EXECUTION COPY
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
Depositor,
CHASE MANHATTAN MORTGAGE CORPORATION,
Servicer,
THE PROVIDENT BANK,
Servicer,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2003
------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC. TRUST 2003-HE1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2003-HE1
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans..............
Section 2.03 Representations and Warranties; Remedies for Breaches of
Representations and Warranties with Respect to the
Mortgage Loans...............................................
Section 2.04 The Depositor and the Mortgage Loans.........................
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions................................................
Section 2.06 Execution and Delivery of Certificates.......................
Section 2.07 REMIC Matters................................................
Section 2.08 Representations and Warranties of the Depositor..............
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans..........................
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers.................................................
Section 3.03 Successor Subservicers.......................................
Section 3.04 Liability of the Servicers...................................
Section 3.05 No Contractual Relationship between Subservicers and the
Trustee......................................................
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee......................................................
Section 3.07 Collection of Certain Mortgage Loan Payments.................
Section 3.08 Subservicing Accounts........................................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts..............................................
Section 3.10 Collection Accounts..........................................
Section 3.11 Withdrawals from the Collection Accounts.....................
Section 3.12 Investment of Funds in the Accounts..........................
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage........................................
Section 3.14 Enforcement of Due-On-Sale Clauses Assumption Agreements.....
Section 3.15 Realization upon Defaulted Mortgage Loans....................
Section 3.16 Release of Mortgage Files....................................
Section 3.17 Title, Conservation and Disposition of REO Property..........
Section 3.18 Notification of Adjustments..................................
Section 3.19 Access to Certain Documentation and Information Regarding
the Mortgage Loans...........................................
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee.........................
Section 3.21 Servicing Compensation.......................................
Section 3.22 Annual Statement as to Compliance............................
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements..............................
Section 3.24 Trustee to Act as Servicer...................................
Section 3.25 Compensating Interest........................................
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.....................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances.....................................................
Section 4.02 Priorities of Distribution...................................
Section 4.03 Monthly Statements to Certificateholders.....................
Section 4.04 Certain Matters Relating to the Determination of LIBOR.......
Section 4.05 Allocation of Applied Realized Loss Amounts..................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.............................................
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.....................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............
Section 5.04 Persons Deemed Owners........................................
Section 5.05 Access to List of Certificateholders' Names and Addresses....
Section 5.06 Maintenance of Office or Agency..............................
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the Servicers.....
Section 6.02 Merger or Consolidation of the Depositor or a Servicer........
Section 6.03 Limitation on Liability of the Depositor, the Servicers
and Others...................................................
Section 6.04 Limitation on Resignation of a Servicer......................
Section 6.05 Additional Indemnification by the Servicers; Third Party
Claims.......................................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Trustee to Act; Appointment of Successor.....................
Section 7.03 Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee........................................
Section 8.02 Certain Matters Affecting the Trustee........................
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans........
Section 8.04 Trustee May Own Certificates.................................
Section 8.05 Trustee's Fees and Expenses..................................
Section 8.06 Eligibility Requirements for the Trustee.....................
Section 8.07 Resignation and Removal of the Trustee.......................
Section 8.08 Successor Trustee............................................
Section 8.09 Merger or Consolidation of the Trustee.......................
Section 8.10 Appointment of Co-Trustee or Separate Trustee................
Section 8.11 Tax Matters..................................................
Section 8.12 Periodic Filings.............................................
Section 8.13 Tax Classification of the Excess Reserve Fund Account and
the Cap Agreement............................................
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage
Loans........................................................
Section 9.02 Final Distribution on the Certificates.......................
Section 9.03 Additional Termination Requirements..........................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment....................................................
Section 10.02 Recordation of Agreement; Counterparts.......................
Section 10.03 Governing Law................................................
Section 10.04 Intention of Parties.........................................
Section 10.05 Notices......................................................
Section 10.06 Severability of Provisions...................................
Section 10.07 Assignment; Sales; Advance Facilities........................
Section 10.08 Limitation on Rights of Certificateholders...................
Section 10.09 Inspection and Audit Rights..................................
Section 10.10 Certificates Nonassessable and Fully Paid....................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of Chase Manhattan Mortgage
Corporation as Servicer
Schedule III Representations and Warranties of The Provident Bank as Servicer
Schedule IV Representations and Warranties of The Provident Bank as to the
Mortgage Loans
Schedule V Representations and Warranties of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. as to the Mortgage Loans
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of Trustee
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certificate to be provided with Form 10-K
Exhibit M Form of Certification of the Trustee to be provided to Depositor
Exhibit N Form of Certification of each Servicer to be provided to Depositor
THIS POOLING AND SERVICING AGREEMENT, dated as of June 1, 2003,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC., a Delaware corporation, as depositor
(the "Depositor"), CHASE MANHATTAN MORTGAGE CORPORATION, a Delaware corporation,
as servicer ("Chase"), THE PROVIDENT BANK, an Ohio banking corporation, as
servicer ("Provident" and, together with Chase, the "Servicers"), and DEUTSCHE
BANK NATIONAL TRUST COMPANY, a national banking association, as trustee (the
"Trustee"),
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that two segregated asset pools within the
Trust Fund be treated for federal income tax purposes as comprising two REMICs
(each, a "REMIC" or, in the alternative, the Lower Tier REMIC and the Upper Tier
REMIC, respectively). Each Class of Certificates, other than the Class P and
Class R Certificates, other than the right of each Class of LIBOR Certificates
to receive Basis Risk CarryForward Amounts and the right of the Class X
Certificates to receive payments from the Cap Agreement, represents ownership of
a regular interest in the Upper Tier REMIC for purposes of the REMIC Provisions.
The Class R Certificate represents ownership of the sole class of residual
interest in each of the Lower Tier REMIC and the Upper Tier REMIC for purposes
of the REMIC Provisions. The Startup Day for each REMIC described herein is the
Closing Date. The latest possible maturity date for each Certificate is the
latest date referenced in Section 2.07. The Upper Tier REMIC shall hold as
assets the several classes of uncertificated Lower Tier Regular Interests, set
out below. Each such Lower Tier Regular Interest is hereby designated as a
regular interest in the Lower Tier REMIC. The Class LT-A-1, Class LT-A-2, Class
LT-A-3, Class LT-A-4, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-B-1,
Class LT-B-2 and Class LT-B-3 Interests are hereby designated the LT Accretion
Directed Classes (the "LT Accretion Directed Classes"). The Class P Certificates
represent beneficial ownership of the Prepayment Charges, each Class of LIBOR
Certificates represents beneficial ownership of a regular interest in the Upper
Tier REMIC and the right to receive Basis Risk CarryForward Amounts and the
Class X Certificates represent beneficial ownership of a regular interest in the
Upper Tier REMIC, the Excess Reserve Fund Account and the Cap Agreement, which
portions of the Trust Fund shall be treated as a grantor trust.
Corresponding
Lower Tier Lower Tier Initial Lower Tier Upper Tier
Class Designation Interest Rate Principal Amount REMIC Class
------------------ ------------- ------------------------- ------------
Class LT-A-1 (1) 1/2 initial Corresponding A-1
Upper Tier REMIC initial
principal balance
Class LT-A-2 (1) 1/2 initial Corresponding A-2
Upper Tier REMIC initial
principal balance
Class LT-A-3 (1) 1/2 initial Corresponding A-3
Upper Tier REMIC initial
principal balance
Class LT-A-4 (1) 1/2 initial Corresponding A-4
Upper Tier REMIC initial
principal balance
Class LT-M-1 (1) 1/2 initial Corresponding M-1
Upper Tier REMIC initial
principal balance
Class LT-M-2 (1) 1/2 initial Corresponding M-2
Upper Tier REMIC initial
principal balance
Class LT-M-3 (1) 1/2 initial Corresponding M-3
Upper Tier REMIC initial
principal balance
Class LT-B-1 (1) 1/2 initial Corresponding B-1
Upper Tier REMIC initial
principal balance
Class LT-B-2 (1) 1/2 initial Corresponding B-2
Upper Tier REMIC initial
principal balance
Class LT-B-3 (1) 1/2 initial Corresponding B-3
Upper Tier REMIC initial
principal balance
Class LT-Accrual (1) 1/2 Pool Stated Principal
Balance plus 1/2 Subordinated
Amount, less $2,000
Class LT-Group I (2) $924.61 (4)
Class LT-Group II (3) $1,075.39 (4)
Class LT-R (5) (5)
------------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap.
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group I Cap.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group II
Cap.
(4) On the Closing Date, the Initial Lower Tier Principal Amount of Class
LT-Group I Interest shall be $924.60717544, and the Initial Lower Tier
Principal Amount of the Class LT-Group II Interest shall be
$1,075.39282456. For all future Distribution Dates, the principal balances
of these Lower Tier Regular Interests shall be rounded to eight decimal
places.
(5) The Class LT-R Interest is the sole class of residual interest in the
Lower Tier REMIC and it does not have a principal amount or an interest
rate.
The Lower Tier REMIC shall hold as assets all of the assets included
in the Trust Fund other than Prepayment Charges, the Cap Agreement, the Excess
Reserve Fund Account, and the Lower Tier Regular Interests.
On each Distribution Date, 50% of the increase in the Subordinated
Amount will be payable as a reduction of the principal balances of the LT
Accretion Directed Classes (each such Class will be reduced by an amount equal
to 50% of any increase in the Subordinated Amount that is attributable to a
reduction in the principal balance of its Corresponding Class) and will be
accrued and added to the principal balance of the Class LT Accrual Interest. On
each Distribution Date, the increase in the principal balance of the Class LT
Accrual Interest may not exceed interest accruals for such Distribution Date for
the Class LT Accrual Interest. In the event that: (i) 50% of the increase in the
Subordinated Amount exceeds (ii) interest accruals on the Class LT 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 Subordinated Amount for purposes of determining the
amount of interest accrual on the Class LT Accrual Interest payable as principal
on the LT Accretion Directed Classes on the next Distribution Date pursuant to
the first sentence of this paragraph. All payments of scheduled principal and
prepayments of principal generated by the Mortgage Loans shall be allocated (i)
50% to the Class LT Accrual Interest, the Class LT Group I Interest and the
Class LT Group II Interest (and further allocated among these Lower Tier Regular
Interests in the manner described below) and (ii) 50% to the LT Accretion
Directed Classes (principal payments shall be allocated among such LT Accretion
Directed Classes in an amount equal to 50% of the principal amounts allocated to
their respective Corresponding Classes), until paid in full. Notwithstanding the
above, principal payments allocated to the Class X Certificates that result in
the reduction in the Subordinated Amount shall be allocated to the Class LT
Accrual Interest (until paid in full). Realized Losses shall be applied so that
after all distributions have been made on each Distribution Date (i) the
principal balance of each LT Accretion Directed Class is equal to 50% of the
principal balance of its Corresponding Class, and (ii) the Class LT Accrual
Interest, the Class LT Group I Interest and the Class LT Group II Interest (and
further allocated among these Lower Tier Regular Interests in the manner
described below) is equal to 50% of the aggregate Stated Principal Balance of
the Mortgage Loans plus 50% of the Subordinated Amount. As between the Class LT
Accrual Interest, the Class LT Group I Interest and the Class LT Group II
Interest, all payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans, and all Realized Losses, allocable to such
Lower Tier Regular Interests shall be allocated (i) to the Class LT Accrual
Interest in the same proportion that the then outstanding principal balance of
such Lower Tier Regular Interest bears to the then outstanding aggregate
principal balance of the Class LT Accrual Interest, the Class LT Group I
Interest and the Class LT Group II Interest and (ii) the remainder to each of
the Class LT Group I Interest and the Class LT Group II Interest in the same
proportion that the then outstanding aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group bears to the then outstanding aggregate
Stated Principal Balance of the Mortgage Loans.
The Upper Tier REMIC shall issue the following classes of Upper Tier
Regular Interests and each such interest, other than the Class UT-R Interest, is
hereby designated as a regular interest in the Upper Tier REMIC.
Upper Tier
Interest Rate Initial Upper Tier
and Principal Amount
Corresponding and Corresponding
Upper Tier Class Pass-Through Class Certificate Corresponding
Class Designation Rate Balance Certificate Class
----------------- ------------------ ----------------- -----------------
Class A-1 (1) $332,220,000 Class A-1(8)
Class A-2 (2) $229,398,000 Class A-2(8)
Class A-3 (3) $100,000,000 Class A-3(8)
Class A-4 (4) $57,000,000 Class A-4(8)
Class M-1 (5) $58,388,000 Class M-1(8)
Class M-2 (5) $49,405,000 Class M-2(8)
Class M-3 (5) $14,372,000 Class M-3(8)
Class B-1 (5) $13,923,000 Class B-1(8)
Class B-2 (5) $11,679,000 Class B-2(8)
Class B-3 (5) $12,576,000 Class B-3(8)
Class X (6) $ 0(6) Class X(6)
Class UT-R (7) $ 0 Class R
------------
(1) The Class A-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.44%, (ii) the Loan Group I
Cap and (iii) the WAC Cap or (b) after the Optional Termination Date, the
least of (i) LIBOR plus 0.88%, (ii) the Loan Group I Cap and (iii) the WAC
Cap.
(2) The Class A-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.37%, (ii) the Loan Group
II Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.74%, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(3) The Class A-3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.11%, (ii) the Loan Group
II Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 0.22%, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(4) The Class A-4 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus 0.50%, (ii) the Loan Group
II Cap and (iii) the WAC Cap or (b) after the Optional Termination Date,
the least of (i) LIBOR plus 1.00%, (ii) the Loan Group II Cap and (iii)
the WAC Cap.
(5) The Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3
Interests will bear interest during each Interest Accrual Period at a per
annum rate equal to (a) on or prior to the Optional Termination Date, the
lesser of (i) LIBOR plus 0.80%, 1.90%, 2.25%, 3.15%, 3.75%, and 3.75%,
respectively, and (ii) the WAC Cap or (b) after the Optional Termination
Date, the lesser of (i) LIBOR plus 1.20%, 2.85%, 3.375%, 4.725%,
and 5.625%, respectively, and (ii) the WAC Cap.
(6) The Class X Interest has an initial principal balance of $19,312,454, but
it will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the principal balances of the Lower Tier Regular Interests as of the first
day of the related Interest Accrual Period. With respect to any Interest
Accrual Period, the Class X Interest shall bear interest at a rate equal
to the excess, if any, of the WAC Cap over the product of (i) 2 and (ii)
the weighted average Pass-Through Rate of the Lower Tier REMIC Interests,
where the interest rate on each of the Class LT-Accrual Interest, Class
LT-Group I Interest and Class LT-Group II Interest is subject to a cap
equal to zero and each LT Accretion Directed Class is subject to a cap
equal to the Pass-Through Rate on its Corresponding Class. With respect to
any Distribution Date, interest that so accrues on the notional principal
balance of the Class X Interest shall be deferred in an amount equal to
any increase in the Subordinated Amount on such Distribution Date. Such
deferred interest shall not itself bear interest. The Class X Certificates
will represent beneficial ownership of the Class X Interest, the Cap
Agreement, and amounts in the Excess Reserve Fund Account, subject to the
obligation to make payments from the Excess Reserve Fund Account in
respect of Basis Risk CarryForward Amounts. For federal income tax
purposes, the Trustee will treat a Class X Certificateholder's obligation
to make payments from the Excess Reserve Fund Account as payments made
pursuant to an interest rate cap contract written by the Class X
Certificateholders in favor of each Class of LIBOR Certificates. Such
rights of the Class X Certificateholders and LIBOR Certificateholders
shall be treated as held in a portion of the Trust Fund that is treated as
a grantor trust under subpart E, Part I of subchapter J of the Code.
(7) The Class UT-R Interest is the sole class of residual interest in the
Upper Tier REMIC. The Class UT-R Interest does not have an interest rate.
(8) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account in respect of any
Basis Risk CarryForward Amounts. For federal income tax purposes, the
Trustee will treat a Certificateholder's right to receive payments from
the Excess Reserve Fund Account as payments made pursuant to an interest
rate cap contract written by the Class X Certificateholders.
The minimum denomination for each Class of Certificates, other than
the Class P, Class R and the Class X Certificates, will be $25,000 with integral
multiples of $1 in excess thereof. The Class P, Class R and the Class X
Certificates will each represent a 100% Percentage Interest in such class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates............. All Classes of Certificates other
than the Physical Certificates.
