
order of priority:
(i) to the amount payable to the Class X Certificates; and
(ii) pro rata, as a reduction of the Class Monthly Interest Amount
for the Class A, Class A-IO, Class M-1, Class M-2 and Class B
Certificates, based on the amount of interest to which such
Classes would otherwise be entitled.
(d) Allocation of Applied Realized Loss Amounts. If on any Distribution
Date, after giving effect to all distributions of principal as described above,
the aggregate Certificate Principal Balance of the Offered Certificates exceeds
the sum of the Aggregate Principal Balance of the Mortgage Loans, the
Certificate Principal Balance of the applicable Subordinate Certificates will be
reduced, in inverse order or seniority (beginning with the Class B Certificates)
by an amount equal to that excess, until the Certificate Principal Balance of
such Class of Subordinate Certificates is reduced to zero. Any Applied Realized
Loss Amounts allocated to a Class of Subordinate Certificates shall be allocated
among the Subordinate Certificates of such Class in proportion to their
respective Percentage Interests.
Section 6.06 Investment of Accounts. (a) So long as no Event of
Default shall have occurred and be continuing, and consistent with any
requirements of the Code, all or a portion of any Account held by the Trustee
shall be invested and reinvested by the Trustee, as directed in writing by the
Servicer, in one or more Permitted Investments bearing interest or sold at a
discount. If an Event of Default shall have occurred and be continuing or if the
Servicer does not provide investment directions, the Trustee shall invest all
Accounts in Permitted Investments described in paragraph (v) of the definition
of Permitted Investments. No such investment in any Account shall mature later
than the Business Day immediately preceding the next Distribution Date.
(b) Subject to Section 6.01(b), if any amounts are needed for
disbursement from any Account held by the Trustee and sufficient uninvested
funds are not available to make such disbursement, the Trustee shall cause to be
sold or otherwise converted to cash a sufficient amount of the investments in
such Account. The Trustee shall not be, and the Servicer shall be, liable for
any investment loss or other charge resulting therefrom unless the Trustee's
failure to perform in accordance with this Section 6.06 is the cause of such
loss or charge.
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(c) Subject to Section 9.01 hereof, the Trustee shall not in any way be
held liable by reason of any insufficiency in any Account held by the Trustee
resulting from any investment loss on any Permitted Investment included therein
(except to the extent that the Trustee is the obligor and has defaulted thereon
or as provided in subsection (b) of this Section 6.06).
(d) So long as no Event of Default shall have occurred and be
continuing, all net income and gain realized from investment of, and all
earnings on, funds deposited in any Account shall be for the benefit of the
Servicer as servicing compensation (in addition to the Servicing Fee). The
Servicer shall deposit in the related Account the amount of any loss incurred in
respect of any Permitted Investment held therein which is in excess of the
income and gain thereon immediately upon realization of such loss, without any
right to reimbursement therefor from its own funds.
Section 6.07 Reports. (a) On each Distribution Date the Trustee shall
forward to each Holder, the Underwriters, the Depositor, the Back-up Servicer
and the Rating Agencies the report provided by the Servicer pursuant to Section
6.05 (the "Servicer Remittance Report"), setting forth information including,
without limitation, the following:
(i) the amount of the distribution with respect to each Class of
Certificates;
(ii) the amount of such distributions allocable to principal,
separately identifying the aggregate amount of any Principal
Prepayments or other unscheduled recoveries of principal
included therein and separately identifying any
Overcollateralization Increase Amounts;
(iii) the amount of such distributions allocable to interest and the
calculation thereof;
(iv) the Certificate Principal Balance of each Class of Offered
Certificates, other than the Class A-IO Certificates, as of
such Distribution Date, together with the principal amount of
each such Class (based on a Certificate in an original
principal amount of $1,000) then outstanding, in each case
after giving effect to any payment of principal on such
Distribution Date;
(v) the Class A-IO Notional Balance then outstanding as of such
Distribution Date, after giving effect to any payment of
interest on such Distribution Date;
(vi) the total of any Substitution Adjustments and any Loan
Repurchase Price amounts included in such distribution; and
(vii) the amounts, if any, of any Liquidated Loan Losses for
consumer purpose loans and for business purpose loans for the
related Due Period and cumulative Liquidated Loan Losses since
the Startup Date for consumer purpose loans and for business
purpose loans.
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Items (i), (ii) and (iii) above shall, with respect to the Offered
Certificates (other than the Class A-IO Certificates), be presented on the basis
of a Certificate having a $1,000 denomination. In addition, by January 31 of
each calendar year following any year during which the Certificates are
outstanding, the Trustee shall furnish a report to each Holder of record if so
requested in writing at any time during each calendar year as to the aggregate
of amounts reported pursuant to (i), (ii) and (iii) with respect to the
Certificates for such calendar year.
(b) All distributions made to the Certificateholders of each Class as a
Class on each Distribution Date will be made on a pro rata basis among the
Certificateholders of each Class on the next preceding Record Date based on the
Percentage Interest represented by their respective Certificates, and shall be
made by wire transfer of immediately available funds to the account of such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if, in the case of a Holder of an Offered Certificate, such
Certificateholder shall own of record Certificates of the same Class which have
denominations aggregating at least $5,000,000 appearing in the Certificate
Register and shall have provided complete wiring instructions at least five
Business Days prior to the Record Date, and otherwise by check mailed to the
address of such Certificateholder appearing in the Certificate Register.
(c) In addition, the Servicer Remittance Report described in subsection
(a) above forwarded by the Trustee to each Holder, to the Underwriters, to the
Servicer, to the Back-up Servicer, to the Depositor and to the Rating Agencies
on each Distribution Date, shall include the following information with respect
to all Mortgage Loans as well as a break out as to (x) consumer purpose and (y)
business purpose Mortgage Loans as of the close of business on the last Business
Day of the prior calendar month (except as otherwise provided in clause (v)
below), which is hereby required to be prepared by the Servicer and furnished to
the Trustee for such purpose on or prior to the related Servicer Remittance
Date:
(i) for the related Due Period, the total number of Mortgage
Loans and the aggregate Principal Balances thereof, together with the
number, aggregate principal balances of such Mortgage Loans and the
percentage (based on the aggregate Principal Balances of the Mortgage
Loans) of the aggregate Principal Balances of such Mortgage Loans to
the aggregate Principal Balance of all Mortgage Loans (A) 31-60 days
Delinquent, (B) 61-90 days Delinquent and (C) 91 or more days
Delinquent;
(ii) for the related Due Period, the number, aggregate
Principal Balances of all Mortgage Loans and percentage (based on the
aggregate Principal Balances of the Mortgage Loans) of the aggregate
Principal Balances of such Mortgage Loans to the aggregate Principal
Balance of all Mortgage Loans in foreclosure proceedings and the
number, aggregate Principal Balances of all Mortgage Loans and
percentage (based on the aggregate Principal Balances of the Mortgage
Loans) of any such Mortgage Loans also included in any of the
statistics described in the foregoing clause (i);
(iii) for the related Due Period, the number, aggregate
Principal Balances of all Mortgage Loans and percentage (based on the
aggregate Principal Balances of the Mortgage Loans) of the aggregate
Principal Balances of such Mortgage Loans to the aggregate Principal
Balance of all Mortgage Loans relating to Mortgagors in bankruptcy
proceedings and the number, aggregate Principal Balances of all
Mortgage Loans and percentage (based on the aggregate Principal
Balances of the Mortgage Loans) of any such Mortgage Loans also
included in any of the statistics described in the foregoing clause
(i);
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(iv) for the related Due Period, the number, aggregate
Principal Balances of all Mortgage Loans and percentage (based on the
aggregate Principal Balances of the Mortgage Loans) of the aggregate
Principal Balances of such Mortgage Loans to the aggregate Principal
Balance of all Mortgage Loans relating to REO Properties and the
number, aggregate Principal Balances of all Mortgage Loans and
percentage (based on the aggregate Principal Balances of the Mortgage
Loans) of any such Mortgage Loans also included in any of the
statistics described in the foregoing clause (i);
(v) the weighted average Mortgage Interest Rate as of the Due
Date occurring in the Due Period related to such Distribution Date;
(vi) the weighted average remaining term to stated maturity of
all Mortgage Loans;
(vii) the book value of any REO Property;
(viii) the Cumulative Loss Percentage for the related Due
Period and the aggregate Cumulative Loss Percentage since the Closing
Date;
(ix) the Delinquency Ratio and the Rolling Three Month
Delinquency Rate;
(x) the aggregate Principal Balance of the three largest
Mortgage Loans; and
(xi) the total number of Mortgage Loans and the Aggregate
Principal Balance.