Class A Certificates................ Class A-1, Class A-2, Class A-3 and
Class A-4 Certificates.
Subordinated Certificates........... Class M-1, Class M-2, Class B-1 and
Class B-2 Certificates.
Delay Certificates.................. None.
ERISA-Restricted Certificates....... Class R Certificates, Class P
Certificates and Class X
Certificates; any certificate with a
rating below the lowest applicable
permitted rating under the
Underwriters' Exemption.
LIBOR Certificates.................. Class A and Subordinated
Certificates.
Non-Delay Certificates.............. Class A, Class X and Subordinated
Certificates.
Offered Certificates................ All Classes of Certificates other
than the Private Certificates.
Physical Certificates............... Class P, Class X and Class R
Certificates.
Private Certificates................ Class A-1, Class P, Class X and
Class R Certificates.
Rating Agencies..................... ▇▇▇▇▇'▇, Fitch and Standard & Poor's.
Regular Certificates................ All Classes of Certificates other
than the Class P and Class R
Certificates.
Residual Certificates............... Class R Certificates.
Subordinated Certificates........... Class M-1, Class M-2, Class M-3,
Class B-1, Class B-2 and Class B-3
Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Aames: Aames Capital Corporation, a California corporation, and its
successors in interest.
Aames Assignment Agreement: The Assignment and Recognition
Agreement, dated as of June 27, 2003, by and among the Depositor, the Purchaser
and Aames.
Aames Mortgage Loans: The Mortgage Loans for which Aames is
identified as Originator on the Mortgage Loan Schedule.
Aames Purchase Agreement: The Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of September 1, 2002, as amended by
Amendment No. 1, dated as of February 27, 2003, and as further amended by
Amendment No. 2, dated as of March 31, 2003, each by and between Aames and the
Purchaser, as assigned by the Purchaser to the Depositor, solely insofar as the
Aames Purchase Agreement relates to the Aames Mortgage Loans, pursuant to the
Aames Assignment Agreement.
Aames Servicing Transfer Date: April 4, 2003 with respect to the
Aames Mortgage Loans purchased by the Purchaser on February 27, 2003, or May 16,
2003 with respect to the Aames Mortgage Loans purchased by the Purchaser on
March 31, 2003.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Accounts, the Distribution Account,
any Escrow Account or the Excess Reserve Fund Account. Each Account shall be an
Eligible Account.
Accredited: Accredited Home Lenders, Inc., a California corporation,
and its successors in interest.
Accredited Assignment Agreement: The Assignment and Recognition
Agreement, dated as of June 27, 2003, by and among the Depositor, the Purchaser
and Accredited.
Accredited Mortgage Loans: The Mortgage Loans for which Accredited
is identified as Originator on the Mortgage Loan Schedule.
Accredited Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of March 1, 2003, by and
between Accredited and the Purchaser, as assigned by the Purchaser to the
Depositor, solely insofar as the Accredited Purchase Agreement relates to the
Accredited Mortgage Loans, pursuant to the Accredited Assignment Agreement.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of LIBOR Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Mortgage Loan, the first Due Date on
which the related Mortgage Rate adjusts as set forth in the related Mortgage
Note and each Due Date thereafter on which the Mortgage Rate adjusts as set
forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 10.07.
Advancing Person: The Person to whom either Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 10.07.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in each Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
on the Mortgage Loans received after the end of the related Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the
related Due Period.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
LIBOR Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment Agreement: The Aames Assignment Agreement, the Accredited
Assignment Agreement, the Provident Assignment Agreement or the New Century
Assignment Agreement, as applicable.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received by the Servicers prior to the related Determination Date, together
with any P&I Advances in respect thereof; (ii) all Condemnation Proceeds,
Insurance Proceeds and Liquidation Proceeds received by the Servicers during the
related Prepayment Period (in each case, net of unreimbursed expenses incurred
in connection with a liquidation or foreclosure and unreimbursed Advances, if
any); (iii) all partial or full prepayments on the Mortgage Loans received by
the Servicers during the related Prepayment Period together with all
Compensating Interest thereon (excluding any Prepayment Charges); (iv) all
Substitution Adjustment Amounts with respect to the substitutions of Mortgage
Loans that occur during the month in which such Distribution Date occurs; and
(v) amounts received with respect to such Distribution Date as the Repurchase
Price in respect of a Mortgage Loan repurchased by any Originator, Provident or
the Depositor, as applicable, as of such Distribution Date; reduced by (y)
amounts in reimbursement for Advances previously made with respect to the
Mortgage Loans and other amounts as to which the Servicers, the Depositor or the
Trustee are entitled to be paid or reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that provided on the date of
origination for an amortization schedule extending beyond its stated maturity
date.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the amount of
interest such Class of Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of LIBOR and the
applicable Pass-Through Margin on such Class of Certificates for such
Distribution Date, over (ii) the amount of interest payable on such Class of
Certificates at, with respect to the Class A-1 Certificates, the lesser of the
Loan Group I Cap or the WAC Cap, with respect to each Class of Group II Class A
Certificates, the lesser of the Loan Group II Cap or the WAC Cap, and with
respect to each other Class of Regular Certificates, the WAC Cap, as applicable,
for such Distribution Date and (B) the Basis Risk CarryForward Amount for such
Class of Certificates for all previous Distribution Dates not previously paid,
together with interest thereon at a rate equal to the sum of LIBOR and the
applicable Pass-Through Margin for such Class of Certificates for such
Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk CarryForward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments).
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the State of New
York, California, Arizona, Ohio or New Jersey, (b) a state in which a Servicer's
servicing operations are located, or (c) the State in which the Trustee's
operations are located, are authorized or obligated by law or executive order to
be closed.
Cap Agreement: The interest rate cap agreement, dated June 27, 2003,
between the Cap Provider and the Depositor, or any replacement thereof.
Cap Provider: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Services, Inc., a Delaware
corporation, and its successors in interest.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class P or Class R Certificates, at any date, the maximum dollar
amount of principal to which the Holder thereof is then entitled hereunder, such
amount being equal to the Denomination thereof minus all distributions of
principal previously made with respect thereto and in the case of any
Subordinated Certificates, reduced by any Applied Realized Loss Amounts
applicable to such Class of Subordinated Certificates. The Class P and Class R
Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided, however,
that if any such Person (including the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Trustee is entitled to rely conclusively
on a certification of the Depositor or any affiliate of the Depositor in
determining which Certificates are registered in the name of an affiliate of the
Depositor.
Certification: As specified in Section 8.12.
Chase: Chase Manhattan Mortgage Corporation, a New Jersey
corporation, and its successors in interest.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificates: The Class A-1, Class A-2, Class A-3 and Class
A-4 Certificates.
Class A Certificate Group: The Class A-1 Certificates or the Group
II Class A Certificates, as applicable.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (A) with respect to the Class A-1 Certificates, a fraction, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to the principal received or
advanced on the Group I Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date; and (B) with respect to
the Group II Class A Certificates, a fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount for such Distribution Date that is
attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 60.00% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over $4,491,367.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1 Certificates".
Class A-2 Certificates: All Certificates bearing the class
designation of "Class A-2 Certificates".
Class A-3 Certificates: All Certificates bearing the class
designation of "Class A-3 Certificates".
Class A-4 Certificates: All Certificates bearing the class
designation of "Class A-4 Certificates".
Class B Certificates: The Class B-1, Class B-2 and Class B-3
Certificates.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B 1 Certificates".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), and (E) the Class Certificate Balance of the Class B-1
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 90.30% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$4,491,367.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2 Certificates".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class B-1
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount for such Distribution Date) and (F) the Class
Certificate Balance of the Class B-2 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 92.90% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $4,491,367.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3 Certificates".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class B-1
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount for such
Distribution Date) and (G) the Class Certificate Balance of the Class B-3
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 95.70% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$4,491,367.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1 Certificates."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 73.00%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $4,491,367.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2 Certificates."
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 84.00% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$4,491,367.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3 Certificates".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 87.20% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $4,491,367.
Class P Certificates: All Certificates bearing the designation of
"Class P Certificates".
Class R Certificates: All Certificates bearing the designation of
"Class R Certificates".
Class X Certificates: All Certificates bearing the designation of
"Class X Certificates".
Class X Distributable Amount: On any Distribution Date, the sum of
(i) as a distribution in respect of interest, the amount of interest that has
accrued on the Class X Interest and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus (ii) as a
distribution in respect of principal, any portion of the principal balance of
the Class X Interest which is distributable as a Subordination Reduction Amount,
minus (iii) any amounts paid as a Basis Risk Payment.
Class X Interest: The Upper Tier Regular Interest represented by the
Class X Certificates as specified and described in the Preliminary Statement and
the related footnote thereto.
Closing Date: June 27, 2003.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Compensating Interest: For any Distribution Date, the lesser of (a)
the Prepayment Interest Shortfall, if any, for such Distribution Date, with
respect to voluntary Principal Prepayments in full by the Mortgagor (excluding
any payments made upon liquidation of the Mortgage Loan) and (b) the amount of
the Servicing Fee payable to the applicable Servicer for such Distribution Date.
Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Corporate Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which office at the date of the
execution of this Agreement is located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Trust Administration-MS03H1, facsimile no. (714)
247-6478 and which is the address to which notices to and correspondence with
the Trustee should be directed.
Corresponding Class: The class of interests in any REMIC created
under this Agreement that corresponds to the Class of interests in another such
REMIC or to a Class of Certificates in the manner set out below:
Lower Tier Upper Tier Corresponding Class
Class Designation Regular Interest of Certificates
----------------- ---------------- -------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2 Class A-2 Class A-2
Class LT-A-3 Class A-3 Class A-3
Class LT-A-4 Class A-4 Class A-4
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
N/A Class X Class X
Cumulative Loss Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
calendar month preceding the month in which such Distribution Date occurs and
the denominator of which is the Cut-off Date Pool Principal Balance of the
Mortgage Loans.
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (a) - (h) as listed on Exhibit K
hereto.
Cut-off Date: June 1, 2003
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date (after
giving effect to payments of principal due on that date, whether or not
received).
Data Tape Information: The information provided by the Originators
(or in the case of items (2) and (8) below with respect to the Aames Mortgage
Loans, by Provident) as of June 1, 2003 to the Depositor or the Purchaser
setting forth the following information with respect to each Mortgage Loan: (1)
the Mortgagor's name; (2) as to each Mortgage Loan, the Scheduled Principal
Balance as of the Cut Off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a
code indicating whether the Mortgaged Property is owner occupied; (6) the type
of Mortgaged Property; (7) the first date on which the Scheduled Payment was due
on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (8) the "paid through date" based on
payments received from the related Mortgagor; (9) the original principal amount
of the Mortgage Loan; (10) with respect to Adjustable Rate Mortgage Loans, the
Maximum Mortgage Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or
Adjustable Rate Mortgage Loan); (12) a code indicating the purpose of the loan
(i.e., purchase, rate and term refinance, equity take out refinance); (13) a
code indicating the documentation style (i.e., full, asset verification, income
verification and no documentation); (14) the credit risk score (FICO score);
(15) the loan credit grade classification (as described in the underwriting
guidelines); (16) with respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Rate; (17) the Mortgage Rate at origination; (18) with respect
to each Adjustable Rate Mortgage Loan, the first Adjustment Date immediately
following the Cut off Date; (19) the value of the Mortgaged Property; (20) a
code indicating the type of Prepayment Charges applicable to such Mortgage Loan,
if any; (21) with respect to each Adjustable Rate Mortgage Loan, the Periodic
Mortgage Rate Cap; (22) the applicable Originator of such Mortgage Loan and (23)
if such Mortgage Loan is covered by a primary mortgage insurance policy, the
primary mortgage insurance rate. With respect to the Mortgage Loans in the
aggregate, the Data Tape Information shall set forth the following information,
as of the Cut off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquent: A Mortgage Loan is "Delinquent" if any Scheduled Payment
due on a Due Date is not made by the close of business on the next scheduled Due
Date for such Mortgage Loan. A Mortgage Loan is "30 days Delinquent" if the
Scheduled Payment due on a Due Date has not been received by the close of
business on the last day of the month immediately succeeding the month in which
such Due Date occurs.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of the United
States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated P-1 by ▇▇▇▇▇'▇, F1+ by Fitch and A-1 by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Remittance Date, the 18th
day (or if such day is not a Business Day, the immediately preceding Business
Day) in the calendar month in which such Remittance Date occurs.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name of the Trustee
for the benefit of the Certificateholders and designated "Deutsche Bank National
Trust Company in trust for registered holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Mortgage Pass-Through Certificates, Series 2003-HE1." Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:30 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.
Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such day is not a Business Day, the
next succeeding Business Day, commencing in July 2003.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
that Distribution Date occurs and ending on the first day of the calendar month
in which that Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term unsecured
debt obligations of which (or, in the case of a depository institution or trust
company that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated "A-1" by Standard & Poor's, "F-1"
by Fitch and "P-1" by ▇▇▇▇▇'▇ (or a comparable rating if another Rating Agency
is specified by the Depositor by written notice to each Servicer) at the time
any amounts are held on deposit therein, (ii) an account or accounts the
deposits in which are fully insured by the FDIC, (iii) a trust account or
accounts maintained with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity or (iv) any other account
acceptable to each Rating Agency. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b) of this Agreement.
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c) in the
name of the Trustee for the benefit of the Regular Certificateholders and
designated "Deutsche Bank National Trust Company in trust for registered holders
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1, Mortgage Pass-Through
Certificates, Series 2003-HE1." Funds in the Excess Reserve Fund Account shall
be held in trust for the Regular Certificateholders for the uses and purposes
set forth in this Agreement. Amounts on deposit in the Excess Reserve Fund
Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution Date,
the excess, if any, of (a) the Subordinated Amount on such Distribution Date
over (b) the Specified Subordinated Amount for such Distribution Date.
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate equal
to the sum of the Servicing Fee Rate, the Trustee Fee Rate and any lender-paid
primary mortgage insurance fee rate, if applicable.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Trustee Fee and any lender-paid primary mortgage insurance fee, if
applicable.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Subordination Deficiency for such Distribution Date.
▇▇▇▇▇▇ Mae: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ ▇▇▇
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the applicable Originator, Provident or the Depositor, as applicable, as
contemplated by this Agreement), a determination made by the applicable Servicer
that all Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and
other payments or recoveries which the applicable Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. Each Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in each of the
following months:
Month of Final
Scheduled
Distribution Date
-----------------
Class A-1 Certificates.................................... May, 2033
Class A-2 Certificates.................................... May, 2033
Class A-3 Certificates.................................... May, 2033
Class A-4 Certificates.................................... May, 2033
Class M-1 Certificates.................................... May, 2033
Class M-2 Certificates.................................... May, 2033
Class M-3 Certificates.................................... May, 2033
Class B-1 Certificates.................................... May, 2033
Class B-2 Certificates.................................... May, 2033
Class B-3 Certificates.................................... May, 2033
Class X Certificates...................................... May, 2033
Class P Certificates...................................... May, 2033
Class R Certificates...................................... May, 2033
Fitch: Fitch, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the address for notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MBS Monitoring - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. 2003-HE1, or such other address as Fitch may hereafter furnish to
the Depositor and the Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Class A Certificates: The Class A-2, Class A-3 and Class
A-4 Certificates.
Group II Class A Sequential Certificates: The Class A-3 and Class
A-4 Certificates.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and the Corresponding Class of Lower Tier Regular Interests and any
Distribution Date, the period commencing on the Distribution Date occurring in
the month preceding the month in which the current Distribution Date occurs and
ending on the day immediately preceding the current Distribution Date (or, in
the case of the first Distribution Date, the period from and including the
Closing Date to but excluding such first Distribution Date). For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Cap Payment: Beginning on the first Distribution Date
and continuing through the immediately succeeding 35 Distribution Dates
thereafter, an amount, if any, equal to the product of (a) the lesser of (i) (A)
prior to the reset date under the Cap Agreement occurring in July 2005, the
percentage by which one-month LIBOR (as defined in the Cap Agreement) as of the
related reset date under the Cap Agreement exceeds 7.00% or (B) on and after the
reset date under the Cap Agreement occurring in July 2005 until the reset date
under the Cap Agreement occurring in June 2006, the percentage by which
one-month LIBOR (as defined in the Cap Agreement) as of the related reset date
under the Cap Agreement exceeds 7.375% and (ii) (A) prior to the reset date
under the Cap Agreement occurring in July 2005, 1.375% or (B) on and after the
reset date under the Cap Agreement occurring in July 2005 until the reset date
under the Cap Agreement occurring in June 2006, 1%, as applicable, and (b) the
product of the notional balance and multiplier for such reset date as set forth
on the schedule attached to the Cap Agreement, calculated on an "actual/360"
basis.
Investment Account: As defined in Section 3.12(a).
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loan to leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding the
commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified (in accordance with this Agreement) that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise.
Loan Group: The Group I Mortgage Loans or the Group II Mortgage
Loans, as applicable.
Loan Group Cap: The Loan Group I Cap or the Loan Group II Cap, as
applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Adjusted
Net Mortgage Rates then in effect on the beginning of the related Due Period on
the Group I Mortgage Loans and (ii) a fraction, the numerator of which is 30 and
the denominator of which is the actual number of days in the Interest Accrual
Period related to such Distribution Date.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Adjusted
Net Mortgage Rates then in effect on the beginning of the related Due Period on
the Group II Mortgage Loans and (ii) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days in the Interest
Accrual Period related to such Distribution Date.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the original outstanding principal amount
of the Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the
lesser of (a) the Appraised Value of the Mortgaged Property at origination, and
(b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower Tier Regular Interest: Each of the Class LT-A-1, Class LT-A-2,
Class LT-A-3, Class LT-A-4, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class
LT-B-1, Class LT-B-2, Class LT-B-3, Class LT-Group I, Class LT-Group II and
Class LT-Accrual Interests as described in the Preliminary Statement.
Lower Tier REMIC: As described in the Preliminary Statement.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.03.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. If ▇▇▇▇▇'▇ is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(b),
the address for notices to Moody's shall be ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor and the Servicers.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition proceeds, Prepayment Charges, and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage Loan,
excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto
as Schedule I, such schedule setting forth the following information with
respect to each Mortgage Loan: (1) the Mortgage Loan number; (2) the city, state
and zip code of the Mortgaged Property; (3) the number and type of residential
units constituting the Mortgaged Property; (4) the current Mortgage Interest
Rate; (5) the current net Mortgage Interest Rate; (6) the current Scheduled
Payment; (7) with respect to each Adjustable Rate Mortgage Loan, the Gross
Margin; (8) the original term to maturity; (9) the scheduled maturity date; (10)
the principal balance of the Mortgage Loan as of the Cut off Date after
deduction of payments of principal due on or before the Cut off Date whether or
not collected; (11) with respect to each Adjustable Rate Mortgage Loan, the next
Interest Rate Adjustment Date; (12) with respect to each Adjustable Rate
Mortgage Loan, the lifetime Mortgage Interest Rate Cap; (13) whether the
Mortgage Loan is convertible or not; (14) the Servicing Fee; (15) whether such
Mortgage Loan is a Group I Mortgage Loan or a Group II Mortgage Loan; (16) the
applicable Originator's name, (17) the date such Mortgage Loan was sold by the
applicable Originator to the Purchaser; and (18) whether such Mortgage Loan
provides for a prepayment penalty as well as the term and amount of such
prepayment penalty, if any.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time in the case of an Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum of
the Compensating Interest payments made on such Distribution Date.
New Century: NC Capital Corporation, a California corporation, and
its successors in interest.
New Century Assignment Agreement: The Assignment and Recognition
Agreement, dated as of June 27, 2003, by and among the Depositor, the Purchaser
and New Century.
New Century Mortgage Loans: The Mortgage Loans for which New Century
is identified as Originator on the Mortgage Loan Schedule.
New Century Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of January 1, 2003, by and
between New Century and the Purchaser, as assigned by the Purchaser to the
Depositor, solely insofar as the New Century Purchase Agreement relates to the
New Century Mortgage Loans, pursuant to the New Century Assignment Agreement.
NIM Securities: Any debt securities issued by the NIM Trust that are
rated by Standard & Poor's.
NIM Trust: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. NIM Trust 2003-HE1N, a
Cayman Islands exempted company with limited liability.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related late
payments, Insurance Proceeds, Condemnation Proceeds, or Liquidation Proceeds on
such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in accordance with Accepted Servicing Practices, will not or, in the case
of a proposed Servicing Advance, would not be ultimately recoverable from
related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise. The determination by the applicable Servicer that it has made a
Nonrecoverable Servicing Advance or that any proposed Servicing Advances, if
made, would constitute a Nonrecoverable Servicing Advance, shall be evidenced by
an Officer's Certificate delivered to the Trustee.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of either
Servicer with responsibility for the servicing of the Mortgage Loans required to
be serviced by such Servicer and listed on a list delivered to the Trustee
pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for a Servicer or a Subservicer, reasonably acceptable to the
Trustee, provided that any Opinion of Counsel relating to (a) qualification of
either the Lower Tier REMIC or Upper Tier REMIC or (b) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of such Servicer of the
Mortgage Loans, (ii) does not have any material direct or indirect financial
interest in such Servicer of the Mortgage Loans or in an affiliate of either and
(iii) is not connected with such Servicer of the Mortgage Loans as an officer,
employee, director or person performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 10% or less of the Cut-off Date Pool
Principal Balance.
Originators: Each of Aames, Accredited, Provident and New Century.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the applicable Servicer in respect of any Remittance Date representing
the aggregate of all payments of principal and interest, net of the Servicing
Fee, that were due during the related Due Period on the Mortgage Loans and that
were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure as
determined pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates, the following percentages: Class A-1 Certificates, 0.44%; Class
A-2 Certificates, 0.37%; Class A-3 Certificates, 0.11%; Class A-4 Certificates,
0.50%; Class M-1 Certificates, 0.80%; Class M-2 Certificates, 1.90%; Class M-3
Certificates, 2.25%; Class B-1 Certificates, 3.15%; Class B-2 Certificates,
3.75%; and Class B-3 Certificates, 3.75%. On the first Distribution Date after
the Optional Termination Date, the Pass-Through Margins shall increase to: Class
A-1 Certificates, 0.88%; Class A-2 Certificates, 0.74%; Class A-3 Certificates,
0.22%; Class A-4 Certificates, 1.00%; Class M-1 Certificates, 1.20%; Class M-2
Certificates, 2.85%; Class M-3 Certificates, 3.375%; Class B-1 Certificates,
4.725%; Class B-2 Certificates, 5.625%; and Class B-3 Certificates, 5.625%.
Pass-Through Rate: For each Class of Certificates and each Lower
Tier Regular Interest, the per annum rate set forth or calculated in the manner
described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Interest Rate adjustment as
set forth in the related Mortgage Note.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by a Servicer, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original maturity
of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or
a remaining maturity of more than 30 days) denominated in United
States dollars and issued by, any Depository Institution and rated
F1+ by Fitch;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United States of America or any state thereof and that are rated by
each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date
of acquisition thereof) that is rated by each Rating Agency that
rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units of money market funds, including money market funds
advised by the Depositor or an Affiliate thereof, that have been
rated "Aaa" by Moody's, "AAA" by Standard & Poor's and at least "AA"
by Fitch; and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies
as a permitted investment of funds backing "Aaa" or "AAA" rated
securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual Certificate
is attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty of such Person or any other U.S.
Person, (vi) an "electing large partnership" within the meaning of Section 775
of the Code and (vii) any other Person so designated by the Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause either the Lower Tier REMIC or the Upper
Tier REMIC to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions. A corporation will not be treated as an instrumentality of the
United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
▇▇▇▇▇▇▇ Mac, a majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by the applicable Servicer with respect to a Mortgage Loan from a
Mortgagor in connection with any voluntary Principal Prepayment in Full pursuant
to the terms of the related Mortgage Note.
Prepayment Interest Shortfall: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was during the related Prepayment Period
the subject of a Principal Prepayment which is not accompanied by an amount
equal to one month of interest that would have been due on such Mortgage Loan on
the next succeeding Due Date and which was applied by the applicable Servicer to
reduce the outstanding principal balance of such Mortgage Loan on a date
preceding the Due Date in the succeeding Prepayment Period, an amount equal to
the product of (a) the Mortgage Rate net of the Servicing Fee Rate for such
Mortgage Loan, (b) the amount of the Principal Prepayment for such Mortgage
Loan, (c) 1/360 and (d) the number of days commencing on the date on which such
Principal Prepayment was applied and ending on the last day of the related
Prepayment Period.
Prepayment Period: With respect to any Remittance Date, the calendar
month preceding the calendar month in which such Remittance Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding any Prepayment
Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period: (i) each scheduled payment of principal on a
Mortgage Loan due during such Due Period and received by the Servicers on or
prior to the related Determination Date or advanced by the applicable Servicer
for the related Remittance Date (including the portion of Insurance Proceeds or
Condemnation Proceeds allocable to principal), and all Principal Prepayments
received during the related Prepayment Period; (ii) the Liquidation Proceeds on
the Mortgage Loans allocable to principal actually collected by the Servicers
during the related Prepayment Period; (iii) the portion of the purchase price
allocable to principal with respect to each Mortgage Loan, the repurchase
obligation for which arose during the related Prepayment Period, that was
repurchased during the period from but excluding the Distribution Account
Deposit Date preceding the prior Distribution Date through Distribution Account
Deposit Date for the current Distribution Date; (iv) all Substitution Adjustment
Amounts with respect to the substitutions of Mortgage Loans that occur during
the calendar month in which such Distribution Date occurs; and (v) the allocable
portion of the proceeds received with respect to the termination of the Trust
Fund (to the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated June 24,
2003, relating to the Offered Certificates.
Provident: The Provident Bank, an Ohio banking corporation, and its
successors in interest.
Provident Assignment Agreement: The Assignment and Recognition
Agreement, dated as of June 27, 2003, by and among the Depositor, the Purchaser
and Provident.
Provident Data Tape Information: The information provided by
Provident to the Depositor as of the Cut-off Date with respect to the Aames
Mortgage Loans setting forth the following information with respect to each such
Mortgage Loan: (1) the last payment date on which a payment was actually applied
to the outstanding principal balance of each Mortgage Loan as of the Cut-off
Date; and (2) the principal balance of each Mortgage Loan as of the Cut-off
Date, after deduction of payments of principal due and collected on or before
the Cut-off Date.
Provident Mortgage Loans: The Mortgage Loans for which Provident is
identified as Originator on the Mortgage Loan Schedule.
Provident Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of March 1, 2003, by and between Provident and
the Purchaser, as assigned by the Purchaser to the Depositor, solely insofar as
the Provident Purchase Agreement relates to the Provident Mortgage Loans,
pursuant to the Provident Assignment Agreement.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreements: Collectively, the Aames Purchase Agreement, the
Accredited Purchase Agreement, the Provident Purchase Agreement and the New
Century Purchase Agreement.
Purchaser: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York
corporation, and its successors in interest, as purchaser of the Mortgage Loans
under each of the Purchase Agreements.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor and the Servicers.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in connection with the liquidation of
such Liquidated Mortgage Loan and net of the amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last Business Day of the month
preceding the month in which such applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended,
or any similar state statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the Business
Day immediately preceding such Distribution Date.
REO Disposition: The final sale by the applicable Servicer of any
REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the Servicer in the name of the Trustee
on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Repurchase Price: (i) With respect to any Mortgage Loan for which a
breach of a representation and warranty made by the Depositor or Provident (with
respect to the Aames Mortgage Loans) hereunder exists, an amount equal to the
sum of (a) the unpaid principal balance of such Mortgage Loan as of the date of
repurchase, (b) interest on such unpaid principal balance of such Mortgage Loan
at the Mortgage Rate from the last date through which interest has been paid and
distributed to the Trustee to the date of repurchase, (c) all unreimbursed
Servicing Advances and (d) all costs and expenses incurred by the Trustee
arising out of or based upon such breach, including without limitation, costs
and expenses relating to the Trustee's enforcement of the repurchase obligation
of Provident or the Depositor hereunder or (ii) with respect to any Mortgage
Loan for which a breach of a representation and warranty made by the applicable
Originator under either the related Purchase Agreement or the related Assignment
Agreement exists, an amount equal to the sum of (a) the unpaid principal balance
of such Mortgage Loan as of the date of repurchase, (b) interest on such unpaid
principal balance of such Mortgage Loan at the Mortgage Rate from the last date
through which interest has been paid and distributed to the Trustee to the date
of repurchase and (c) all unreimbursed Servicing Advances, in each case, to the
extent specified in the definition of "Repurchase Price" in the related Purchase
Agreement. In addition to the Repurchase Price, each Originator, pursuant to the
related Purchase Agreement, is obligated to make certain payments for material
breaches of representation and warranties as further set forth in the related
Purchase Agreement.
Request for Release: The Request for Release submitted by either
Servicer to the Trustee, substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer, any associate, or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers who at such time shall be officers to whom, with respect to a
particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Agreement.
Rule 144A Letter: As defined in Section 5.02(b).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount (in each case after taking into account the distributions of the
Principal Distribution Amount for such Distribution Date) by (y) the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 40.00%.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicer: Chase or Provident, and if a successor servicer to either
is appointed hereunder, such successor. When the term "Servicer" is used in this
Agreement in connection with the administration of servicing obligations with
respect to any Mortgage Loan, Mortgaged Property, REO Property or Mortgage File,
"Servicer" shall mean (i) Chase, or its successor hereunder, with respect to the
Accredited Mortgage Loans and (ii) Provident, or its successor hereunder, with
respect to the Aames Mortgage Loans, the Provident Mortgage Loans and the New
Century Mortgage Loans.
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the applicable Servicer in the
performance of its servicing obligations in connection with a default,
delinquency or other unanticipated event, including, but not limited to, the
cost of (i) the preservation, restoration, inspection and protection of a
Mortgaged Property, (ii) any enforcement, administrative or judicial
proceedings, including foreclosures and litigation, in respect of a particular
Mortgage Loan, (iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property and (iv) the performance of its
obligations under Sections 3.01, 3.09, 3.13 and 3.15 hereof. Neither Servicer
shall be required to make any Nonrecoverable Advances.
Servicing Fee: With respect to each Servicer, each Mortgage Loan
serviced by such Servicer and for any calendar month, an amount equal to one
month's interest at the Servicing Fee Rate on the applicable Stated Principal
Balance of such Mortgage Loan as of the first day of such calendar month. Such
fee shall be payable monthly, for any month or portion thereof during which the
Mortgage Loan is serviced by the such Servicer under this Agreement. The
Servicing Fee is payable solely from the interest portion (including recoveries
with respect to interest from Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds and proceeds received with respect to REO Properties, to
the extent permitted by Section 3.11) of such Scheduled Payment collected by
such Servicer, or as otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Servicer consisting of originals or copies of all
documents in the Mortgage File which are not delivered to the Trustee in the
Custodial File and copies of the Mortgage Loan Documents set forth in Exhibit K
hereto.
Servicing Officer: Any officer of either Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by such Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect to
which any portion of a Scheduled Payment is, as of the last day of the prior Due
Period, two months or more past due (without giving effect to any grace period),
each Mortgage Loan in foreclosure and all REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an amount
equal to 2.15% of the Cut-off Date Pool Principal Balance. On and after the
Stepdown Date, an amount equal to 4.30% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of LIBOR Certificates has been reduced
to zero, to a minimum amount equal to 0.50% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date; provided, however, that
if, on any Distribution Date, a Trigger Event exists, the Specified Subordinated
Amount shall not be reduced to the applicable percentage of the then current
aggregate Stated Principal Balance of the Mortgage Loans until the Distribution
Date on which a Trigger Event no longer exists. When the Class Certificate
Balance of each Class of LIBOR Certificates has been reduced to zero, the
Specified Subordinated Amount will thereafter equal zero.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 10.05(b) the
address for notices to Standard & Poor's shall be Standard & Poor's, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance
Group - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. 2003-HE1, or such other address as
Standard & Poor's may hereafter furnish to the Depositor and the Servicers.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date, minus (ii) all amounts previously remitted to the Trustee with respect to
the related Mortgage Loan representing payments or recoveries of principal
including advances in respect of scheduled payments of principal. For purposes
of any Distribution Date, the Stated Principal Balance of any Mortgage Loan will
give effect to any scheduled payments of principal received by the related
Servicer on or prior to the related Determination Date or advanced by the
related Servicer for the related Remittance Date and any unscheduled principal
payments and other unscheduled principal collections received during the related
Prepayment Period.
Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in July 2006 and (b) the Distribution Date following the
Distribution Date on which the aggregate Class Certificate Balances of the Class
A Certificates have been reduced to zero and (ii) the first Distribution Date on
which the Senior Enhancement Percentage (calculated for this purpose only after
taking into account payments of principal on the Mortgage Loans applied to
reduce the Stated Principal Balance of the Mortgage Loans for the applicable
Distribution Date but prior to any applications of Principal Distribution Amount
to the Certificates) is greater than or equal to the Senior Specified
Enhancement Percentage.
Subordinated Amount: As of any Distribution Date, the excess, if
any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the LIBOR Certificates as of such Distribution Date (after giving effect to
the payment of the Principal Remittance Amount on such Certificates on such
Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution
Date, on or after the Stepdown Date on which no Trigger Event exists, an amount
equal to the lesser of (a) the Excess Subordinated Amount and (b) the Total
Monthly Excess Spread.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02.
Substitute Mortgage Loan: A Mortgage Loan (i) substituted by an
Originator for a Deleted Mortgage Loan pursuant to the terms of the related
Purchase Agreement or (ii) substituted by the Depositor for a Deleted Mortgage
Loan, which, if substituted by the Depositor, must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit J, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not more than 10% less than, the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than and
not more than 1% per annum higher than, that of the Deleted Mortgage Loan; (iii)
have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan;
(iv) have a remaining term to maturity no greater than (and not more than one
year less than that of) the Deleted Mortgage Loan; and (v) comply with each
representation and warranty set forth in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest on the Mortgage Loans received
by the Servicers on or prior to the related Determination Date or advanced by
the Servicers for the related Remittance Date (net of Expense Fees) over (ii)
the sum of the amounts payable to the Certificates pursuant to Section
4.02(a)(i) on such Distribution Date.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a Trigger
Event exists if (i) the quotient (expressed as a percentage) of (x) the rolling
three month average of the Stated Principal Balances of 60+ Day Delinquent
Mortgage Loans, divided by (y) the aggregate Stated Principal Balance of the
Mortgage Loans equals or exceeds 37.50% of the prior period's Senior Enhancement
Percentage or (ii) the quotient (expressed as a percentage) of (x) the aggregate
amount of Realized Losses incurred since the Cut-off Date through the last day
of the related Prepayment Period divided by (y) the Cut-off Date Pool Principal
Balance exceeds the applicable percentages set forth below with respect to such
Distribution Date:
Distribution Date Occurring In Loss Percentage
------------------------------- ---------------------------------------------
July 2006 through June 2007 4.00% for the first month, plus an additional
1/12th of 2.00% for each month thereafter
(e.g., 5.00% in January 2007)
July 2007 through June 2008 6.00% for the first month, plus an additional
1/12th of 1% for each month thereafter (e.g.,
6.50% in January 2008)
July 2008 through June 2009 7.00% for the first month, plus an additional
1/12th of 0.50% for each month thereafter
(e.g., 7.25% in January 2009)
July 2009 and thereafter 7.50%
Trust: The express trust created hereunder in Section 2.01(d).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal with respect thereto
received on or after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or prior to the related Cut-off Date; (ii) the
Collection Accounts, Excess Reserve Fund Account, the Distribution Account, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) with respect to the
Group II Class A Certificates only, the rights of the Depositor under the Cap
Agreement; and (v) all proceeds of the conversion, voluntary or involuntary, of
any of the foregoing.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to the
product of (a) one-twelfth of the Trustee Fee Rate and (b) the aggregate Stated
Principal Balance of the Mortgage Loans as of the first day of the related
Interest Accrual Period.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0050% per
annum.
Underwriters' Exemption: Any exemption listed under footnote 1 of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Unpaid Interest Amounts: As of any Distribution Date and any Class
of Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and (b)
interest on the amount in clause (a) above at the applicable Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
Applied Realized Loss Amounts with respect to such Class over (ii) the sum of
all distributions in reduction of such Applied Realized Loss Amounts on all
previous Distribution Dates. Any amounts distributed to a Class of Subordinated
Certificates in respect of any Unpaid Realized Loss Amount will not be applied
to reduce the Class Certificate Balance of such Class.
Upper Tier Regular Interest: As described in the Preliminary
Statement.
Upper Tier REMIC: As described in the Preliminary Statement.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
state thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the product of (i) the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Mortgage Loans
and (ii) a fraction, the numerator of which is 30 and the denominator of which
is the actual number of days in the Interest Accrual Period related to such
Distribution Date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee for the benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund, together
with all rights of the Depositor under the Assignment Agreements and the
Purchase Agreements (solely insofar as such Agreements relate to the Mortgage
Loans), and the Trustee, on behalf of the Trust, hereby accepts the Trust Fund.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to the Trustee for
the benefit of the Certificateholders the following documents or instruments
with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse" and signed
(which may be by facsimile signature) in the name of the last endorsee by
an authorized officer. To the extent that there is no room on the face of
the Mortgage Notes for endorsements, the endorsement may be contained on
an allonge, if state law so allows and the Trustee is so advised in
writing by the applicable Originator (pursuant to the applicable Purchase
Agreement) that state law so allows;
(ii) the original of any guaranty executed in connection with the
Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If, in
connection with any Mortgage Loan, the original Mortgage cannot be
delivered with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, the Trustee shall notify the applicable Originator to
deliver or cause to be delivered to the Trustee, as required under the
applicable Purchase Agreement, a photocopy of such Mortgage, together with
(i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the applicable Originator (delivered pursuant to
the applicable Purchase Agreement) or a certificate from an escrow
company, a title company or closing attorney stating that such Mortgage
has been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered
to the Trustee upon receipt thereof by the applicable Originator; or (ii)
in the case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank;
(vi) the originals of all intervening assignments of Mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator to the last endorsee with evidence of recording thereon, or if
any such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of Mortgage, the Trustee shall
notify the applicable Originator, to deliver, as required under the
applicable Purchase Agreement, a photocopy of such intervening assignment,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the applicable Originator or a
certificate from an escrow company, a title company or a closing attorney
stating that such intervening assignment of Mortgage has been dispatched
to the appropriate public recording office for recordation and that such
original recorded intervening assignment of Mortgage or a copy of such
intervening assignment of Mortgage certified by the appropriate public
recording office to be a true and complete copy of the original recorded
intervening assignment of Mortgage will be promptly delivered to the
Trustee upon receipt thereof by the applicable Originator; or (ii) in the
case of an intervening assignment where a public recording office retains
the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment;
(vii) the original mortgagee title insurance policy or attorney's
opinion of title and abstract of title, or, in the event such original
title policy is unavailable, a certified true copy of the related policy
binder or commitment for title certified to be true and complete by the
title insurance company; and
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
The Depositor will use its reasonable efforts to assist the Trustee
and the Servicers in enforcing the obligations of the Originators under the
Purchase Agreements.
The Depositor shall cause to be delivered to the Trustee the
applicable recorded document promptly upon receipt from the respective recording
office but in no event later than 180 days from the Closing Date.
From time to time, the Depositor or the applicable Servicer, as
applicable, shall forward to the Trustee additional original documents,
additional documents evidencing an assumption, modification, consolidation or
extension of a Mortgage Loan in accordance with the terms of this Agreement upon
receipt of such documents. All such mortgage documents held by the Trustee as to
each Mortgage Loan shall constitute the "Custodial File".
No later than thirty (30) Business Days following the later of the
Closing Date and the date of receipt by the applicable Servicer of the complete
recording information for a Mortgage, the applicable Servicer shall promptly
submit or cause to be submitted for recording, at the expense of the applicable
Originator as required pursuant to the related Purchase Agreement and at no
expense to the Trust Fund, the Trustee, the applicable Servicer, or the
Depositor, in the appropriate public office for real property records, each
Assignment of Mortgage referred to in Section 2.01(b)(v). Notwithstanding the
foregoing, however, for administrative convenience and facilitation of servicing
and to reduce closing costs, the Assignments of Mortgage shall not be required
to be completed and submitted for recording with respect to any Mortgage Loan
(i) if the Trustee and each Rating Agency have received an opinion of counsel,
satisfactory in form and substance to the Trustee and each Rating Agency to the
effect that the recordation of such Assignments of Mortgage in any specific
jurisdiction is not necessary to protect the Trustee's interest in the related
Mortgage Note or (ii) if the Rating Agencies have each notified the Depositor in
writing that not recording any such Assignments of Mortgage would not cause the
initial ratings on any LIBOR Certificates to be downgraded or withdrawn;
provided, however, that no Servicer shall be held responsible or liable for any
loss that occurs because an Assignment of Mortgage was not recorded, but only to
the extent such Servicer has not received prior knowledge of the act or omission
that causes such loss. However, if at any time that clause (i) or (ii) of the
preceding sentence is no longer true or if foreclosure proceedings occur against
a Mortgaged Property, the Depositor shall notify the applicable Servicer and the
Servicer shall record such Assignment of Mortgage at the expense of the related
Originator. If the Assignment of Mortgage is to be recorded, the Mortgage shall
be assigned to "Deutsche Bank National Trust Company, as trustee under the
Pooling and Servicing Agreement dated as of June 1, 2003, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS
Capital I Inc. Trust 2003-HE1". In the event that any such Assignment of
Mortgage is lost or returned unrecorded because of a defect therein, the
Depositor shall promptly cause to be delivered a substitute Assignment of
Mortgage to cure such defect and thereafter cause each such assignment to be
duly recorded.
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee a copy of the Data Tape Information in electronic, machine readable
medium in a form mutually acceptable to the Trustee.
(c) 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 (the "Trust") to be known, for convenience, as "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL
I INC. TRUST 2003-HE1" and Deutsche Bank National Trust Company is hereby
appointed as Trustee in accordance with the provisions of this Agreement.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.
The Trustee shall acknowledge, on the Closing Date, receipt by the
Trustee of the documents identified in the Initial Certification in the form
annexed hereto as Exhibit E, and declares that it holds and will hold such
documents and the other documents delivered to it pursuant to Section 2.01, and
that it holds or will hold such other assets as are included in the Trust Fund,
in trust for the exclusive use and benefit of all present and future
Certificateholders. The Trustee shall maintain possession of the related
Mortgage Notes in the State of California, unless otherwise permitted by the
Rating Agencies.
In connection with the Closing Date, the Trustee shall be required
to deliver via facsimile (with original to follow the next Business Day) to the
Depositor an Initial Certification prior to the Closing Date, or, as the
Depositor agrees to, on the Closing Date, certifying receipt of a Mortgage Note
and Assignment of Mortgage for each Mortgage Loan. The Trustee shall not be
responsible to verify the validity, sufficiency or genuineness of any document
in any Custodial File.
Within 90 days after the Closing Date, the Trustee shall ascertain
that all documents identified in the Document Certification and Exception Report
in the form attached hereto as Exhibit F are in its possession, and shall
deliver to the Depositor a Document Certification and Exception Report, in the
form annexed hereto as Exhibit F, to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as an
exception and not covered by such certification): (i) all documents identified
in the Document Certification and Exception Report and required to be reviewed
by it are in its possession; (ii) such documents have been reviewed by it and
appear regular on their face and relate to such Mortgage Loan; (iii) based on
its examination and only as to the foregoing documents, the information set
forth in items (1), (2), (7) and (9) of the Mortgage Loan Schedule and items
(1), (9) and (17) of the Data Tape Information respecting such Mortgage Loan is
correct; and (iv) each Mortgage Note has been endorsed as provided in Section
2.01 of this Agreement. The Trustee shall not be responsible to verify the
validity, sufficiency or genuineness of any document in any Custodial File.
The Trustee shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The applicable Servicer shall promptly deliver to the Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Custodial File as come into the possession of the
applicable Servicer from time to time.
Section 2.03 Representations and Warranties; Remedies for Breaches
of Representations and Warranties with Respect to the Mortgage Loans.
(a) Chase hereby makes the representations and warranties set forth
in Schedule II hereto to the Depositor and the Trustee, as of the dates set
forth in such schedule, and Provident hereby makes the representations and
warranties set forth in Schedules III and IV hereto to the Depositor and the
Trustee, as of the dates set forth in such schedules.
(b) The Depositor hereby makes the representations and warranties,
set forth in Schedule V hereto, to the Trustee.
(c) It is understood and agreed that the representations and
warranties set forth in this Section 2.03 shall survive the transfer of the
Mortgage Loans by the Depositor to the Trustee, and shall inure to the benefit
of the Trustee and, in the case of Section 2.03(a), the Depositor,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File.
(d) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by any Originator under the related Purchase
Agreement or the related Assignment Agreement, as applicable, or Provident (with
respect to the Aames Mortgage Loans) or the Depositor, as applicable, under this
Agreement; that materially and adversely affects the value of any Mortgage Loan
or the interests of the Trustee or the Certificateholders therein, the party
discovering such breach shall give prompt written notice thereof to the other
parties. Upon receiving written notice of a breach of a representation and
warranty or written notice that a Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the Trustee
shall in turn notify the applicable Originator in writing to correct or cure, in
accordance with the related Purchase Agreement, any such breach of a
representation or warranty made by such Originator under either the related
Purchase Agreement or the related Assignment Agreement, as applicable, within
sixty (60) days from the date of notice from the Trustee or the discovery by
such Originator of the breach, and if such Originator fails or is unable to
correct or cure the defect or breach within such period, the Trustee shall
notify the Depositor of such failure to correct or cure. Unless otherwise
directed by the Depositor within five (5) Business Days after notifying the
Depositor of such failure by any Originator to correct or cure, the Trustee
shall notify such Originator to repurchase the Mortgage Loan at the Repurchase
Price or substitute a Substitute Mortgage Loan for such Mortgage Loan, in each
case, pursuant to the terms of the related Purchase Agreement. Notwithstanding
the foregoing, in the event that the Trustee receives notice of a breach (i) by
Aames of the representations and warranties set forth in clauses (zz)(i),
(zz)(ii), (aaa), (bbb), (ccc) or (ddd) of Section 9.02 of the Aames Purchase
Agreement, (ii) by Accredited of the representations and warranties set forth in
clauses (ww)(ii), (xx), (yy), (aaa), or (eee) of Section 9.02 of the Accredited
Purchase Agreement, (iii) by Provident of the representations and warranties set
forth in clauses (zz), (aaa), (bbb), (ccc) or (ddd) of Section 9.02 of the
Provident Purchase Agreement, or (iv) by New Century of the representations and
warranties set forth in clauses (zz)(y), (zz)(z), (aaa), (bbb), (ccc) or (eee)
of Section 9.02 of the New Century Purchase Agreement, the Trustee shall notify
the related Originator to repurchase the Mortgage Loan at the Repurchase Price
within sixty (60) days of such Originator's receipt of such notice. If, within
ten (10) Business Days of receipt of such notice by such Originator, such
Originator fails to repurchase such Mortgage Loan, the Trustee shall notify the
Depositor of such failure. The Trustee shall pursue all legal remedies available
to the Trustee against such Originator under the related Purchase Agreement if
the Trustee has received written notice from the Depositor directing the Trustee
to pursue such remedies.
(e) In the event any Mortgage Loan does not conform to the
requirements as determined in the Trustee's review of the related Custodial
File, the Trustee shall notify the applicable Originator to correct or cure such
defect as required under the related Purchase Agreement, and if such Originator
fails or is unable to correct or cure the defect within the period set forth in
the related Purchase Agreement, the Trustee shall notify the Depositor of such
failure to correct or cure. Unless otherwise directed by the Depositor within
five (5) Business Days after notifying the Depositor of such failure by the
Originator to correct or cure, the Trustee shall notify such Originator to
repurchase the Mortgage Loan at the Repurchase Price or substitute a Substitute
Mortgage Loan for such Mortgage Loan, in each case, pursuant to the terms of the
related Purchase Agreement. If, within ten (10) Business Days of receipt of such
notice by such Originator, such Originator fails to repurchase such Mortgage
Loan, the Trustee shall notify the Depositor of such failure. The Trustee shall
pursue all legal remedies available to the Trustee against the applicable
Originator under the related Purchase Agreement if the Trustee has received
written notice from the Depositor directing the Trustee to pursue such remedies.