(d) No later than 12:00 noon, New York, New York time on the Servicer
Remittance Date, the Servicer shall deliver to the Back-up Servicer an
electronic transmission acceptable to the Back-up Servicer containing the
Servicer Remittance Report and the Required Information with respect to such
Servicer Remittance Date. No later than three (3) Business Days after each
Servicer Remittance Date, the Back-up Servicer shall use such electronic
transmission acceptable to the Back-up Servicer to (i) confirm that such
electronic transmission is in readable form and (ii) compare the following
information contained in the Servicer Remittance Report with that contained in
the Required Information: (A) the total number of Mortgage Loans, (B) the
aggregate Principal Balance of the Mortgage Loans and (C) the weighted average
Mortgage Interest Rate. The Back-up Servicer shall report any inconsistencies to
the Servicer and the Trustee. The Back-up Servicer shall only review the
information provided by the Servicer in the Servicer Remittance Report and in
the Required Information and its obligation to report any inconsistencies shall
be limited to those apparent from the Back-up Servicer's review thereof and
those relating to the total number of Mortgage Loans, the aggregate Principal
Balance of the Mortgage Loans or the weighted average Mortgage Interest Rate. In
the event that the Back-up Servicer reports any discrepancies, the Servicer and
the Back-up Servicer shall attempt to reconcile such discrepancies prior to the
next succeeding Distribution Date, but in the absence of a reconciliation, the
Servicer's Remittance Report shall control for the purpose of calculations and
distributions with respect to the next succeeding Distribution Date. In the
event that the Back-up Servicer and the Servicer are unable to reconcile
discrepancies with respect to a Servicer's Remittance Report by the next
succeeding Distribution Date, the Servicer shall cause a firm of independent
certified public accountants, at the Servicer's expense, to audit the Servicer's
Remittance Report and, prior to the last day of the month after the month in
which such Servicer's Remittance Report was delivered, reconcile the
discrepancies. The effect, if any, of such reconciliation shall be reflected in
the Servicer's Remittance Report for the next succeeding Distribution Date.
Other than the duties specifically set forth in this Agreement, the Back-up
Servicer shall have no obligations hereunder, including, without limitation, to
supervise, verify, monitor or administer the performance of the Servicer. The
Back-up Servicer shall have no liability for any actions taken or omitted by the
Servicer.
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Section 6.08 Additional Reports by Trustee. (a) The Trustee shall
report to the Depositor and the Servicer with respect to the amount then held in
each Account (including investment earnings accrued or scheduled to accrue) held
by the Trustee and the identity of the investments included therein, as the
Depositor or the Servicer may from time to time request in writing.
(b) From time to time, at the request of the Rating Agencies, the
Trustee shall report to the Rating Agencies with respect to its actual
knowledge, without independent investigation, of any breach of any of the
representations or warranties relating to individual Mortgage Loans set forth in
any Unaffiliated Seller's Agreement or in Section 3.01 or 3.02 hereof. The
Trustee shall also provide the Rating Agencies such other information as may be
reasonably requested by them.
Section 6.09 Compensating Interest. Not later than the Servicer
Remittance Date, the Servicer shall remit to the Trustee (without right of
reimbursement therefor) for deposit into the Distribution Account an amount
equal to the lesser of (a) the aggregate of the Prepayment Interest Shortfalls
for the related Distribution Date resulting from Principal Prepayments during
the related Due Period and (b) its aggregate Monthly Servicing Fees received in
the related Due Period and shall not have the right to reimbursement therefor
(the "Compensating Interest"); provided, however, that Compensating Interest
with respect to any Mortgage Loan and any Distribution Date shall not exceed the
Servicing Fees due in respect of such Mortgage Loan on such Distribution Date.
Section 6.10 Supplemental Interest Payment Account. (a) The parties
hereto do hereby create and establish a trust, the "ABFS Mortgage Loan
Supplemental Interest Trust 2002-3" (the "Supplemental Interest Trust"). The
Supplemental Interest Trust shall hold a trust account at the corporate trust
office of the Trustee; the "Supplemental Interest Payment Account" to be held by
the Trustee in its name on behalf of the Supplemental Interest Trust. None of
the assets of the Supplemental Interest Trust shall be considered assets of the
REMIC Trust, and any amounts transferred from the REMIC Trust to the
Supplemental Interest Trust shall be treated as distributions with respect to
the Class X Certificates.
(b) On each Distribution Date, the Trustee shall, based on the
distribution information provided by the Servicer, withdraw the Supplemental
Interest Payment Amount Available from the Supplemental Interest Payment Account
and pay to the applicable owners of each Supplemental Interest Right (which
owners shall, in the absence of contrary instructions received by the Trustee
from the applicable Holders of the Capped Certificates, be the Holders of the
related Capped Certificates), the following amounts in the following priority:
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(i) to the Class A Certificates, the Net WAC Cap Carryover
Amount for such Class; and
(ii) sequentially to the Class M-1, Class M-2 and Class B
Certificates, in that order, the Net WAC Cap Carryover Amount for each
such Class.
(c) Any portion of the Supplemental Interest Payment Amount Available
remaining after application of clause (b) above shall be distributed to the
owners of the Class X Certificates pro rata in accordance with their Percentage
Interests.
(d) The Trustee, on behalf of the Supplemental Interest Trust, shall
comply with all requirements of the Code and applicable state and local law with
respect to the withholding from any distributions made by it to any Person
entitled thereto of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith.
(e) Notwithstanding any other provision of this Section 6.10, the
Supplemental Interest Rights shall be separately transferable from the related
Capped Certificates, subject to the restrictions on transfer set forth in
Article IV hereof.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. (a) In case one or more of the
following events (each an "Event of Default") shall occur and be continuing:
(i) any failure by the Servicer to remit to the Trustee any
payment required to be made by the Servicer under the terms of this
Agreement which continues unremedied for one (1) Business Day after the
date upon which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer by the Trustee or to
the Servicer and the Trustee by the Certificateholders of Offered
Certificates evidencing Percentage Interests of at least 25%;
(ii) the failure by the Servicer to make any required
Servicing Advance which failure continues unremedied for a period of
thirty (30) days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Servicer by the Trustee or to the Servicer and the Trustee by any
Certificateholder;
(iii) any 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 contained in this Agreement, or
the failure of any representation and warranty made pursuant to Section
3.01 to be true and correct which continues unremedied for a period of
thirty (30) days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Servicer, as the case may be, by the Depositor or the Trustee or to
the Servicer and the Trustee by any Certificateholder;
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(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction in an involuntary case under any present
or future federal or state bankruptcy, insolvency or similar law or for
the appointment of a conservator or receiver or liquidator in any
insolvency, 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 forty-five (45) days;
(v) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, 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 the Servicer's property;
(vi) the Servicer shall admit in writing its inability to pay
its debts 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;
(vii) if on any Distribution Date a Servicer Termination Loss
Trigger Event occurs; or
(viii) any Change of Control shall occur.