(f) Within 90 days of the earlier of either discovery by or notice
to Provident of any breach of a representation or warranty set forth on Schedule
IV hereto that materially and adversely affects the value of any Mortgage Loan
or the interest of the Trustee or the Certificateholders therein, Provident
shall use its best efforts to promptly cure such breach in all material respects
and, if such defect or breach cannot be remedied, Provident shall, at the
Depositor's option, purchase such Mortgage Loan at the Repurchase Price.
(g) Within 90 days of the earlier of either discovery by or notice
to the Depositor of any breach of a representation or warranty set forth on
Schedule V hereto that materially and adversely affects the value of any
Mortgage Loan or the interest of the Trustee or the Certificateholders therein,
the Depositor shall use its best efforts to promptly cure such breach in all
material respects and, if such defect or breach cannot be remedied, the
Depositor shall purchase such Mortgage Loan at the Repurchase Price or
substitute a Substitute Mortgage Loan for such Mortgage Loan.
(h) Any substitution of a Substitute Mortgage Loan by an Originator
will be made in accordance with the provisions of the related Purchase
Agreement. With respect to any Substitute Mortgage Loan or Loans substituted by
the Depositor, the Depositor shall deliver to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No substitution is permitted to be made in any calendar month
after the Determination Date for such month. Scheduled Payments due with respect
to Substitute Mortgage Loans in the Due Period in which such substitution occurs
shall not be part of the Trust Fund and will be retained by the Depositor or the
applicable Originator, as applicable, on the next succeeding Distribution Date.
For the Due Period in which such substitution occurs, distributions to
Certificateholders on the next succeeding Distribution Date will include the
Scheduled Payment due on any Deleted Mortgage Loan for the Due Date occurring in
such Due Period, to the extent received by the related Determination Date, and
thereafter the Depositor or the applicable Originator, as applicable, shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan.
(i) The applicable Servicer, based upon information provided by the
Depositor or the applicable Originator, shall amend the Mortgage Loan Schedule
for the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans and
such Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee.
Upon such substitution, the Substitute Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, and, if the substitution is made
by the Depositor, the Depositor shall be deemed to have made with respect to
such Substitute Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties made pursuant to Section 2.03(b) with respect to
such Mortgage Loan. Upon any such substitution and the deposit into the related
Collection Account of the amount required to be deposited therein in connection
with such substitution as described in the following paragraph, the Trustee
shall release the Mortgage File held for the benefit of the Certificateholders
relating to such Deleted Mortgage Loan to the Depositor or the applicable
Originator, as applicable, and shall execute and deliver at the direction of the
Depositor or the applicable Originator, as applicable, such instruments of
transfer or assignment prepared by the Depositor or the applicable Originator,
as applicable, of the Depositor in each case without recourse, representation or
warranty as shall be necessary to vest title in the Depositor or the applicable
Originator, as applicable, of the Trustee's interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.
(j) For any month in which the Depositor substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable
Servicer will determine the amount (if any) by which the aggregate unpaid
principal balance of all such Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (after application of the scheduled principal portion of
the Scheduled Payments due in the Due Period of substitution). The amount of
such shortage or the amount of any similar shortage with respect to a Substitute
Mortgage Loan substituted by an Originator under the related Purchase Agreement
(the "Substitution Adjustment Amount") plus, with respect to substitutions by
the Depositor, an amount equal to the aggregate of any unreimbursed Advances
with respect to such Deleted Mortgage Loans shall be deposited into the
applicable Collection Account by the Depositor on or before the Distribution
Account Deposit Date for the Distribution Date immediately following such
substitution.
Any Mortgage Loan repurchased pursuant to this Section 2.03 will be
removed from the Trust Fund. The applicable Servicer shall amend the Mortgage
Loan Schedule for the benefit of the Certificateholders to reflect the removal
of any Mortgage Loan repurchased and such Servicer shall deliver the amended
Mortgage Loan Schedule to the Trustee.
In the event that any Originator, pursuant to either the related
Purchase Agreement or the related Assignment Agreement, as applicable, or
Provident or the Depositor, as applicable, pursuant to this Agreement, shall
have repurchased a Mortgage Loan, the Repurchase Price therefor shall be
deposited in the applicable Collection Account pursuant to Section 3.10 on or
before the next Distribution Account Deposit Date and upon such deposit of the
Repurchase Price and receipt of a Request for Release in the form of Exhibit J
hereto, the Trustee shall release the related Custodial File held for the
benefit of the Certificateholders to such Person as directed by the applicable
Servicer, and the Trustee shall execute and deliver at such Person's direction
such instruments of transfer or assignment prepared by such Person, in each case
without recourse, as shall be necessary to transfer title from the Trustee.
It is understood and agreed that the obligation of any Originator
under the related Purchase Agreement or the related Assignment Agreement, as
applicable, or of Provident or the Depositor, as applicable, under this
Agreement, to cure, repurchase or replace any Mortgage Loan as to which a breach
has occurred and is continuing, together with any related indemnification
obligations, shall constitute the sole remedies against such Persons respecting
such breach available to Certificateholders, the Depositor, or the Trustee on
their behalf.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Trustee for the benefit of the
Certificateholders.
Section 2.04 The Depositor and the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the date hereof or such other date set forth
herein that as of the Closing Date, and immediately prior to the transfer of the
Mortgage Loans by it to the Trust, the Depositor had good title to the Mortgage
Loans, free and clear of any liens, charges, claims or encumbrances whatsoever.
The Depositor hereby assigns, transfers and conveys to the Trustee
all of its rights with respect to the Mortgage Loans.
Section 2.05 Delivery of Opinion of Counselin Connection with
Substitutions.
Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.03 shall be made more than 30 days after the
Closing Date unless the related Originator (pursuant to the terms of the
applicable Purchase Agreement) or the Depositor delivers to the Trustee an
Opinion of Counsel, which Opinion of Counsel shall not be at the expense of
either the Trustee or the Trust Fund, addressed to the Trustee, to the effect
that such substitution will not (i) result in the imposition of the tax on
"prohibited transactions" on either the Lower Tier REMIC or Upper Tier REMIC or
contributions after the Startup Date, as defined in Sections 860F(a)(2) and
860G(d) of the Code, respectively, or (ii) cause either the Lower Tier REMIC or
Upper Tier REMIC to fail to qualify as a REMIC at any time that any Certificates
are outstanding.
Section 2.06 Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates.
Section 2.07 REMIC Matters.
The Preliminary Statement sets forth the designations for federal
income tax purposes of all interests created hereby. The "Startup Day" for
purposes of the REMIC Provisions shall be the Closing Date. The "latest possible
maturity date" is the Distribution Date occurring in May 2033 which is the
Distribution Date following the latest Mortgage Loan maturity date.
Section 2.08 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the
Trustee and the Servicers 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
Servicers and the Trustee, 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;
(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 on the Closing Date, 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 10.04 hereof.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.08 shall survive delivery of the
respective Custodial Files to the Trustee and shall inure to the benefit of the
Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans.
(a) For and on behalf of the Certificateholders, each Servicer shall
service and administer the Mortgage Loans in accordance with the terms of this
Agreement and the respective Mortgage Loans and, to the extent consistent with
such terms, in the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to customary and
usual standards of practice of mortgage lenders and loan servicers administering
similar mortgage loans but without regard to:
(i) any relationship that such Servicer, any Subservicer or any
Affiliate of such Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by such
Servicer or any Affiliate of such Servicer;
(iii) such Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) such Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Subservicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with Accepted Servicing Practices, to execute and deliver any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee. The Servicer shall service and administer the Mortgage Loans in
accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The Servicer
shall also comply in the performance of this Agreement with all reasonable rules
and requirements of each insurer under any standard hazard insurance policy.
Subject to Section 3.16, the Trustee shall execute, at the written request of
the Servicer, and furnish to the Servicer and any Subservicer such documents
provided to the Trustee as are necessary or appropriate to enable the Servicer
or any Subservicer to carry out their servicing and administrative duties
hereunder, and the Trustee hereby grants to the Servicer, and this Agreement
shall constitute, a power of attorney to carry out such duties including a power
of attorney to take title to Mortgaged Properties after foreclosure on behalf of
the Trustee. The Trustee shall execute a separate power of attorney in favor of
the Servicer for the purposes described herein to the extent necessary or
desirable to enable the Servicer to perform its duties hereunder. The Trustee
shall not be liable for the actions of the Servicer or any Subservicers under
such powers of attorney. Notwithstanding anything contained herein to the
contrary, no Servicer or Subservicer shall without the Trustee's consent: (i)
initiate any action, suit or proceeding solely under the Trustee's name without
indicating such Servicer's or Subservicer's, as applicable, representative
capacity, or (ii) take any action with the intent to, or which actually does
cause, the Trustee to be registered to do business in any state.
(b) Subject to Section 3.09(b) hereof, in accordance with the
standards of the preceding paragraph, the Servicer shall advance or cause to be
advanced funds as necessary for the purpose of effecting the timely payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09(b), and further as provided in
Section 3.11. Any cost incurred by such Servicer or by Subservicers in effecting
the timely payment of taxes and assessments on a Mortgaged Property shall not be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the principal balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan (except for a reduction of interest payments resulting from the
application of the Soldiers' and Sailors' Relief Act of 1940, as amended, or any
similar state statutes) or (ii) permit any modification, waiver or amendment of
any term of any Mortgage Loan that would both (A) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or final,
temporary or proposed Treasury regulations promulgated thereunder) and (B) cause
either the Upper Tier REMIC or the Lower Tier REMIC to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions after the startup date" under the REMIC Provisions, or (iii)
except as provided in Section 3.07(a), waive any Prepayment Charges.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release such
Servicer from the responsibilities or liabilities arising under this Agreement.
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers.
(a) Each Servicer may enter into subservicing agreements with
subservicers (each, a "Subservicer"), for the servicing and administration of
the Mortgage Loans ("Subservicing Agreements"). The applicable Servicer shall,
within a reasonable period of time, give notice to the Trustee of any such
Subservicing Agreement. The Trustee shall not be required to review or consent
to such Subservicing Agreements and shall have no liability in connection
therewith.
Each Subservicer shall be (i) authorized to transact business in the
state or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
Each Servicer will examine each Subservicing Agreement and will be familiar with
the terms thereof. The terms of any Subservicing Agreement will not be
inconsistent with any of the provisions of this Agreement. Each Servicer and the
respective Subservicers may enter into and make amendments to the Subservicing
Agreements or enter into different forms of Subservicing Agreements; provided,
however, that any such amendments or different forms shall be consistent with
and not violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Trustee, without the consent of
the Trustee. Any variation without the consent of the Trustee from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to such Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. Each Servicer shall deliver to the
Trustee and the Depositor copies of all Subservicing Agreements, and any
amendments or modifications thereof, promptly upon such Servicer's execution and
delivery of such instruments.
(b) As part of its servicing activities hereunder, each Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement to which such Servicer is a party, including,
without limitation, any obligation to make advances in respect of delinquent
payments as required by a Subservicing Agreement. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Subservicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as such Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. Each Servicer shall pay the costs of such enforcement at its own expense,
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 3.03 Successor Subservicers.
Each Servicer shall be entitled to terminate any Subservicing
Agreement to which such Servicer is a party and the rights and obligations of
any Subservicer pursuant to any Subservicing Agreement in accordance with the
terms and conditions of such Subservicing Agreement. In the event of termination
of any Subservicer, all servicing obligations of such Subservicer shall be
assumed simultaneously by the Servicer party to the related Subservicing
Agreement without any act or deed on the part of such Subservicer or such
Servicer, and such Servicer either shall service directly the related Mortgage
Loans or shall enter into a Subservicing Agreement with a successor Subservicer
which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer party to the related Subservicing Agreement shall, for any reason, no
longer be a Servicer (including termination due to an Event of Default).
Section 3.04 Liability of the Servicers.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between a Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
such Servicer shall remain obligated and primarily liable to the Trustee for the
servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 3.01 without diminution of such obligation or liability by
virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if such Servicer alone were servicing and administering
such Mortgage Loans. Each Servicer shall be entitled to enter into any agreement
with a Subservicer for indemnification of such Servicer by such Subservicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
related Servicer alone, and the Trustee (or any successor to such Servicer)
shall not be deemed a party thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as set
forth in Section 3.06. Each Servicer shall be solely liable for all fees owed by
it to any Subservicer, irrespective of whether such Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee.
In the event a Servicer at any time shall for any reason no longer
be a Servicer (including by reason of the occurrence of an Event of Default),
the Trustee, or its designee, or the successor Servicer if the successor is not
the Trustee, shall thereupon assume all of the rights and obligations of such
Servicer under each Subservicing Agreement that such Servicer may have entered
into, with copies thereof provided to the Trustee, or the successor Servicer if
the successor is not the Trustee, prior to the Trustee, or the successor
Servicer if the successor is not the Trustee, assuming such rights and
obligations, unless the Trustee elects to terminate any Subservicing Agreement
in accordance with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of such
Servicer's interest therein and to have replaced such Servicer as a party to
each Subservicing Agreement to the same extent as if each Subservicing Agreement
had been assigned to the assuming party, except that (i) such Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be a Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor to such Servicer shall
be deemed to have assumed any liability or obligation of such Servicer that
arose before it ceased to be a Servicer.
Such Servicer at its expense shall, upon request of the Trustee, its
designee or the successor Servicer deliver to the assuming party all documents
and records relating to each Subservicing Agreement and the Mortgage Loans then
being serviced by it and an accounting of amounts collected and held by or on
behalf of it, and otherwise use its best efforts to effect the orderly and
efficient transfer of the Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments.
(a) Each Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any applicable Insurance Policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing and Accepted Servicing Practices, the Servicer may (i) waive any
late payment charge or, if applicable, any penalty interest, or (ii) extend the
due dates for the Scheduled Payments due on a Mortgage Note for a period of not
greater than 180 days; provided that any extension pursuant to clause (ii) above
shall not affect the amortization schedule of any Mortgage Loan for purposes of
any computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.01
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, subject to Section 4.01(d)
pursuant to which the Servicer shall not be required to make any such advances
that are Nonrecoverable P&I Advances. Notwithstanding the foregoing, the
Servicer may waive, in whole or in part, a Prepayment Charge only under the
following circumstances: (i) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Servicer,
maximize recovery of total proceeds taking into account the value of such
Prepayment Charge and the related Mortgage Loan or (ii) such Prepayment Charge
is not permitted to be collected by applicable law. If a Prepayment Charge is
waived other than as permitted by the prior sentence, then the applicable
Servicer is required to pay the amount of such waived Prepayment Charge, for the
benefit of the Holders of the Class P Certificates, by depositing such amount
into the related Collection Account together with and at the time that the
amount prepaid on the related Mortgage Loan is required to be deposited into the
Collection Account; provided, however, that the applicable Servicer shall not
have an obligation to pay the amount of any uncollected Prepayment Charge if the
failure to collect such amount is the direct result of inaccurate or incomplete
information on the Mortgage Loan Schedule in effect at such time.
(b) (i) The Trustee shall establish and maintain the Excess Reserve
Fund Account, on behalf of the Class X Certificateholders, to receive any Basis
Risk Payment and any Interest Rate Cap Payment and to secure their limited
recourse obligation to pay to the LIBOR Certificateholders Basis Risk
CarryForward Amounts.
(ii) On each Distribution Date, the Trustee shall deposit the amount
of any Basis Risk Payment and any Interest Rate Cap Payment for such date
into the Excess Reserve Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis Risk
CarryForward Amount on any Class of Certificates, the Trustee shall (1) withdraw
from the Distribution Account and deposit in the Excess Reserve Fund Account, as
set forth in Section 4.02(a)(iii)(M), the lesser of (x) the Class X
Distributable Amount (without regard to the reduction in the definition thereof
with respect to the Basis Risk Payment) (to the extent remaining after the
distributions specified in Sections 4.02(a)(iii)(A)-(L)) and (y) the aggregate
Basis Risk CarryForward Amounts for such Distribution Date and (2) withdraw from
the Excess Reserve Fund Account amounts necessary to pay to such Class or
Classes of Certificates the Basis Risk CarryForward Amount. Such payments shall
be allocated to those Classes on a pro rata basis based upon the amount of Basis
Risk CarryForward Amount owed to each such Class and shall be paid in the
priority set forth in Sections 4.02(a)(iii)(N)-(O) hereof.
(ii) The Trustee shall account for the Excess Reserve Fund Account
as an asset of a grantor trust under subpart E, Part I of the subchapter J
of the Code and not an asset of any REMIC created pursuant to this
Agreement. The beneficial owners of the Excess Reserve Fund Account are
the Class X Certificateholders. For all federal tax purposes, amounts
transferred by the Upper Tier REMIC to the Excess Reserve Fund Account
shall be treated as distributions by the Trustee to the Class X
Certificateholders.
(iii) Any Basis Risk CarryForward Amounts paid by the Trustee to the
LIBOR Certificateholders shall be accounted for by the Trustee as amounts
paid first to the Holders of the Class X Certificates and then to the
respective Class or Classes of LIBOR Certificates. In addition, the
Trustee shall account for the LIBOR Certificateholders' rights to receive
payments of Basis Risk CarryForward Amounts as rights in a limited
recourse interest rate cap contract written by the Class X
Certificateholders in favor of the LIBOR Certificateholders.
(iv) Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess Reserve
Fund Account except as expressly set forth in this Section 3.07(c).
(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicers to the Trustee
pursuant to Section 3.11;
(ii) any amount deposited by the Servicers pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that a Servicer shall remit any amount not required to
be remitted, it may at any time direct the Trustee in writing to withdraw such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 4.02.
(e) The Trustee may (but is not obligated to) invest the funds in
the Distribution Account, in one or more Permitted Investments, in accordance
with Section 3.12. The Trustee shall be entitled to withdraw from the
Distribution Account any income or gain earned on such funds deposited therein
for its own benefit.
(f) Each Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed change of the location of the
Collection Account within a reasonable period of time prior to any change
thereof.
Section 3.08 Subservicing Accounts.
In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Subservicer will be required to
establish and maintain one or more accounts (collectively, the "Subservicing
Account"). The Subservicing Account shall be an Eligible Account and shall
otherwise be acceptable to the related Servicer. The Subservicer shall deposit
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Subservicer's receipt thereof, all proceeds
of Mortgage Loans received by the Subservicer less its servicing compensation to
the extent permitted by the Subservicing Agreement, and shall thereafter deposit
such amounts in the Subservicing Account, in no event more than two Business
Days after the deposit of such funds into the clearing account. The Subservicer
shall thereafter deposit such proceeds in the Collection Account of the related
Servicer or remit such proceeds to the related Servicer for deposit in the
Collection Account of the related Servicer not later than two Business Days
after the deposit of such amounts in the Subservicing Account. For purposes of
this Agreement, such Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
(a) The Servicer shall enforce the obligations under each
paid-in-full, life-of-the-loan tax service contract in effect with respect to
each Mortgage Loan (each, a "Tax Service Contract"). Each Tax Service Contract
shall be assigned to the Trustee, or a successor Servicer at the applicable
Servicer's expense in the event that a Servicer is terminated as Servicer of the
related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) hereof, the Servicer undertakes to perform such functions. The
Servicer shall establish and maintain, or cause to be established and
maintained, one or more accounts (the "Escrow Accounts"), which shall be
Eligible Accounts. The Servicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer's receipt thereof, all collections from the Mortgagors (or related
advances from Subservicers) for the payment of taxes, assessments, hazard
insurance premiums and comparable items for the account of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the Servicer (or a Subservicer to
the extent provided in the related Subservicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay interest, if required and as described below, to Mortgagors on balances in
the Escrow Account; (v) clear and terminate the Escrow Account at the
termination of the Servicer's obligations and responsibilities in respect of the
Mortgage Loans under this Agreement or (vi) recover amounts deposited in error.
As part of its servicing duties, the Servicer or Subservicers shall pay to the
Mortgagors interest on funds in Escrow Accounts, to the extent required by law
and, to the extent that interest earned on funds in the Escrow Accounts is
insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Servicer shall determine whether any such payments are made
by the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The Servicer
assumes full responsibility for the payment of all such bills within such time
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments; provided,
however, that such advances are deemed to be Servicing Advances.
Section 3.10 Collection Accounts.
(a) On behalf of the Trustee, each Servicer shall establish and
maintain, or cause to be established and maintained, one or more Eligible
Accounts (each such account or accounts, a "Collection Account"), held in trust
for the benefit of the Trustee. On behalf of the Trustee, each Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after such Servicer's
receipt thereof, and shall thereafter deposit in the related Collection Account,
in no event more than two Business Days after the deposit of such funds into the
clearing account, as and when received or as otherwise required hereunder, the
following payments and collections received or made by it subsequent to the
Cut-off Date (other than in respect of principal or interest on the related
Mortgage Loans due on or before the Cut-off Date), or payments (other than
Principal Prepayments) received by it on or prior to the related Cut-off Date
but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with prudent and customary servicing practices and Liquidation
Proceeds;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the related Collection Account;
(v) any amounts required to be deposited by such Servicer pursuant
to the second paragraph of Section 3.13(a) in respect of any blanket
policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Charges collected by such Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by each Servicer in the related Collection Account and shall,
upon collection, belong to the applicable Servicer as additional compensation
for its servicing activities. In the event a Servicer shall deposit in the
related Collection Account any amount not required to be deposited therein, it
may at any time withdraw such amount from its Collection Account, any provision
herein to the contrary notwithstanding.
(b) Funds in the Collection Accounts may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. Each
Servicer shall give notice to the Trustee and the Depositor of the location of
the related Collection Account maintained by it when established and prior to
any change thereof.
Section 3.11 Withdrawals from the Collection Accounts.
(a) Each Servicer shall, from time to time, make withdrawals from
the related Collection Account for any of the following purposes or as described
in Section 4.01:
(i) on or prior to the Remittance Date, to remit to the Trustee (i)
the Trustee Fee with respect to such Distribution Date and (ii) all
Available Funds in respect of the related Distribution Date together with
all amounts representing Prepayment Charges from the Mortgage Loans
received during the related Prepayment Period;
(ii) to reimburse such Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01;
(iii) to pay such Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Late Collections,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds or other
amounts as may be collected by such Servicer from a Mortgagor, or
otherwise received with respect to such Mortgage Loan (or the related REO
Property);
(iv) to pay to such Servicer as servicing compensation (in addition
to the Servicing Fee) on the Remittance Date any interest or investment
income earned on funds deposited in its Collection Account;
(v) to pay to an Originator, the Depositor or Provident as
applicable, with respect to each Mortgage Loan that has previously been
repurchased or replaced pursuant to the applicable Purchase Agreement, the
applicable Assignment Agreement or this Agreement, respectively, all
amounts received thereon subsequent to the date of purchase or
substitution, as further described herein;
(vi) to reimburse such Servicer for any P&I Advance or Servicing
Advance previously made which such Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01;
(vii) to pay, or to reimburse such Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant to
Section 3.15;
(viii) to reimburse such Servicer or the Depositor for expenses
incurred by or reimbursable to such Servicer or the Depositor, as the case
may be, pursuant to Section 6.03;
(ix) to reimburse such Servicer or the Trustee, as the case may be,
for expenses reasonably incurred in respect of the breach or defect giving
rise to the repurchase obligation of an Originator, the Depositor or
Provident, as applicable, that were included in the Repurchase Price of
the Mortgage Loan, including any expenses arising out of the enforcement
of the repurchase obligation, to the extent not otherwise paid pursuant to
the terms hereof;
(x) to withdraw any amounts deposited in the related Collection
Account in error;
(xi) to withdraw any amounts held in the related Collection Account
and not required to be remitted to the Trustee on the Remittance Date
occurring in the month in which such amounts are deposited into such
Collection Account, to reimburse such Servicer for ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇
Advances; and
(xii) to clear and terminate the related Collection Account upon
termination of this Agreement;
(b) Each Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from its Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix)
above. Each Servicer shall provide written notification (as set forth in Section
4.01(d) hereof) to the Depositor, on or prior to the next succeeding Remittance
Date, upon making any withdrawals from the related Collection Account pursuant
to subclause (a)(vii) above.
Section 3.12 Investment of Funds in the Accounts.
(a) Each Servicer may invest the funds in the related Collection
Account and the Trustee may (but is not obligated to) invest funds in the
Distribution Account (for purposes of this Section 3.12, such Accounts are
referred to as an "Investment Account"), in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand
no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement.
All such Permitted Investments shall be held to maturity, unless payable on
demand. Any investment of funds in an Investment Account shall be made in the
name of the Trustee. The Trustee shall be entitled to sole possession (except
with respect to investment direction of funds and any income and gain realized
thereon over each such investment, and any certificate or other instrument
evidencing any such investment shall be delivered directly to the Trustee or its
agent, together with any document of transfer necessary to transfer title to
such investment to the Trustee. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Trustee may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the related Collection Account held by or on behalf of the related
Servicer, shall be for the benefit of such Servicer and shall be subject to its
withdrawal in the manner set forth in Section 3.11. Such Servicer shall deposit
in its Collection Account, the amount of any loss of principal incurred in
respect of any such Permitted Investment made with funds in such accounts
immediately upon realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Trustee, shall be for the
benefit of the Trustee and shall be subject to the Trustee's withdrawal in the
manner set forth in Section 3.07(e). The Trustee shall deposit in the
Distribution Account the amount of any loss of principal incurred in respect of
any such Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee shall take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings.
(e) The Trustee shall not be liable for the amount of any loss
incurred with respect of any investment or lack of investment of funds held in
any Investment Account or the Distribution Account if made in accordance with
this Section 3.12.
(f) The Trustee or its Affiliates shall be permitted to receive
additional compensation that could be deemed to be in the Trustee's economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments. Such compensation shall not be considered an amount that is
reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.
(a) Each Servicer shall cause to be maintained for each Mortgage
Loan fire insurance with extended coverage on the related Mortgaged Property in
an amount which is at least equal to the least of (i) the current principal
balance of such Mortgage Loan, (ii) the amount necessary to fully compensate for
any damage or loss to the improvements that are a part of such property on a
replacement cost basis and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. Each Servicer shall
also cause to be maintained fire insurance with extended coverage on each REO
Property in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property, plus accrued interest at the Mortgage Rate and related
Servicing Advances. Each Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by any Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that such Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the related
Collection Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by any Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Trustee, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards and
flood insurance has been made available, the applicable Servicer will cause to
be maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that any Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of A:X or better in Best's
(or such other rating that is comparable to such rating) insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case such Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the related Collection Account from its own funds the amount not
otherwise payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, each Servicer agrees to prepare and present, on behalf of itself, the
Trustee claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) Each Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of such Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of the
Mortgage Loans, unless such Servicer has obtained a waiver of such requirements
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Each Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac, unless such Servicer has obtained a waiver of such requirements
from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Servicer shall provide the Trustee upon
request with copies of any such insurance policies and fidelity bond. Each
Servicer shall be deemed to have complied with this provision if an Affiliate of
applicable Servicer has such errors and omissions and fidelity bond coverage
and, by the terms of such insurance policy or fidelity bond, the coverage
afforded thereunder extends to such Servicer. Any such errors and omissions
policy and fidelity bond shall by its terms not be cancelable without thirty
days' prior written notice to the Trustee. Each Servicer shall also cause each
Subservicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.
Section 3.14 Enforcement of Due-On-Sale Clauses Assumption
Agreements.
Each Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that no
Servicer shall be required to take such action if, in its sole business
judgment, a Servicer believes it is not in the best interests of the Trust Fund
and shall not exercise any such rights if prohibited by law from doing so. If a
Servicer reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause or if any of the other conditions set forth in the proviso
to the preceding sentence apply, such Servicer will enter into an assumption and
modification agreement from or with the person to whom such property has been
conveyed or is proposed to be conveyed, pursuant to which such person becomes
liable under the Mortgage Note and, to the extent permitted by applicable state
law, the Mortgagor remains liable thereon. Each Servicer is also authorized to
enter into a substitution of liability agreement with such person, pursuant to
which the original Mortgagor is released from liability and such person is
substituted as the Mortgagor and becomes liable under the Mortgage Note;
provided, that no such substitution shall be effective unless such person
satisfies the underwriting criteria of such Servicer, has a credit risk rating
at least equal to that of the original Mortgagor. In connection with any
assumption, modification or substitution, such Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. No Servicer shall take or enter into
any assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by a Servicer in respect of an assumption or substitution of
liability agreement will be retained by such Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Rate and the
amount of the Scheduled Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. Each Servicer shall notify the Trustee
that any such substitution, modification or assumption agreement has been
completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, a 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 by operation of law or by the terms of the Mortgage Note or any
assumption which such Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans.
Each Servicer shall use its best efforts, consistent with customary
servicing practices as described in Section 3.01, to foreclose upon or otherwise
comparably convert (which may include an acquisition of REO Property) the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.07, and which are not
released from this Agreement pursuant to any other provision hereof. Each
Servicer shall use reasonable efforts to realize upon such defaulted Mortgage
Loans in such manner as will maximize the receipt of principal and interest by
the Trustee, taking into account, among other things, the timing of foreclosure
proceedings. The foregoing is subject to the provisions that, in any case in
which Mortgaged Property shall have suffered damage from an uninsured cause, a
Servicer shall not be required to expend its own funds toward the restoration of
such property unless it shall determine in its sole discretion (i) that such
restoration will increase the net proceeds of liquidation of the related
Mortgage Loan to the Trustee, after reimbursement to itself for such expenses,
and (ii) that such expenses will be recoverable by such Servicer through
Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds from the
related Mortgaged Property, as contemplated in Section 3.11. Each Servicer shall
be responsible for all other costs and expenses incurred by it in any such
proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the related property, as contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds or any income from an REO Property, will be
applied in the following order of priority: first, to reimburse the Servicers or
any Subservicer for any related unreimbursed Servicing Advances, pursuant to
Section 3.11 or 3.17; second, to accrued and unpaid interest on the Mortgage
Loan or REO Imputed Interest, at the Mortgage Rate, to the date of the
liquidation or REO Disposition, or to the Due Date prior to the Remittance Date
on which such amounts are to be distributed if not in connection with a
liquidation or REO Disposition; third, to reimburse any Servicer for any related
▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances, pursuant to Section 3.11; and fourth, as a recovery
of principal of the Mortgage Loan. If the amount of the recovery so allocated to
interest is less than a full recovery thereof, that amount will be allocated as
follows: first, to unpaid Servicing Fees; and second, as interest at the
Mortgage Rate (net of the Servicing Fee Rate). The portion of the recovery so
allocated to unpaid Servicing Fees shall be reimbursed to the applicable
Servicer or any Subservicer pursuant to Section 3.11 or 3.17. The portions of
the recovery so allocated to interest at the Mortgage Rate (net of the Servicing
Fee Rate) and to principal of the Mortgage Loan shall be applied as follows:
first, to reimburse the Servicers or any Subservicer for any related
unreimbursed Servicing Advances in accordance with Section 3.11 or 3.17, and
second, to the Trustee in accordance with the provisions of Section 4.02,
subject to the last paragraph of Section 3.17 with respect to certain excess
recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event a Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, such Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, such
Servicer shall promptly provide the Trustee and the Depositor with a written
report of the environmental inspection.
After reviewing the environmental inspection report, the Depositor
shall determine how the applicable Servicer shall proceed with respect to the
Mortgaged Property. In the event (a) the environmental inspection report
indicates that the Mortgaged Property is contaminated by hazardous or toxic
substances or wastes and (b) the Depositor directs such Servicer to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, such Servicer shall
be reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean-up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse such Servicer, such
Servicer shall be entitled to be reimbursed from amounts in the Collection
Account pursuant to Section 3.11 hereof. In the event the Depositor directs a
Servicer not to proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, such Servicer shall be reimbursed from general collections for all
Servicing Advances made with respect to the related Mortgaged Property from the
Collection Account pursuant to Section 3.11 hereof.