Then, and in each and every such case, so long as such Event of Default
shall not have been remedied: (x) with respect solely to clause (i) above, if
such payment is in respect of Periodic Advances or Compensating Interest owing
by the Servicer and such payment is not made by 12:00 Noon, New York time on the
fourth Business Day prior to the applicable Distribution Date, the Trustee, upon
receipt of written notice or discovery by a Responsible Officer of such failure,
shall give immediate telephonic notice of such failure to a Servicing Officer of
the Servicer and the Trustee may, at the direction of the majority holders of
any Class of Offered Certificates, with the consent of the Controlling Party,
and shall, at the direction of the Controlling Party, terminate all of the
rights and obligations of the Servicer under this Agreement and the Back-up
Servicer, or a successor servicer appointed in accordance with Section 7.02,
shall immediately make such Periodic Advance or payment of Compensating Interest
and assume, pursuant to Section 7.02 hereof, the duties of a successor Servicer;
(y) with respect to clause (xi) above, such Event of Default shall be waived in
the event the Servicer receives the consent of the Controlling Party, such
consent not to be unreasonably withheld; and (z) with respect to any other Event
of Default, the Trustee shall, at the direction of the Controlling Party, by
notice in writing to the Servicer and a Responsible Officer of the Trustee,
terminate all the rights and obligations of the Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof, as servicer. Upon
receipt by the Servicer of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall, subject to Section 7.02, pass to and be vested in the Back-up
Servicer or such other Person as may be specified by the Controlling Party and
the Back-up Servicer is hereby authorized and empowered to execute and deliver,
on behalf of the Servicer, as attorney-in-fact or otherwise, at the expense of
the Servicer, any and all documents and other instruments and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including, but not limited to, the transfer and
endorsement or assignment of the Mortgage Loans and related documents. The
Servicer agrees to cooperate (and pay any related costs and expenses) with the
Trustee and the Back-up Servicer in effecting the termination of the Servicer's
responsibilities and rights hereunder and the transfer of such responsibilities
and rights to a successor Servicer, including, without limitation, the transfer
to the Back-up Servicer or its designee for administration by it of all amounts
which shall at the time be credited by the Servicer to the Collection Account or
thereafter received with respect to the Mortgage Loans. The Trustee shall
promptly notify the Rating Agencies of the occurrence of an Event of Default.
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Section 7.02 Back-up Servicer to Act; Appointment of Successor. (a) On
and after the time the Servicer receives a notice of termination pursuant to
Section 7.01, or the Trustee receives the resignation of the Servicer evidenced
by an Opinion of Counsel pursuant to Section 5.21, the Trustee shall promptly
notify the Rating Agencies, except as otherwise provided in Section 7.01, the
Back-up Servicer or such other Person as may be specified by the Controlling
Party shall be the successor in all respects 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
arising on or after the date of succession; provided, however, that the Back-up
Servicer shall not be liable for any actions or the representations and
warranties of any servicer prior to it and including, without limitation, the
obligations of the Servicer set forth in Sections 2.06 and 3.03. The Back-up
Servicer, as successor servicer, shall be obligated to pay Compensating Interest
pursuant to Section 6.09 in any event and to make advances pursuant to Section
5.18 unless, and only to the extent the Back-up Servicer determines reasonably
and in good faith that such advances would not be recoverable pursuant to
Section 5.04, such determination to be evidenced by a certification of a
Responsible Officer of the Back-up Servicer delivered to the Rating Agencies.
(b) Notwithstanding the above, the Trustee may, if the Back-up Servicer
shall be unwilling to so act, or shall, if the Back-up Servicer is unable to so
act or if the Controlling Party so requests in writing to the Trustee, appoint,
pursuant to such direction of the Controlling Party, or if no such direction is
provided to the Trustee, pursuant to the provisions set forth in paragraph (c)
below, or petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution that has a net worth of not less than
$15,000,000 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.
(c) In the event the Back-up Servicer is the successor servicer, it
shall be entitled to the same Servicing Compensation (including the Servicing
Fee as adjusted pursuant to the definition thereof) and other funds pursuant to
Section 5.08 hereof as the Servicer if the Servicer had continued to act as
servicer hereunder; it being understood that, in such event, the Back-up
Servicer would no longer be entitled to the Back-up Servicing Fee. In the event
the Back-up Servicer is unable or unwilling to act as successor servicer, the
Trustee shall solicit, by public announcement, bids from housing and home
finance institutions, banks and mortgage servicing institutions meeting the
qualifications set forth above. Such public announcement shall specify that the
successor servicer shall be entitled to the full amount of the aggregate
Servicing Fees hereunder as servicing compensation, together with the other
Servicing Compensation. Within thirty days after any such public announcement,
the Trustee shall negotiate and effect the sale, transfer and assignment of the
servicing rights and responsibilities hereunder to the qualified party
submitting the highest qualifying bid. The Trustee shall deduct from any sum
received by the Trustee from the successor to the Servicer in respect of such
sale, transfer and assignment all costs and expenses of any public announcement
and of any sale, transfer and assignment of the servicing rights and
responsibilities hereunder and the amount of any unreimbursed Servicing Advances
and Periodic Advances owed to the Back-up Servicer. After such deductions, the
remainder of such sum shall be paid by the Trustee to the Servicer at the time
of such sale, transfer and assignment to the Servicer's successor.
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(d) The Trustee and such successor servicer (including, without
limitation, the Back-up Servicer) shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. The Servicer
agrees to cooperate with the Trustee and any successor servicer in effecting the
termination of the Servicer's servicing responsibilities and rights hereunder
and shall promptly provide the Trustee or such successor servicer, as
applicable, at the Servicer's cost and expense, all documents and records
reasonably requested by it to enable it to assume the Servicer's functions
hereunder and shall promptly also transfer to the Trustee or such successor
servicer, as applicable, all amounts that then have been or should have been
deposited in the Collection Account by the Servicer or that are thereafter
received with respect to the Mortgage Loans. Any collections received by the
Servicer after such removal or resignation shall be endorsed by it to the
Trustee and remitted directly to the Trustee or, at the direction of the
Trustee, to the successor servicer. Neither the Trustee nor any successor
servicer shall be held liable by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof caused by (i) the
failure of the Servicer to deliver, or any delay in delivering, cash, documents
or records to it, or (ii) restrictions imposed by any regulatory authority
having jurisdiction over the Servicer hereunder. Notwithstanding anything to the
contrary herein, no appointment of a successor to the Servicer under this
Agreement shall be effective until written notice of such proposed appointment
shall have been provided by the Trustee to each Certificateholder. The Back-up
Servicer shall not resign as servicer until a successor servicer has been
appointed or until a successor servicer has been appointed in accordance with
paragraph (c) above. The Controlling Party shall have the right to remove the
Back-up Servicer (or any successor Servicer) as successor Servicer under this
Section 7.02 without cause, and the Trustee shall appoint such other successor
Servicer as directed by the Controlling Party.
(e) Pending appointment of a successor to the Servicer hereunder, the
Back-up Servicer shall 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 the Trustee and such successor shall agree; provided, however, that
unless otherwise agreed by the Controlling Party, no such compensation shall be
in excess of that permitted the Servicer pursuant to Section 5.08, together with
other Servicing Compensation. The Servicer, the Back-up Servicer, the Trustee
and such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession.
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Section 7.03 Waiver of Defaults. The Controlling Party may, on behalf
of all Certificateholders, waive any events permitting removal of the Servicer
as servicer pursuant to this Article VII; provided, however, that the
Controlling Party may not waive a default in making a required distribution on a
Certificate without the consent of the holder of such Certificate. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereto except to the extent
expressly so waived. Notice of any such waiver shall be given by the Trustee to
the Rating Agencies.
ARTICLE VIII
TERMINATION
Section 8.01 Termination. (a) Subject to Section 8.02, this Agreement
shall terminate upon notice to the Trustee of the later of the distribution to
Certificateholders of the final payment or collection with respect to the last
Mortgage Loan (or Periodic Advances of same by the Servicer), or the disposition
of all funds with respect to the last Mortgage Loan and the remittance of all
funds due hereunder and the payment of all Trustee Fees and other amounts due
and payable to the Trustee; provided, however, that in no event shall the Trust
established by this Agreement terminate later than: (i) twenty-one years after
the death of the last surviving lineal descendant of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, late
Ambassador of the United States to the Court of St. ▇▇▇▇▇, alive as of the date
hereof or (ii) the Distribution Date in November 2033.
(b) In addition, subject to Section 8.02, Servicer may, at its option
and at its sole cost and expense, elect to cause this Agreement to be terminated
and all the Offered Certificates to be redeemed in whole, but not in part, on
the first Distribution Date after any Distribution Date on which the Aggregate
Principal Balance is equal to or less than 10% of the Original Aggregate
Principal Balance (the "Clean-Up Call Date") by purchasing, on such succeeding
Distribution Date, all of the outstanding Mortgage Loans and REO Properties at a
price equal to the sum of (i) 100% of the aggregate Principal Balance of each
outstanding Mortgage Loan and each REO Property, (ii) the greater of (1) the
aggregate amount of accrued and unpaid interest on the Mortgage Loans through
the related Due Period and (2) 30 days' accrued interest thereon computed at a
rate equal to the related Mortgage Interest Rate, in each case net of the
Servicing Fee, (iii) any Back-up Servicer Fees or other amounts due to the
Back-up Servicer hereunder, and (iv) any Trustee Fees or other amounts due to
the Trustee hereunder (the "Termination Price"); provided, that in no event will
the Termination Price be less than the sum of the aggregate Certificate
Principal Balance of the Offered Certificates, plus all accrued and unpaid
interest on the Offered Certificates plus all amounts due the Trustee and the
Back-up Servicer hereunder plus all unreimbursed Periodic Advances and Servicing
Advances. Any such purchase shall be accomplished by deposit of the Termination
Price into the Distribution Account.