Section 3.16 Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
a Servicer of a notification that payment in full shall be escrowed in a manner
customary for such purposes, such Servicer will, on or before the last day of
the month in which such payment in full occurs, notify the Trustee by a
certification (which certification shall include a statement to the effect that
all amounts received or to be received in connection with such payment which are
required to be deposited in the related Collection Account pursuant to Section
3.10 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Custodial File by submitting a Request for Release to the
Trustee. Upon receipt of such certification and Request for Release, the Trustee
shall promptly release the related Custodial File to such Servicer within two
(2) Business Days. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the related
Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee shall, upon
request of such Servicer and delivery to the Trustee, of a Request for Release,
release the related Custodial File to such Servicer, and the Trustee shall, at
the direction of such Servicer, execute such documents as shall be necessary to
the prosecution of any such proceedings and such Servicer shall retain the
Mortgage File in trust for the benefit of the Trustee. Such Request for Release
shall obligate the applicable Servicer to return each and every document
previously requested from the Custodial File to the Trustee when the need
therefor by such Servicer no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the related Collection Account or the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and such Servicer has delivered to the Trustee a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the related Collection Account have been so
deposited, or that such Mortgage Loan has become an REO Property, a copy of the
Request for Release shall be released by the Trustee to the applicable Servicer
or its designee upon request therefor. Upon receipt of a Request for Release
under this Section 3.16, the Trustee shall deliver the related Custodial File to
the requesting Servicer by regular mail, unless such Servicer requests that the
Trustee deliver such Custodial File to such Servicer by overnight courier (in
which case such delivery shall be at such Servicer's expense).
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to any Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to such Servicer a power of attorney
sufficient to authorize such Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the
account of the Trustee and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from the Trustee pursuant to
any provision hereof. In the event that title to any such REO Property is
acquired, the applicable Servicer shall cause the deed or certificate of sale to
be issued in the name of the Trustee, on behalf of the Certificateholders. Upon
written request by the applicable Servicer, the Trustee shall provide such
Servicer with a power of attorney prepared by such Servicer with respect to such
REO Property.
(b) Each Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. Each Servicer, either itself or through an agent selected by such
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. Each Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
such Servicer deems to be in the best interest of the Trustee. Each Servicer
shall notify the Trustee from time to time as to the status of each REO
Property. The Trustee shall have no obligations with respect to any REO
Dispositions.
(c) [Reserved.]
(d) Each Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
related Collection Account.
(e) Each Servicer shall deposit net of reimbursement to such
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11 hereof, or cause to be deposited, on a daily basis
in the Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(f) Each Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(g) Any net proceeds from an REO Disposition which are in excess of
the unpaid principal balance of the related Mortgage Loan, plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition shall be
retained by the applicable Servicer as additional servicing compensation.
(h) Each Servicer shall use its reasonable best efforts to sell, or
cause the Subservicer to sell, in accordance with Accepted Servicing Practices,
any REO Property as soon as possible, but in no event later than the conclusion
of the third calendar year beginning after the year of its acquisition by the
Lower Tier REMIC unless (i) such Servicer applies for an extension of such
period from the Internal Revenue Service pursuant to the REMIC Provisions and
Code Section 856(e)(3), in which event such REO Property shall be sold within
the applicable extension period, or (ii) such Servicer obtains for the Trustee
an Opinion of Counsel, addressed to the Depositor, the Trustee and such
Servicer, to the effect that the holding by the Lower Tier REMIC of such REO
Property subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause the
Lower Tier REMIC or Upper Tier REMIC to fail to qualify as a REMIC under the
REMIC Provisions or comparable provisions of relevant state laws at any time.
Each Servicer shall manage, conserve, protect and operate each REO Property for
the Trustee solely for the purpose of its prompt disposition and sale in a
manner which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) or result in the receipt by
the Lower Tier REMIC of any "income from non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or any "net income from foreclosure
property" which is subject to taxation under Section 860G(a)(1) of the Code.
Pursuant to its efforts to sell such REO Property, each Servicer shall either
itself or through an agent selected by such Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Trustee on behalf of the
Certificateholders, rent the same, or any part thereof, as such Servicer deems
to be in the best interest of the Trustee on behalf of the Certificateholders
for the period prior to the sale of such REO Property; provided, however, that
any rent received or accrued with respect to such REO Property qualifies as
"rents from real property" as defined in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments.
With respect to each Mortgage Loan, such Servicer shall adjust the
Mortgage Rate on the related interest rate Adjustment Date and shall adjust the
Scheduled Payment on the related mortgage payment adjustment date, if
applicable, in compliance with the requirements of applicable law and the
related Mortgage and Mortgage Note. Each Servicer shall execute and deliver any
and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Rate and Scheduled
Payment adjustments. Each Servicer shall promptly, upon written request
therefor, deliver to the Trustee such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by a Servicer or the receipt of
notice from the Trustee that a Servicer has failed to adjust a Mortgage Rate or
Scheduled Payment in accordance with the terms of the related Mortgage Note,
such Servicer shall deposit in the related Collection Account from its own funds
the amount of any interest loss caused as such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The applicable Servicer shall provide, or cause the Subservicer to
provide, to the Depositor, the Trustee, the OTS or the FDIC and the examiners
and supervisory agents thereof access to the documentation regarding the
Mortgage Loans in its possession required by applicable regulations of the OTS.
Such access shall be afforded without charge, but only upon reasonable and prior
written request and during normal business hours at the offices of the
applicable Servicer, the Depositor, the Trustee or any Subservicer. Nothing in
this Section shall derogate from the obligation of any such party to observe any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of any such party to provide access as provided in this Section
as a result of such obligation shall not constitute a breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee.
Each Servicer shall account fully to the Trustee for any funds
received by such Servicer or which otherwise are collected by such Servicer as
Liquidation Proceeds, Condemnation Proceeds or Insurance Proceeds in respect of
any Mortgage Loan. All Mortgage Files and funds collected or held by, or under
the control of, a Servicer in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds,
including, but not limited to, any funds on deposit in its Collection Account,
shall be held by such Servicer for and on behalf of the Trustee and shall be and
remain the sole and exclusive property of the Trustee, subject to the applicable
provisions of this Agreement. Each Servicer also agrees that it shall not
create, incur or subject any Mortgage File or any funds that are deposited in
the Collection Account, the Distribution Account or any Escrow Account, or any
funds that otherwise are or may become due or payable to the Trustee for the
benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of setoff against any Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan, except, however,
that such Servicer shall be entitled to set off against and deduct from any such
funds any amounts that are properly due and payable to such Servicer under this
Agreement.
Section 3.21 Servicing Compensation.
(a) As compensation for its activities hereunder, each Servicer
shall, with respect to each Mortgage Loan, be entitled to retain from deposits
to its Collection Account and from Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds and REO Proceeds related to such Mortgage Loan, the Servicing
Fee with respect to each Mortgage Loan (less any portion of such amounts
retained by any Subservicer). In addition, each Servicer shall be entitled to
recover unpaid Servicing Fees out of related late collections to the extent
permitted in Section 3.11. The right to receive the Servicing Fee may not be
transferred in whole or in part except in connection with the transfer of all of
either a Servicer's responsibilities and obligations under this Agreement;
provided, however, that each Servicer may pay from the Servicing Fee any amounts
due to a Subservicer pursuant to a Subservicing Agreement entered into under
Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by a
Servicer only to the extent such fees or charges are received by such Servicer.
Each Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to withdraw
from the related Collection Account, as additional servicing compensation,
interest or other income earned on deposits therein.
(c) Each Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by such Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance.
Each Servicer will deliver or cause to be delivered to the
Depositor, the Rating Agencies and the Trustee on or before March 1st of each
calendar year, commencing in 2004, an Officer's Certificate stating, as to each
signatory thereof, that (i) a review of the activities of such Servicer during
the preceding calendar year and of performance under this Agreement or a similar
agreement has been made under such officers' supervision, and (ii) to the best
of such officers' knowledge, based on such review, such Servicer has fulfilled
all of its obligations under this Agreement throughout such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officers and the nature and status thereof. Promptly
after receipt of such Officer's Certificate, the Depositor shall review such
Officer's Certificate and, if applicable, consult with applicable Servicer as to
the nature of any defaults by such Servicer in the fulfillment of any of such
Servicer's obligations.
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
Not later than March 1st of each calendar year commencing in 2004,
each Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Depositor, each
Servicer, the Rating Agencies and the Trustee a report stating that (i) it has
obtained a letter of representation regarding certain matters from the
management of such Servicer which includes an assertion that such Servicer has
complied with certain minimum residential mortgage loan servicing standards,
identified in the Uniform Single Attestation Program for Mortgage Bankers
established by the Mortgage Bankers Association of America, with respect to the
servicing of residential mortgage loans during the most recently completed
fiscal year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all material
respects, subject to such exceptions and other qualifications that may be
appropriate. In rendering its report such firm may rely, as to matters relating
to the direct servicing of residential mortgage loans by Subservicers, upon
comparable reports of firms of independent certified public accountants rendered
on the basis of examinations conducted in accordance with the same standards
(rendered within one year of such report) with respect to those Subservicers.
Promptly after receipt of such report, the Depositor shall review such report
and, if applicable, consult with the applicable Servicer as to the nature of any
defaults by such Servicer in the fulfillment of any of such Servicer's
obligations.
Section 3.24 Trustee to Act as Servicer.
Subject to Section 7.02, in the event that either Servicer shall for
any reason no longer be a Servicer hereunder (including by reason of an Event of
Default), the Trustee or its successor shall thereupon assume all of the rights
and obligations of such Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of such predecessor Servicer pursuant
to Section 3.10 or any acts or omissions of such predecessor Servicer
hereunder), (ii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including but not limited to repurchases or
substitutions pursuant to Section 2.03, (iii) responsible for expenses of such
predecessor Servicer pursuant to Section 2.03 or (iv) deemed to have made any
representations and warranties of such Servicer hereunder. Any such assumption
shall be subject to Section 7.02.
Every Subservicing Agreement entered into by a Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
If either Servicer shall for any reason no longer be a Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
such Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a Subservicing Agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of such Servicer thereunder; and such Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement arising prior to
the date of such succession.
The applicable Servicer shall, upon request of the Trustee, but at
the expense of such Servicer, deliver to the assuming party all documents and
records relating to each Subservicing Agreement (if any) and the Mortgage Loans
then being serviced thereunder and an accounting of amounts collected and held
by it and otherwise use its best efforts to effect the orderly and efficient
transfer of the Subservicing Agreement to the assuming party.
Section 3.25 Compensating Interest.
Each Servicer shall remit to the Trustee on each Remittance Date an
amount from its own funds equal to the Compensating Interest payable by such
Servicer on such Remittance Date.
Section 3.26 Credit Reporting; ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
(a) With respect to each Mortgage Loan, each Servicer agrees to
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian, and TransUnion
Credit Information Company (three of the credit repositories), on a monthly
basis.
(b) Each Servicer shall comply with Title V of the
▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans required to be serviced by it and the
related borrowers and shall provide all required notices thereunder.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances.
(a) The amount of P&I Advances to be made by each Servicer for any
Remittance Date shall equal, subject to Section 4.01(c), the sum of (i) the
aggregate amount of Scheduled Payments (with each interest portion thereof net
of the related Servicing Fee), due during the Due Period immediately preceding
such Remittance Date in respect of the Mortgage Loans, which Scheduled Payments
were not received as of the close of business on the related Determination Date,
plus (ii) with respect to each REO Property, which REO Property was acquired
during or prior to the related Prepayment Period and as to which such REO
Property an REO Disposition did not occur during the related Prepayment Period,
an amount equal to the excess, if any, of the Scheduled Payments (with each
interest portion thereof net of the related Servicing Fee) that would have been
due on the related Due Date in respect of the related Mortgage Loans, over the
net income from such REO Property transferred to the related Collection Account
for distribution on such Remittance Date.
(b) On the Remittance Date, each Servicer shall remit in immediately
available funds to the Trustee an amount equal to the aggregate amount of P&I
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
for the related Remittance Date either (i) from its own funds or (ii) from the
related Collection Account, to the extent of funds held therein for future
distribution (in which case, it will cause to be made an appropriate entry in
the records of the related Collection Account that Amounts Held for Future
Distribution have been, as permitted by this Section 4.01, used by such Servicer
in discharge of any such P&I Advance) or (iii) in the form of any combination of
(i) and (ii) aggregating the total amount of P&I Advances to be made by such
Servicer with respect to the Mortgage Loans and REO Properties. Any Amounts Held
for Future Distribution and so used shall be appropriately reflected in such
Servicer's records and replaced by such Servicer by deposit in the related
Collection Account on or before any future Remittance Date to the extent
required.
(c) The obligation of each Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from coverage under this Agreement, except as otherwise provided
in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by either Servicer
if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by either Servicer that it has made a Nonrecoverable P&I Advance
or a Nonrecoverable Servicing Advance or that any proposed P&I Advance or
Servicing Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of such Servicer delivered to the Trustee.
(e) Except as otherwise provided herein, the applicable Servicer
shall be entitled to reimbursement pursuant to Section 3.11 hereof for Servicing
Advances from recoveries from the related Mortgagor or from all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds and
Condemnation Proceeds) with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution.
(a) On each Distribution Date, the Trustee will make the
disbursements and transfers from amounts then on deposit in the Distribution
Account in the following order of priority and to the extent of the Available
Funds remaining:
(i) to the holders of each Class of Certificates in the following
order of priority:
(A) to the Class A-1 Certificates, Class A-2 Certificates,
Class A-3 Certificates and Class A-4 Certificates, the related
Accrued Certificate Interest Distribution Amount and any Unpaid
Interest Amounts for such Distribution Date, in each case pursuant
to the allocation set forth in clauses (iv) and (v) of this Section
4.02(a);
(B) to the Class M-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(C) to the Class M-2 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(D) to the Class M-3 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(E) to the Class B-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(F) to the Class B-2 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date; and
(G) to the Class B-3 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(ii) (A) on each Distribution Date (1) before the related Stepdown
Date or (2) with respect to which a Trigger Event is in effect, to the
holders of the related Class or Classes of LIBOR Certificates then
entitled to distributions of principal as set forth below, from amounts
remaining on deposit in the Distribution Account after making
distributions pursuant to clause (i) above, an amount equal to the
Principal Distribution Amount in the following order of priority:
(a) to the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates, allocated as described in Section 4.02(c), until
the respective Class Certificate Balances thereof are reduced
to zero; and
(b) sequentially to the Class M-1, Class M-2, Class M-3,
Class B-1, Class B-2 and Class B-3 Certificates, in that
order, until the respective Class Certificate Balances are
reduced to zero;
(B) on each Distribution Date (1) on and after the related
Stepdown Date and (2) as long as a Trigger Event is not in effect,
to the holders of the related Class or Classes of LIBOR Certificates
then entitled to distribution of principal, from amounts remaining
on deposit in the Distribution Account after making distributions
pursuant to clause (i) above, an amount equal to, in the aggregate,
the Principal Distribution Amount in the following amounts and order
of priority:
(a) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section
4.02(c), until the respective Class Certificate Balances
thereof are reduced to zero;
(b) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above and (y) the Class M-1 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(c) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above and to the Class M-1 Certificates in clause
(ii)(B)(b) above and (y) the Class M-2 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(d) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above and to the Class M-2 Certificates in clause
(ii)(B)(c) above and (y) the Class M-3 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(e) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) and to the Class M-3 Certificates in clause
(ii)(B)(d) above and (y) the Class B-1 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(f) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above and to the Class B-1 Certificates in clause
(ii)(B)(e) above and (y) the Class B-2 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero; and
(g) to the Class B-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in clause
(ii)(B)(c) above, to the Class M-3 Certificates in clause
(ii)(B)(d) above, to the Class B-1 Certificates in clause
(ii)(B)(e) above and to the Class B-2 Certificates in clause
(ii)(B)(f) above and (y) the Class B-3 Principal Distribution
Amount, until the Class Certificate Balance thereof has been
reduced to zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above, plus as specifically indicated below, from amounts on
deposit in the Excess Reserve Fund Account, shall be distributed in the
following order of priority:
(A) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amounts for such Class;
(B) to the holders of the Class M-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(C) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amounts for such Class;
(D) to the holders of the Class M-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(E) to the holders of the Class M-3 Certificates, any Unpaid
Interest Amounts for such Class;
(F) to the holders of the Class M-3 Certificates, any Unpaid
Realized Loss Amount for such Class;
(G) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amounts for such Class;
(H) to the holders of the Class B-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(I) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amounts for such Class;
(J) to the holders of the Class B-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(K) to the holders of the Class B-3 Certificates, any Unpaid
Interest Amounts for such Class;
(L) to the holders of the Class B-3 Certificates, any Unpaid
Realized Loss Amounts for such Class;
(M) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(N) from funds on deposit in the Excess Reserve Fund Account
(not including any Interest Rate Cap Payment included in such
account) with respect to such Distribution Date, an amount equal to
any Basis Risk CarryForward Amount with respect to any LIBOR
Certificate for such Distribution Date to the LIBOR Certificates in
the same order and priority in which the Accrued Certificate
Interest Distribution Amount is allocated among such Classes of
Certificates;
(O) from any Interest Rate Cap Payments on deposit in the
Excess Reserve Fund Account with respect to such Distribution Date,
an amount equal to any unpaid remaining Basis Risk CarryForward
Amount with respect to the Class A-2, Class A-3 and Class A-4
Certificates for such Distribution Date (after giving effect to
distributions pursuant to clause (N) above) to the Class A-2, Class
A-3 and Class A-4 Certificates, allocated among such Classes of
Certificates pro rata, based upon their respective Class Certificate
Balances;
(P) to the holders of the Class X Certificates, the remainder
of the Class X Distributable Amount and any remaining Interest Rate
Cap Payments not distributed pursuant to Sections
4.02(a)(iii)(A)-(O); and
(Q) to the holders of the Class R Certificates, any remaining
amount;
(iv) Solely for purposes of interest allocation calculations, the
portion of the interest component of Available Funds attributable to Group
I Mortgage Loans will be allocated:
(a) first, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid
Interest Amounts for the Class A-1 Certificates; and
(b) second, to the Class A-2, Class A-3 and Class A-4
Certificates, pro rata, the Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amounts for the
Class A-2, Class A-3 and Class A-4 Certificates, respectively,
to the extent not otherwise previously paid from the interest
component of Available Funds attributable to Group II Mortgage
Loans; and
(v) Solely for purposes of interest allocation calculations, the
portion of the interest component of Available Funds attributable to Group
II Mortgage Loans will be allocated:
(a) first, concurrently to the Class A-2, Class A-3 and
Class A-4 Certificates, pro rata, the Accrued Certificate
Interest Distribution Amount and any Unpaid Interest Amounts
for the Class A-2, Class A-3 and Class A-4 Certificates,
respectively; and
(b) second, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid
Interest Amounts for the Class A-1 Certificates to the extent
not otherwise previously paid from the interest component of
Available Funds attributable to Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive the related Accrued
Certificate Interest Distribution Amount or the related Unpaid Interest Amounts,
if any, then that unpaid amount will be recoverable by the holders of that
class, with interest thereon, on future Distribution Dates, as Unpaid Interest
Amounts, subject to the priorities described above.