(c) If on any Distribution Date, the Servicer determines that there are
no outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than funds in the Distribution Account, the Servicer shall send a final
distribution notice promptly to each such Certificateholder in accordance with
paragraph (d) below.
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(d) Notice of any termination, specifying the Distribution Date upon
which the Trust Fund will terminate and the Certificateholders shall surrender
their Certificates to the Trustee for payment of the final distribution and
cancellation, shall be given promptly by the Servicer by letter to
Certificateholders mailed during the month of such final distribution before the
Servicer Remittance Date in such month, specifying (i) the Distribution Date
upon which final payment of the Certificates will be made upon presentation and
surrender of Certificates at the office of the Trustee therein designated, (ii)
the amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Trustee
therein specified. The Servicer shall give such notice to the Trustee therein
specified. The Servicer shall give such notice to the Trustee at the time such
notice is given to Certificateholders.
(e) In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the time specified
in the above-mentioned written notice, the Servicer 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 of the 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 subject
hereto. If within nine months after the second notice all the Certificates shall
not have been surrendered for cancellation, the Class R Certificateholders shall
be entitled to all unclaimed funds and other assets which remain subject hereto
and the Trustee upon transfer of such funds shall be discharged of any
responsibility for such funds and the Certificateholders shall look only to the
Class R Certificateholders for payment and not to the Trustee. Such funds shall
remain uninvested.
Section 8.02 Additional Termination Requirements. (a) In the event that
the Servicer exercises its purchase option as provided in Section 8.01, the
Trust Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee has been furnished with an Opinion of Counsel
to the effect that the failure of the Trust Fund to comply with the requirements
of this Section 8.02 will not (i) result in the imposition of taxes on
"prohibited transactions" of any REMIC created hereunder as defined in Section
860F of the Code or (ii) cause any REMIC created hereunder to fail to qualify as
a REMIC at any time that any Offered Certificates or Class X Certificates are
outstanding:
(i) Within 90 days prior to the final Distribution Date the
Servicer shall adopt and the Trustee shall sign, a plan of complete
liquidation of each REMIC created hereunder meeting the requirements of
a "Qualified Liquidation" under Section 860F of the Code and any
regulations thereunder;
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(ii) At or after the time of adoption of such a plan of
complete liquidation and at or prior to the final Distribution Date,
the Trustee shall sell all of the assets of the REMIC I to the Servicer
for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited (A) to the Class A Certificateholders, the
Class A Certificate Principal Balance, plus one month's interest
thereon at the Class A Pass-Through Rate, (B) to the Class M-1
Certificateholders, the Class M-1 Certificate Principal Balance, plus
one month's interest thereon at the Class M-1 Pass-Through Rate, (C) to
the Class M-2 Certificateholders, the Class M-2 Certificate Principal
Balance, plus one month's interest thereon at the Class M-2
Pass-Through Rate, (D) to the Class B Certificateholders, the Class B
Certificate Principal Balance, plus one month's interest thereon at the
Class B Pass-Through Rate, (E) to the Class X Certificateholders, all
cash on hand after such payment to the Class A, Class A-IO, Class M-1,
Class M-2 and Class B Certificateholders (but in no event in excess of
the Class X Distribution Amount), and (F) to the Class R Certificates
in respect of the Class R-III Interest, any remaining amounts (other
than cash retained to meet claims) and the Trust Fund shall terminate
at such time; provided, however, that any such payment will be made
after all outstanding fees, costs and expenses of the Trustee have been
paid in full.
(b) By their acceptance of the Certificates, the Holders thereof hereby
agree to appoint the Servicer as their attorney in fact to: (i) adopt such a
plan of complete liquidation (and the Certificateholders hereby appoint the
Trustee as their attorney in fact to sign such plan) as appropriate and (ii) to
take such other action in connection therewith as may be reasonably required to
carry out such plan of complete liquidation all in accordance with the terms
hereof.
Section 8.03 Accounting Upon Termination of Servicer. Upon termination
of the Servicer, the Servicer shall, at its expense:
(a) deliver to its successor or, if none shall yet have been appointed,
to the Trustee, the funds in any Account;
(b) deliver to its successor or, if none shall yet have been appointed,
to the Collateral Agent on behalf of the Trustee all Mortgage Files and related
documents and statements held by it hereunder and a Mortgage Loan portfolio
computer tape;
(c) deliver to its successor or, if none shall yet have been appointed,
to the Trustee and, upon request, to the Certificateholders a full accounting of
all funds, including a statement showing the Monthly Payments collected by it
and a statement of monies held in trust by it for the payments or charges with
respect to the Mortgage Loans; and
(d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Mortgage Loans to its successor and to more fully and
definitively vest in such successor all rights, powers, duties,
responsibilities, obligations and liabilities of the "Servicer" under this
Agreement.
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ARTICLE VX
THE TRUSTEE
Section 9.01 Duties of Trustee. (a) The Trustee, prior to the
occurrence of an Event of Default of which a Responsible Officer of the Trustee
shall have actual knowledge and after the curing of all Events of Default which
may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge has occurred and
has not been cured or waived, 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 its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform on their face to the requirements of this Agreement; provided, however,
that the Trustee shall not be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Servicer, the Back-up Servicer (if not the Trustee)
or the Unaffiliated Seller hereunder. If any such instrument is found not to
conform on its face to the requirements of this Agreement, the Trustee will, at
the expense of the Servicer notify the Depositor of such instrument in the event
the Trustee, after so requesting, does not receive a satisfactorily corrected
instrument.
(c) 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; provided, however, that:
(i) prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge, and
after the curing of all such Events of Default which may have occurred,
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 such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and,
in the absence of bad faith on the part of the Trustee, 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;
(ii) the Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or other
officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with this Agreement or at the direction of the
Controlling Party or with the consent of the Controlling Party,
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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(iv) the Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default
(except an Event of Default with respect to the nonpayment of any
amount described in Section 7.01(a)), unless a Responsible Officer of
the Trustee shall have received written notice thereof. In the absence
of receipt of such notice, the Trustee may conclusively assume that
there is no default or Event of Default;
(v) the Trustee shall not be required to expend or risk its
own funds or otherwise incur financial liability for the performance of
any of its duties hereunder or the exercise of any of its rights or
powers if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it and none of the provisions contained in
this Agreement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of
the Servicer under this Agreement except during such time, if any, as
the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement; and
(vi) subject to the other provisions of this Agreement (and
except in its capacity as successor Servicer) and without limiting the
generality of this Section, the Trustee shall have no duty (A) to see
to any recording, filing, or depositing of this Agreement or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance
of any such recording or filing or depositing or to any rerecording,
refiling or redepositing of any thereof, (B) to see to any insurance,
(C) to see to the payment or discharge of any tax, assessment, or other
governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust, the
Trust Fund, the Certificateholders or the Mortgage Loans, (D) to
confirm or verify the contents of any reports or certificates of the
Servicer delivered to the Trustee pursuant to this Agreement believed
by the Trustee to be genuine and to have been signed or presented by
the proper party or parties or (E) execute the certification required
by the Sarbanes Oxley Act of 2002.
Section 9.02 Certain Matters Affecting the Trustee. (a) Except as
otherwise provided in Section 9.01:
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
Opinion of Counsel, advice of counsel, 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;
(ii) the Trustee may consult with counsel and any Opinion of
Counsel or written advice 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 or advice of counsel;
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(iii) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to institute,
conduct or defend by litigation hereunder or in relation hereto at the
request, order or direction of the Controlling Party or any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders or Controlling Party, as applicable,
shall have offered to the Trustee reasonable security or indemnity
reasonably satisfactory to it against the costs, expenses and
liabilities which may be incurred therein by the Trustee or thereby;
nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge (which
has not been cured), to exercise such of the rights and powers vested
in it by this Agreement, and to use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
(iv) the Trustee shall not be personally 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;
(v) 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 to do so by the Majority Certificateholders; provided, however,
that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
satisfactory to the Trustee against such cost, expense or liability as
a condition to taking any such action. The reasonable expense of every
such examination shall be paid by the Servicer or, if paid by the
Trustee, shall be repaid by the Servicer upon demand from the
Servicer's own funds;
(vi) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act;
(vii) the Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust created hereby or the
powers granted hereunder; and
(viii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, attorneys or custodians and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed by the Trustee with due care.
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(b) Following the Startup Day, the Trustee shall not knowingly accept
any contribution of assets to the Trust Fund, unless the Trustee shall have
received an Opinion of Counsel (at the expense of the Servicer) to the effect
that the inclusion of such assets in the Trust Fund will not cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject any REMIC created hereunder to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances. The Trustee agrees to indemnify the Trust Fund and the
Servicer for any taxes and costs, including any attorney's fees, imposed or
incurred by the Trust Fund or the Servicer as a result of the breach of the
Trustee's covenants set forth within this subsection (b).
Section 9.03 Trustee Not Liable for Certificates or Mortgage Loans. The
recitals, representations, warranties and covenants contained herein or in the
Certificates (other than the certificate of authentication on the Certificates)
shall be taken as the statements, representations, warranties and covenants of
the Unaffiliated Seller or the Servicer as the case may be, 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 any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Depositor of any of the Certificates or the proceeds
of the Certificates, or for the use or application of any funds paid to the
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Servicer. The Trustee shall not be responsible for the
legality or validity of the Agreement or the validity, priority, perfection or
sufficiency of the security for the Certificates issued or intended to be issued
hereunder. The Trustee shall have no responsibility for filing 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 or to record this Agreement.
Section 9.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgor of Certificates
with the same rights it would have if it were not Trustee, and may otherwise
deal with the parties hereto.
Section 9.05 Trustee's Fees and Expenses; Indemnity. (a) The Trustee
acknowledges that in consideration of the services rendered by the Trustee in
the execution of the trust hereby created and in the exercise and performance of
any of the powers and duties hereunder it is entitled to receive the Trustee's
Fee in accordance with the provision of Section 6.05(a) (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
any express trust). Additionally, the Trustee hereby covenants, for the benefit
of the Depositor, that the Trustee has arranged separately with the Servicer for
the payment or reimbursement to the Trustee of all of the Trustee's expenses in
connection with this Agreement, including, without limitation, all reasonable
out of pocket expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ). Notwithstanding any other
provision of this Agreement to the contrary, the Servicer covenants and agrees
to indemnify the Trustee and its officers, directors, employees and agents from,
and hold it harmless against, any and all losses, liabilities, damages, claims
or expenses incurred in connection with any legal action relating to this
Agreement, the Certificates or incurred in connection with the administration of
the Trust, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence of the Trustee in the performance
of its duties hereunder or by reason of the Trustee's reckless disregard of
obligations and duties hereunder. For the avoidance of doubt, the parties hereto
acknowledge that it is the intent of the parties that the Depositor shall not
pay any of the Trustee's fees and expenses in connection with this transaction.
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(b) The Trust Fund, the Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Servicer and held harmless
against any loss, liability, claim, damage or expense arising out of, or imposed
upon the Trust or the Trustee through the Servicer's acts or omissions in
violation of this Agreement, other than any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence of the Trustee in the
performance of its duties hereunder or by reason of the Trustee's reckless
disregard of obligations and duties hereunder. The Servicer shall immediately
notify the Trustee, the Back-up Servicer, the Custodian, the Depositor and all
Certificateholders if a claim is made by a third party with respect to this
Agreement, and the Servicer shall assume the defense of any such claim and
advance all expenses in connection therewith, including reasonable counsel fees,
and promptly advance funds to pay, discharge and satisfy any judgment or decree
which may be entered against the Servicer, the Back-up Servicer, the Custodian,
the Depositor, the Trustee and/or any Certificateholder in respect of such
claim. The obligations of the Servicer under this Section 9.05 arising prior to
any resignation or termination of the Servicer hereunder shall survive the
resignation or removal of the Trustee, termination of the Servicer and payment
of the Certificates, and shall extend to any co-trustee or separate trustee
appointed pursuant to this Article IX. Anything in this Agreement to the
contrary notwithstanding, in no event shall the Trustee be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.
Section 9.06 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a banking entity (a) organized and doing
business under the laws of any state or the United States of America subject to
supervision or examination by federal or state authority, (b) authorized under
such laws to exercise corporate trust powers, including taking title to the
Trust Fund assets on behalf of the Certificateholders, (c) be a wholly owned
subsidiary of a bank holding company having a combined capital and surplus of at
least $50,000,000, (d) whose long-term deposits, if any, shall be rated at least
BBB- by S&P and Baa3 by ▇▇▇▇▇'▇ (except as provided herein) or such lower
long-term deposit rating as may be approved in writing by the Rating Agencies,
and (e) reasonably acceptable to the Servicer as evidenced in writing. If such
banking entity 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 determining an entity's combined capital and surplus for
clause (c) of this Section, the amount set forth in its most recent report of
condition so published shall be deemed to be its combined capital and surplus.
In case at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect specified in Section 9.07.
Section 9.07 Resignation and Removal of the Trustee. (a) The Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Servicer, the Back-up Servicer, the Rating
Agencies and the Depositor. Upon receiving such notice of resignation, the
Servicer may promptly appoint a successor trustee by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Depositor, the Back-up Servicer, the Certificateholders and the Unaffiliated
Seller by the Servicer. Unless a successor trustee shall have been so appointed
and shall have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
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(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.06 and shall fail to resign after written
request therefor by the Servicer or if at any time the Trustee shall become
incapable of acting, or shall be adjudged 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 the Trustee shall
breach any of its obligations hereunder in any material respect, then the
Servicer or the Controlling Party may remove the Trustee and the Servicer shall,
at the direction of the Controlling Party, within thirty (30) days after such
removal, appoint, a successor trustee by written instrument, in duplicate, which
instrument shall be delivered to the Trustee so removed and to the successor
trustee. A copy of such instrument shall be delivered to the Depositor, the
Back-up Servicer, the Certificateholders, the Rating Agencies and the
Unaffiliated Seller by the Servicer.
(c) If the Trustee fails to perform in accordance with the terms of
this Agreement, the Controlling Party may remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor Trustee so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 9.08.
Section 9.08 Successor Trustee. Any successor trustee appointed as
provided in Section 9.07 shall execute, acknowledge and deliver to the
Depositor, the Unaffiliated Seller, the Servicer, the Back-up Servicer and to
its predecessor trustee 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 predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder, and 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 unless at the time of such acceptance
such successor trustee shall be eligible under the provisions of Section 9.06.
Upon acceptance of appointment by a successor trustee as provided in this
Section, the Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register and to the Rating Agencies. If the Servicer 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 Servicer.
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Section 9.09 Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated or
any corporation or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation or national banking association succeeding to the business of the
trustee, shall be the successor of the Trustee hereunder, provided such
corporation or national banking association shall be eligible under the
provisions of Section 9.06, 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.
Section 9.10 Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions hereof, 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 the same 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
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
9.10 and the consent of the Servicer, such powers, duties, obligations, rights
and trusts as the Servicer and the Trustee may consider necessary or desirable.
If the Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request so to do, or in 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 9.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(b) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, 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 Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
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 IX. 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 to, the Trustee. Every
such instrument shall be filed with the Trustee.
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(d) 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. The Trustee shall not be responsible
for any action or inaction of any such separate trustee or co-trustee, provided
that the Trustee appointed such separate trustee or co-trustee with due care. 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 9.11 Tax Returns. The Tax Matters Person will prepare, sign and
file all Tax Returns required to be filed by the Trust Fund in accordance with
Section 11.05(a)(i). The Servicer, upon request, will promptly furnish the
Trustee with all such information as may be reasonably required by the Trustee
for the purpose of the Trustee responding to reasonable requests for information
made by Certificateholders in connection with tax matters.
Section 9.12 Retirement of Certificates. The Trustee shall, upon the
retirement of the Certificates pursuant hereto or otherwise, furnish to the
Depositor, the Back-up Servicer and the Servicer a notice of such retirement,
and, upon retirement of the Certificates.
Section 9.13 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, any such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.
Section 9.14 Suits for Enforcement. In case an Event of Default or
other default by the Servicer hereunder shall occur and be continuing, the
Trustee, in its discretion, but subject to Section 9.01 and Section 7.01, as
applicable, may proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Trustee or the
Certificateholders.
ARTICLE X
THE COLLATERAL AGENT
Section 10.01 Duties of the Collateral Agent. (a) The Collateral Agent,
prior to the occurrence of an Event of Default of which a Responsible Officer
shall have actual knowledge and after the curing of all Events of Default which
may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Default of which a
Responsible Officer shall have actual knowledge has occurred and has not been
cured or waived, the Collateral Agent shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
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(b) The Collateral Agent, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Collateral Agent which are specifically required to
be furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform on their face to the requirements of this
Agreement; provided, however, that the Collateral Agent shall not be responsible
for the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order or other instrument furnished by any Person hereunder.
If any such instrument is found not to conform on its face to the requirements
of this Agreement, the Collateral Agent shall note it as such on the applicable
certification delivered pursuant to Section 2.06.
(c) No provision of this Agreement shall be construed to relieve the
Collateral Agent from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) prior to the occurrence of an Event of Default of which a
Responsible Officer shall have actual knowledge, and after the curing
of all such Events of Default which may have occurred, the duties and
obligations of the Collateral Agent shall be determined solely by the
express provisions of this Agreement, the Collateral Agent shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Collateral
Agent and, in the absence of bad faith on the part of the Collateral
Agent, the Collateral Agent 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 Collateral Agent and
conforming to the requirements of this Agreement;
(ii) the Collateral Agent shall not be personally liable for
an error of judgment made in good faith by a Responsible Officer or
other officers of the Collateral Agent, unless it shall be proved that
the Collateral Agent was negligent in ascertaining the pertinent facts;
(iii) the Collateral Agent shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with this Agreement or at the direction of the
Controlling Party or the Trustee or with the consent of the Controlling
Party or the Trustee;
(iv) the Collateral Agent shall not be required to expend or
risk its own funds or otherwise incur financial liability for the
performance of any of its duties hereunder or the exercise of any of
its rights or powers if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it and none of the provisions
contained in this Agreement shall in any event require the Collateral
Agent to perform, or be responsible for the manner of performance of,
any of the obligations of the Servicer or the Trustee under this
Agreement; and
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(v) subject to the other provisions of this Agreement and
without limiting the generality of this Section 10.01, the Collateral
Agent shall have no duty (A) to see to any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing of any
thereof, (B) to see to any insurance, (C) to see to the payment or
discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or
levied against, any part of the Trust, the Trust Fund, the
Certificateholders or the Mortgage Loans, (D) to confirm or verify the
contents of any reports or certificates of any Person delivered to the
Collateral Agent pursuant to this Agreement believed by the Collateral
Agent to be genuine and to have been signed or presented by the proper
party or parties.
Section 10.02 Certain Matters Affecting the Collateral Agent. Except as
otherwise provided in Section 10.01 hereof:
(a) the Collateral Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate, Opinion of
Counsel, 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;
(b) the Collateral Agent may consult with counsel and any Opinion of
Counsel or written advice of such 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 or advice of such counsel;
(c) the Collateral Agent shall be under no obligation to exercise any
of the powers vested in it by this Agreement or to institute, conduct or defend
by litigation hereunder or in relation hereto at the request, order or direction
of the Servicer or any of the Certificateholders, pursuant to the provisions of
this Agreement, unless such Certificateholders or the Servicer, as applicable,
shall have offered to the Trustee reasonable security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein by the Collateral Agent or thereby; nothing contained herein
shall, however, relieve the Collateral Agent of the obligation, upon the
occurrence of an Event of Default of which a Responsible Officer shall have
actual knowledge (which has not been cured), to exercise such of the rights and
powers vested in it by this Agreement, and to use the same degree of care and
skill in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
(d) the Collateral Agent shall not be personally 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;
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(e) the Collateral Agent 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 to do so by the Controlling
Party; provided, however, that if the payment within a reasonable time to the
Collateral Agent of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Collateral
Agent, not reasonably assured to the Collateral Agent by the security afforded
to it by the terms of this Agreement, the Collateral Agent may require
reasonable indemnity reasonably satisfactory to the Collateral Agent against
such cost, expense or liability as a condition to taking any such action. The
reasonable expense of every such examination shall be paid by the Servicer or,
if paid by the Collateral Agent, shall be repaid by the Servicer upon demand
from the Servicer's own funds;
(f) the right of the Collateral Agent to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Collateral Agent shall not be answerable for anything other than its negligence
or willful misconduct in the performance of such act; and
(g) the Collateral Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys.
Section 10.03 Collateral Agent Not Liable for Certificates or Mortgage
Loans. The recitals contained herein shall be taken as the statements of the
Trust and the Servicer, as the case may be, and the Collateral Agent assumes no
responsibility for their correctness. The Collateral Agent makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document. The Collateral Agent shall not be accountable
for the use or application of any funds paid to the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Servicer. The Collateral Agent shall not be responsible for the legality or
validity of the Agreement or the validity, priority, perfection or sufficiency
of the security for the Certificates issued or intended to be issued under this
Agreement.
Section 10.04 Collateral Agent May Own Certificates. The Collateral
Agent in its individual or any other capacity may become the owner or pledgor of
Certificates with the same rights it would have if it were not Collateral Agent,
and may otherwise deal with the parties hereto.
Section 10.05 Collateral Agent's Fees and Expenses; Indemnity. (a) The
Collateral Agent acknowledges that in consideration of the performance of its
duties hereunder it is entitled to receive its fees and expenses from the
Servicer, as separately agreed between the Servicer and the Collateral Agent.
The Depositor and the Trustee shall not pay any of the Collateral Agent fees and
expenses in connection with this transaction. The Collateral Agent shall not be
entitled to compensation for any expense, disbursement or advance as may arise
from its negligence or bad faith.
(b) The Collateral Agent and any director, officer, employee or agent
of the Collateral Agent shall be indemnified by first, the Trust and, second,
the Servicer and held harmless against any loss, liability, claim, damage or
reasonable expense incurred in connection with this Agreement other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence of the Collateral Agent in the performance of its duties hereunder
or by reason of the Collateral Agent's reckless disregard of obligations and
duties hereunder. The obligations of the Servicer under this Section 10.05
arising prior to any resignation or termination of the Servicer hereunder shall
survive termination of the Servicer and payment of the Certificates.
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Section 10.06 Eligibility Requirements for Collateral Agent. The
Collateral Agent hereunder shall at all times be a banking entity (a) organized
and doing business under the laws of any state or the United States of America
subject to supervision or examination by federal or state authority, (b)
authorized under such laws to exercise corporate trust powers, including taking
title to the Trust Fund on behalf of the Trustee, for the benefit of the
Certificateholders, (c) be a wholly owned subsidiary of a bank holding company
having a combined capital and surplus of at least $50,000,000, (d) whose
long-term deposits, if any, shall be rated at least BBB- by S&P and Baa3 by
Moody's (except as provided herein) or such lower long-term deposit rating as
may be approved in writing by the Rating Agencies, and (e) reasonably acceptable
to the Servicer as evidenced in writing. If such banking entity 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
determining an entity's combined capital and surplus for clause (c) of this
Section 10.06, the amount set forth in its most recent report of condition so
published shall be deemed to be its combined capital and surplus. In case at any
time the Collateral Agent shall cease to be eligible in accordance with the
provisions of this Section 10.06, the Collateral Agent shall resign immediately
in the manner and with the effect specified in Section 10.07.
Section 10.07 Resignation and Removal of the Collateral Agent. (a) The
Collateral Agent may at any time resign and be discharged from the trusts hereby
created by giving thirty (30) days' written notice thereof to the Trustee and
the Servicer.
(b) If at any time the Collateral Agent shall cease to be eligible in
accordance with the provisions of Section 10.06 and shall fail to resign after
written request therefor by the Trustee or the Servicer, or if at any time the
Collateral Agent shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or a receiver of the Collateral Agent or of its property shall be
appointed, or any public officer shall take charge or control of the Collateral
Agent or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Trustee or the Servicer or the Controlling
Party may remove the Collateral Agent.
(c) If the Collateral Agent fails to perform in accordance with the
terms of this Agreement, the Trustee, the Servicer or the Controlling Party may
remove the Collateral Agent.
(d) Upon removal or receipt of notice of resignation of the Collateral
Agent, the Trustee shall either (i) take possession of the Trustee's Mortgage
Files and assume the duties of the Collateral Agent hereunder or (ii) appoint a
successor Collateral Agent pursuant to Section 9.08. If the Trustee shall assume
the duties of the Collateral Agent hereunder, it shall notify the Trust, the
Depositor, the Servicer and Rating Agencies in writing.
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Section 10.08 Successor Collateral Agent. Upon the resignation or
removal of the Collateral Agent, the Trustee may appoint a successor Collateral
Agent, with the written approval of the Servicer; provided, however, that the
successor Collateral Agent so appointed shall satisfy the eligibility criteria
set forth in Section 10.06 hereof, shall in no event be the Unaffiliated Seller,
the Depositor or the Servicer or any Person known to a Responsible Officer of
the Trustee to be an Affiliate of the Unaffiliated Seller, the Depositor or the
Servicer and shall be approved by the Servicer. The Trustee or such custodian,
as the case may be, shall assume the duties of the Collateral Agent hereunder.
Any successor Collateral Agent appointed as provided in this Section 10.08 shall
execute, acknowledge and deliver to the Trust, the Depositor, the Servicer, the
Back-up Servicer, the Trustee and to its predecessor Collateral Agent an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor Collateral Agent shall become effective and such
successor Collateral Agent, 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 Collateral
Agent herein. The predecessor Collateral Agent shall deliver to the successor
Collateral Agent all of the Trustee's Mortgage Files and related documents and
statements held by it hereunder, and the Servicer and the predecessor Collateral
Agent 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 Collateral Agent all such rights, powers, duties and obligations.
The cost of any such transfer to the successor Collateral Agent shall be for the
account of the Collateral Agent in the event of the resignation of the
Collateral Agent, and shall be for the account of the Servicer in the event of
the removal of the Collateral Agent. No successor Collateral Agent shall accept
appointment as provided in this Section 10.08 unless at the time of such
acceptance such successor Collateral Agent shall be eligible under the
provisions of Section 10.06. Upon acceptance of appointment by a successor
Collateral Agent as provided in this Section 10.08, the Servicer shall mail
notice of the succession of such Collateral Agent hereunder to all
Certificateholders at their addresses as shown in the Certificate Register and
to the Rating Agencies. If the Servicer fails to mail such notice within ten
(10) days after acceptance of appointment by the successor Collateral Agent, the
successor Collateral Agent shall cause such notice to be mailed at the expense
of the Servicer.
Section 10.09 Merger or Consolidation of Collateral Agent. Any Person
into which the Collateral Agent may be merged or converted or with which it may
be consolidated or any corporation or national banking association resulting
from any merger, conversion or consolidation to which the Collateral Agent shall
be a party, or any corporation or national banking association succeeding to the
business of the Collateral Agent, shall be the successor of the Collateral Agent
hereunder; provided, that, such corporation or national banking association
shall be eligible under the provisions of Section 10.06, 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.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Limitation on Liability of the Depositor, the Back-up
Servicer and the Servicer. None of the Depositor, the Servicer, the Back-up
Servicer or any of the directors, officers, employees or agents of the
Depositor, the Servicer or the Back-up Servicer shall be under any liability to
the Trust or 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 Back-up Servicer or the Servicer or any such Person against any
breach of warranties, representations, covenants or agreements made herein, or
against any specific liability imposed on each such party pursuant to this
Agreement or against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations or duties hereunder. The
Depositor, the Back-up Servicer or the Servicer and any director, officer,
employee or agent of the Depositor, the Back-up Servicer or the Servicer may
rely in good faith on any document of any kind which, prima facie, is properly
executed and submitted by any appropriate Person respecting any matters arising
hereunder.
Section 11.02 Acts of Certificateholders. (a) Except as otherwise
specifically provided herein, whenever Certificateholder action, consent or
approval is required under this Agreement, such action, consent or approval
shall be deemed to have been taken or given on behalf of, and shall be binding
upon, all Certificateholders if the Controlling Party agrees to take such action
or give such consent or approval.
(b) The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(c) No Certificateholder shall have any right to vote (except as
expressly provided for 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 person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
(d) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel (which
shall be an expense of the Trust) stating that the execution of such amendment
is authorized and permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement.
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Section 11.03 Amendment. (a) This Agreement may be amended from time to
time by the Servicer, the Depositor and the Trustee by written agreement,
without notice to or consent of the Certificateholders to cure any ambiguity, to
correct or supplement any provisions herein, to comply with any changes in the
Code, or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement or effect a significant change in the permitted activities of
the Trust; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, at the expense of the party requesting the change, delivered
to the Trustee, adversely affect in any material respect the interests of any
Certificateholder; provided, further, that no such amendment shall (x) reduce in
any manner the amount of, or delay the timing of, payments received on Mortgage
Loans which are required to be distributed on any Certificate without the
consent of the Holder of such Certificate, or change the rights or obligations
of any other party hereto without the consent of such party, or (y) amend or
alter Section 2.01(b) hereof. The Trustee shall give prompt written notice to
the Rating Agencies of any amendment made pursuant to this Section 11.03 or
pursuant to Section 6.09 of the Unaffiliated Seller's Agreement.
(b) This Agreement may be amended from time to time by the Servicer,
the Depositor and the Trustee with the consent of the Controlling Party and the
Holders of the majority of the Percentage Interest in the Class R Certificates
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; provided, however, that no such amendment
shall be made unless the Trustee receives an Opinion of Counsel, at the expense
of the party requesting the change, that such change (i) will not adversely
affect the status of any REMIC created hereunder as a REMIC, (ii) will not cause
a tax to be imposed on any REMIC created hereunder and (iii) such change will
not effect a significant change in the permitted activities of the Trust;
provided, further, that no such amendment shall reduce in any manner the amount
of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Class of Certificates without the consent of
the Holders of such Class of Certificates or reduce the percentage for the
Holders of which are required to consent to any such amendment without the
consent of the Holders of 100% of such Class of Certificates affected thereby.
(c) It shall not be necessary for the consent of Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof.
Section 11.04 Recordation of Agreement. To the extent permitted by
applicable law, this 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 of 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 the direction of the Controlling Party.
Section 11.05 Duration of Agreement. This Agreement shall continue in
existence and effect until terminated as herein provided.
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Section 11.06 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered to (i) in the case of the Servicer, American Business Credit, Inc.,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, (ii) in the case of the Unaffiliated
Seller, ABFS 2002-3, Inc., Balapointe Office Centre, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, (iii) in the
case of the Trustee, the Collateral Agent and the Back-up Servicer, JPMorgan
Chase Bank, Institutional Trust Services, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: Structured Finance Services, ABFS 2002-3, (iv) in the
case of the Certificateholders, as set forth in the Certificate Register, (v) in
the case of ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ Attention: Home Equity Monitoring Group, (vi) in the case of Standard
& Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Attention: Residential
Mortgage Surveillance Group, (vii) in the case of the Depositor or the
Underwriter, Credit Suisse First Boston Mortgage Securities Corp. or Credit
Suisse First Boston Corporation, Eleven Madison Avenue, 4th Floor, New York, New
York 10010, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇. Any such notices shall be deemed to be
effective with respect to any party hereto upon the receipt of such notice by
such party, except that notices to the Certificateholders shall be effective
upon mailing or personal delivery.
Section 11.07 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, 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 covenants, agreements, provisions or terms of this
Agreement.
Section 11.08 No Partnership. Nothing herein contained shall be deemed
or construed to create a co-partnership or joint venture between the parties
hereto and the services of the Servicer shall be rendered as an independent
contractor and not as agent for the Certificateholders.
Section 11.09 Counterparts. 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.
Section 11.10 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Servicer, the Back-up Servicer, the
Depositor, the Trustee, the Collateral Agent and the Certificateholders and
their respective successors and permitted assigns.
Section 11.11 Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
Section 11.12 [RESERVED]
Section 11.13 Third Party Beneficiary. The parties agree that the
Unaffiliated Seller is intended and shall have all rights of a third-party
beneficiary of this Agreement.
Section 11.14 [RESERVED]
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Section 11.15 Appointment of Tax Matters Person; Certain Taxes. (a) The
Holders of the Class R Certificates as the Tax Matters Person hereby appoint the
Servicer to act, as their agent in such capacity, for each REMIC created
hereunder for all purposes of the Code. The Tax Matters Person will perform, or
cause to be performed, such duties and take, or cause to be taken, such actions
as are required to be performed or taken by the Tax Matters Person under the
code. The Holders of the Class R Certificates may hereafter appoint a different
entity as their agent, or may appoint one of the Class R Certificateholders to
be the Tax Matters Person. The Tax Matters Person Shall:
(i) prepare, sign and file, or cause to be prepared and filed,
in a timely manner, a U.S. Real Estate Mortgage Investment Conduit
Income Tax Return (Form 1066) and any other Tax Return required to be
filed by each REMIC created hereunder, using a calendar year as the
taxable year for each REMIC created hereunder;
(ii) make, or cause to be made, an election, on behalf of each
REMIC created hereunder, to be treated as a REMIC on the federal tax
return of each REMIC created hereunder for its first taxable year;
(iii) prepare and forward, or cause to be prepared and
forwarded, to the Trustee, the Certificateholders and to the Internal
Revenue Service and any other relevant governmental taxing authority
all information returns or reports as and when required to be provided
to them in accordance with the REMIC Provisions;
(iv) to the extent that the affairs of the Trust Fund are
within its control, conduct such affairs of the Trust Fund at all times
that any Certificates are outstanding so as to maintain the status of
each REMIC created hereunder as a REMIC under the REMIC Provisions and
any other applicable federal, state and local laws, including, without
limitation, information reports relating to "original issue discount,"
as defined in the Code, based upon the Prepayment Assumption and
calculated by using the issue price of the Certificates;
(v) 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;
(vi) pay the amount of any and all federal, state, and local
taxes, including, without limitation, upon the Trustee or the
Certificateholders in connection with the Trust, the Trust Fund or the
Mortgage Loans, prohibited transaction taxes as defined in Section 860F
of the Code, other than any amount due as a result of a transfer or
attempted or purported transfer in violation of Section 4.02, imposed
on any REMIC created hereunder when and as the same shall be due and
payable (but such obligation shall not prevent the Unaffiliated Seller
or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Unaffiliated Seller
from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings);
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(vii) ensure that any such returns or reports filed on behalf
of any REMIC created hereunder by the Trustee are properly executed by
the appropriate person and submitted in a timely manner;
(viii) represent any 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 any REMIC created hereunder, enter
into settlement agreements with any governmental taxing agency, extend
any statute of limitations relating to any item of any REMIC created
hereunder and otherwise act on behalf of each REMIC created hereunder
in relation to any tax matter involving any REMIC created hereunder;
(ix) as provided in Section 5.11 hereof, make available
information necessary for the computation of any tax imposed (1) on
transferors of residual interests to transferees that are not Permitted
Transferees or (2) on pass-through entities, any interest in which is
held by an entity which is not a Permitted Transferee. The Trustee
covenants and agrees that it will cooperate with the Servicer in the
foregoing matters and that it will sign, as Trustee, any and all Tax
Returns required to be filed by each REMIC created hereunder.
Notwithstanding the foregoing, at such time as the Trustee becomes the
successor Servicer, the holder of the largest percentage of the Class R
Certificates shall serve as Tax Matters Person until such time as an
entity is appointed to succeed the Trustee as Servicer;
(x) make available to the Internal Revenue Service and those
Persons specified by the REMIC Provisions all information necessary to
compute any tax imposed (A) as a result of the Transfer of an Ownership
Interest in a Class R Certificate to any Person who is not a Permitted
Transferee, including the information described in Treasury regulations
sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess
inclusions" of such Class R Certificate and (B) as a result of any
regulated investment company, real estate investment trust, common
trust fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a Class R
Certificate having as among its record holders at any time any Person
that is not a Permitted Transferee;
(xi) pay out of its own funds, without any right of
reimbursement, any and all tax related expenses of each REMIC created
hereunder (including, but not limited to, tax return preparation and
filing expenses and any professional fees or expenses related to audits
or any administrative or judicial proceedings with respect to each
REMIC created hereunder that involve the Internal Revenue Service or
state tax authorities), other than the expense of obtaining any Opinion
of Counsel required pursuant to Sections 3.03, 5.10 and 8.02 and other
than taxes except as specified herein;
(xii) upon filing with the Internal Revenue Service, the Tax
Matters Person shall furnish to the Holders of the Class R Certificates
the Form 1066 and each Form 1066Q and the Unaffiliated Seller shall
respond promptly to written requests made not more frequently than
quarterly by any Holder of Class R Certificates with respect to the
following matters:
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(A) the original projected principal and interest
cash flows on the Closing Date on the regular and residual
interests created hereunder and on the Mortgage Loans, based
on the Prepayment Assumption;
(B) the projected remaining principal and interest
cash flows as of the end of any calendar quarter with respect
to the regular and residual interests created hereunder and
the Mortgage Loans, based on the Prepayment Assumption;
(C) the Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and
interest cash flows described above;
(D) the original issue discount (or, in the case of
the Mortgage Loans, market discount) or premium accrued or
amortized through the end of such calendar quarter with
respect to the regular or residual interests created hereunder
and with respect to the Mortgage Loans, together with each
constant yield to maturity used in computing the same;
(E) the treatment of losses realized with respect to
the Mortgage Loans or the regular interests created hereunder,
including the timing and amount of any cancellation of
indebtedness income of any REMIC created hereunder with
respect to such regular interests or bad debt deductions
claimed with respect to the Mortgage Loans;
(F) the amount and timing of any non-interest
expenses of any REMIC created hereunder; and
(G) any taxes (including penalties and interest)
imposed on any REMIC created hereunder, including, without
limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or
state or local income or franchise taxes; and
(xiii) make any other required reports in respect of interest
payments in respect of the Mortgage Loans and acquisitions and
abandonments of Mortgaged Property to the Internal Revenue Service
and/or the borrowers, as applicable.
(b) In the event that 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 any REMIC created hereunder as
defined in Section 860G(c) of the Code, on any contribution to any REMIC created
hereunder after the Startup Day pursuant to Section 860G(d) of the Code, or any
other tax is imposed, such tax shall be paid by (i) the Trustee, if such tax
arises out of or results from a breach by the Trustee 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, or
otherwise (iii) the holders of the Class R Certificates in proportion to their
Percentage Interests. To the extent such tax is chargeable against the holders
of the Class R Certificates, notwithstanding anything to the contrary contained
herein, the Trustee is hereby authorized to retain from amounts otherwise
distributable to the Holders of the Class R Certificates on any Distribution
Date sufficient funds to for the payment of such tax.
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Section 11.16 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.
(b) THE DEPOSITOR, THE SERVICER, THE BACK-UP SERVICER, THE COLLATERAL
AGENT AND THE TRUSTEE HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN
THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF
ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE
MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 10.06
HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE
SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE
DEPOSITOR, THE SERVICER, THE BACK-UP SERVICER, THE COLLATERAL AGENT AND THE
TRUSTEE EACH HEREBY WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE DEPOSITOR, THE
SERVICER, THE BACK-UP SERVICER THE COLLATERAL AGENT OR THE TRUSTEE TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY OF THEIR RIGHTS
TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.
(c) THE DEPOSITOR, THE SERVICER, THE BACK-UP SERVICER, THE COLLATERAL
AGENT AND THE TRUSTEE EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT.
INSTEAD, ANY DISPUTE WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Servicer, the Back-up Servicer, the Trustee,
Collateral Agent and the Depositor have caused their names to be signed hereto
by their respective officers thereunto duly authorized as of the day and year
first above written.
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP., as Depositor
By:
------------------------------
Name:
Title:
AMERICAN BUSINESS CREDIT, INC., as Servicer
By:
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Name:
Title:
JPMORGAN CHASE BANK, as Trustee, Collateral
Agent and Back-up Servicer
By:
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Name:
Title:
[Signature Page to Pooling and Servicing Agreement]