(b) On each Distribution Date, all amounts representing Prepayment
Charges from the Mortgage Loans received during the related Prepayment Period
will be distributed to the holders of the Class P Certificates.
(c) All principal distributions to the holders of the Class A
Certificates on any Distribution Date shall be allocated concurrently between
the Class A-1 Certificates, on the one hand, and the Group II Class A
Certificates, on the other hand, based on the Class A Principal Allocation
Percentage for the Class A-1 Certificates and the Group II Class A Certificates,
as applicable; provided, however, that, if the Class Certificate Balance of the
Class A Certificates in either Class A Certificate Group is reduced to zero,
then the remaining amount of principal distributions distributable to the Class
A Certificates on such Distribution Date, and the amount of such principal
distributions distributable on all subsequent Distribution Dates, shall be
distributed to the holders of the Class A Certificates in the other Class A
Certificate Group remaining outstanding, in accordance with the principal
distribution allocations described in this Section 4.02(c), until their Class
Certificate Balances have been reduced to zero. Any distributions of principal
to the Class A-1 Certificates shall be made first from payments relating to the
Group I Mortgage Loans, and any distributions of principal to the Group II Class
A Certificates shall be made first from payments relating to the Group II
Mortgage Loans. Any principal distributions allocated to the Group II Class A
Certificates shall be allocated pro rata to (1) the Class A-2 Certificates,
based upon their Class Certificate Balance, until their Class Certificate
Balance has been reduced to zero, and (2) the Class of Group II Class A
Sequential Certificates then entitled to distributions of principal, based upon
the aggregate Class Certificate Balances of the Group II Class A Sequential
Certificates. Principal distributions allocated to the Group II Class A
Sequential Certificates shall be distributed sequentially to the Class A-3
Certificates, until their Class Certificate Balance has been reduced to zero,
and then to the Class A-4 Certificates, until their Class Certificate Balance
has been reduced to zero. Notwithstanding the foregoing, on and after the
Distribution Date on which the aggregate Class Certificate Balances of the
Subordinated Certificates and the Class X Certificates have been reduced to
zero, any principal distributions allocated to the Group II Class A Certificates
shall be allocated pro rata to the Class A-2, Class A-3 and Class A-4
Certificates, based on their respective Class Certificate Balances.
(d) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date will be allocated as a
reduction in the following order:
(1) First, to the amount of interest payable to the
Class X Certificates; and
(2) Second, pro rata, as a reduction of the Accrued
Certificate Interest for the Class A, Class M and Class B
Certificates, based on the amount of interest to which such
classes would otherwise be entitled.
Section 4.03 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall make
available to each Certificateholder, the Servicers, the Depositor and each
Rating Agency a statement setting forth with respect to the related
distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amounts included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution, any Basis Risk
CarryForward Amount for such Distribution Date and the amount of all Basis
Risk CarryForward Amount covered by withdrawals from the Excess Reserve
Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between principal and
interest, including any Basis Risk CarryForward Amount not covered by
amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such Distribution
Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date;
(vi) the amount of the Servicing Fees paid to or retained by the
Servicers or Subservicer (with respect to the Subservicers, in the
aggregate) with respect to such Distribution Date;
(vii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of P&I Advances included in the distribution on
such Distribution Date and the aggregate amount of P&I Advances reported
by the Servicers as outstanding as of the close of business on such
Distribution Date;
(ix) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(x) For each of the preceding 12 calendar months, or all calendar
months since the related Cut-off Date, whichever is less, the aggregate
dollar amount of the Scheduled Payments (A) due on all Outstanding
Mortgage Loans on each of the Due Dates in each such month and (B)
delinquent 60 days or more on each of the Due Dates in each such month;
(xi) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan as of the close of business on the
Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xii) the total number and aggregate principal balance of any REO
Properties (and market value, if available) as of the close of business on
the Determination Date preceding such Distribution Date;
(xiii) whether a Trigger Event has occurred and is continuing
(including the calculation of thereof and the aggregate outstanding
balance of all 60+ Delinquent Mortgage Loans);
(xiv) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xv) the aggregate amount of Applied Realized Loss Amounts incurred
during the preceding calendar month and aggregate Applied Realized Loss
Amounts through such Distribution Date;
(xvi) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Loss Amounts and Unpaid Interest Amounts;
(xvii) the Subordinated Amount and Required Subordinated Amount;
(xviii) Prepayment Charges collected and paid by the Servicers;
(xix) the Interest Rate Cap Payment, if any, for such Distribution
Date; and
(xx) the Cumulative Loss Percentage.
(b) The Trustee's responsibility for providing the above statement
to the Certificateholders, each Rating Agency, each Servicer and the Depositor
is limited to the availability, timeliness and accuracy of the information
derived from the applicable Servicer. The Trustee will provide the above
statement via the Trustee's internet website. The Trustee's website will
initially be located at ▇▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇.▇▇▇ and assistance in
using the website can be obtained by calling the Trustee's investor relations
desk at ▇-▇▇▇-▇▇▇-▇▇▇▇. A paper copy of the statement will also be made
available upon request.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this
Section 4.03 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
(d) Not later than the Determination Date, each Servicer shall
furnish to the Trustee a monthly remittance advice statement (in a format
mutually agreed upon by such Servicer and the Trustee) containing such
information as shall be reasonably requested by the Trustee to enable the
Trustee to provide the reports required by Section 4.03(a) as to the
accompanying remittance and the period ending on the close of business on the
last Business Day of the immediately preceding month (the "Servicer Remittance
Report").
Each Servicer shall furnish to the Trustee (and the Servicer of the
Aames Mortgage Loans shall furnish to Aames with respect to each Aames Mortgage
Loan) an individual loan accounting report, as of the related Determination
Date, to document Mortgage Loan payment activity on an individual Mortgage Loan
basis. With respect to each month, the corresponding individual loan accounting
report (in electronic format) shall be received by the Trustee no later than the
related Determination Date, which report shall contain the following:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, along with a detailed report of interest on principal
prepayment amounts remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by such Servicer
during the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate of any expenses reimbursed to such Servicer during
the prior distribution period pursuant to Section 3.11; and
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 31 to 60 days, (2) 61 to 90 days, (3) 91
days or more; (b) as to which foreclosure has commenced; and (c) as to
which REO Property has been acquired.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated in accordance with the definition of
LIBOR. Until all of the LIBOR Certificates are paid in full, the Trustee will at
all times retain at least four Reference Banks for the purpose of determining
LIBOR with respect to each LIBOR Determination Date. The Trustee initially shall
designate the Reference Banks (after consultation with the Depositor). Each
"Reference Bank" shall be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market, shall not control, be
controlled by, or be under common control with, the Trustee and shall have an
established place of business in London. If any such Reference Bank should be
unwilling or unable to act as such or if the Trustee should terminate its
appointment as Reference Bank, the Trustee shall promptly appoint or cause to be
appointed another Reference Bank (after consultation with the Depositor). The
Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement. The Trustee shall not have any liability or
responsibility to any Person for its inability, following a good-faith
reasonable effort, to obtain quotations from the Reference Banks or to determine
the arithmetic mean referred to in the definition of LIBOR, all as provided for
in this Section 4.04 and the definition of LIBOR. The establishment of LIBOR and
each Pass-Through Rate for the LIBOR Certificates by the Trustee shall (in the
absence of manifest error) be final, conclusive and binding upon each Holder of
a Certificate and the Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts.
Any Applied Realized Loss Amounts will be allocated to the most
junior Class of Subordinate Certificates then outstanding in reduction of the
Class Certificate Balance thereof.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto
as exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class X
Certificates and the Class P Certificates as follows: "Deutsche Bank National
Trust Company, as Indenture Trustee on behalf of the Noteholders of the ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc. NIM Trust 2003-HE1N," and to deliver such Class X
Certificates and Class P Certificates to Deutsche Bank National Trust Company,
as trustee of the NIM Trust.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if such Holder has so
notified the Trustee at least five Business Days prior to the related Record
Date or (y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the countersignature and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless countersigned by the Trustee by manual signature, and
such countersignature upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06, a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c) below
and to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. Upon surrender for registration of transfer of
any Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In
determining whether a transfer is being made pursuant to an effective
registration statement, the Trustee shall be entitled to rely solely upon a
written notice to such effect from the Depositor. Except with respect to the
transfer of the Class X and Class P Certificates to the NIM Trust on the Closing
Date, in the event that a transfer of a Private Certificate which is a Physical
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer shall certify to
the Trustee in writing the facts surrounding the transfer in substantially the
form set forth in Exhibit H (the "Transferor Certificate") and either (i) there
shall be delivered to the Trustee a letter in substantially the form of Exhibit
I (the "Rule 144A Letter") or (ii) there shall be delivered to the Trustee at
the expense of the transferor an Opinion of Counsel that such transfer may be
made without registration under the Securities Act. In the event that a transfer
of a Private Certificate which is a Book-Entry Certificate is to be made in
reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer will be deemed to have made as of the transfer
date each of the certifications set forth in the Transferor Certificate in
respect of such Certificate and the transferee will be deemed to have made as of
the transfer date each of the certifications set forth in the Rule 144A Letter
in respect of such Certificate, in each case as if such Certificate were
evidenced by a Physical Certificate. The Depositor shall provide to any Holder
of a Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Servicers
shall cooperate with the Depositor in providing the Rule 144A information
referenced in the preceding sentence, including providing to the Depositor such
information regarding the Certificates, the Mortgage Loans and other matters
regarding the Trust Fund as the Depositor shall reasonably request to meet its
obligation under the preceding sentence. Each Holder of a Private Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor and each Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
Except with respect to the transfer of the Class X and Class P
Certificates to the NIM Trust on the Closing Date, no transfer of an
ERISA-Restricted Certificate shall be made unless the Trustee shall have
received either (i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Trustee (in the
event such Certificate is a Private Certificate or a Residual Certificate, such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit I), to the
effect that such transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA, a plan subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law ("Similar Law") materially
similar to the foregoing provisions of ERISA or the Code, nor a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, or (ii) in the case of an ERISA-Restricted
Certificate other than a Residual Certificate or a Class P Certificate that has
been the subject of an ERISA-Qualifying Underwriting, and the purchaser is an
insurance company, a representation that the purchaser is an insurance company
that is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60
or (iii) in the case of any such ERISA-Restricted Certificate other than a
Residual Certificate or Class P Certificate presented for registration in the
name of an employee benefit plan subject to Title I of ERISA, a plan or
arrangement subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a plan subject to Similar Law, or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement
or using such plan's or arrangement's assets, an Opinion of Counsel satisfactory
to the Trustee and each Servicer, which Opinion of Counsel shall not be an
expense of the Trustee, the Servicers or the Trust Fund, addressed to the
Trustee, to the effect that the purchase or holding of such ERISA-Restricted
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code or similar violation of Similar Law and will not subject the Trustee or
the Servicers to any obligation in addition to those expressly undertaken in
this Agreement or to any liability. For purposes of the preceding sentence, with
respect to an ERISA-Restricted Certificate that is not a Private Certificate or
a Residual Certificate, in the event the representation letter referred to in
the preceding sentence is not furnished, such representation shall be deemed to
have been made to the Trustee by the transferee's (including an initial
acquirer's) acceptance of the ERISA-Restricted Certificates. Notwithstanding
anything else to the contrary herein, (a) any purported transfer of an
ERISA-Restricted Certificate, other than a Class P Certificate or Residual
Certificate, to or on behalf of an employee benefit plan subject to ERISA, the
Code or Similar Law without the delivery to the Trustee of an Opinion of Counsel
satisfactory to the Trustee as described above shall be void and of no effect
and (b) any purported transfer of a Class P Certificate or Residual Certificate
to a transferee that does not make the representation in clause (i) above shall
be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit G.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact a Non-Permitted Transferee at the time it became a Holder or,
at such subsequent time as it became a Non-Permitted Transferee, all
payments made on such Residual Certificate at and after either such time.
Any such payments so recovered by the Trustee shall be paid and delivered
by the Trustee to the last preceding Permitted Transferee of such
Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate to any Holder
who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee or the
Servicers, to the effect that the elimination of such restrictions will not
cause either the Lower Tier REMIC or the Upper Tier REMIC hereunder to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is a
Non-Permitted Transferee and (b) to provide for a means to compel the Transfer
of a Residual Certificate which is held by a Person that is a Non-Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, or (y) the Depositor at its option
advises the Trustee in writing (and the Trustee consents) that it elects to
terminate the book-entry system through the Depository, the Trustee shall notify
all Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully-registered Certificates (the
"Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Trustee shall issue the Definitive Certificates. Neither the Servicers, the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in relying
on, such instructions. The Depositor shall provide the Trustee with an adequate
inventory of Certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder; provided
that the Trustee shall not by virtue of its assumption of such obligations
become liable to any party for any act or failure to act of the Depository.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Depositor, the
Servicers and the Trustee such security or indemnity as may be required by them
to hold each of them harmless, then, in the absence of notice to the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Trustee
shall execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners.
The Servicers, the Trustee, the Depositor and any agent of a
Servicer, the Depositor or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Servicers, the Trustee, the Depositor nor any agent
of a Servicer, the Depositor or the Trustee shall be affected by any notice to
the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or a Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, such Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense
an office or offices or agency or agencies in New York, New York where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates the offices of its agent for such purposes located
at DTC Transfer Agent Services, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Trustee shall give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the
Servicers.
The Depositor and each of the Servicers shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or a Servicer.
The Depositor and each of the Servicers will each keep in full
effect its existence, rights and franchises as a corporation or federally
chartered savings bank, as the case may be, under the laws of the United States
or under the laws of one of the states thereof and will each obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or a Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or a Servicer shall be a party, or any person succeeding to the
business of the Depositor or a Servicer, shall be the successor of the Depositor
or such Servicer, as the case may be, hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person to such Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac.
Section 6.03 Limitation on Liability of the Depositor, the Servicers
and Others.
Neither the Depositor, the Servicers nor any of their directors,
officers, employees or agents of the Depositor shall be under any liability to
the Certificateholders for any action taken or for refraining from the taking of
any action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicers or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicers or any such Person
from any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, each Servicer and any director,
officer, employee or agent of the Depositor and each Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor, each
Servicer and any director, officer, employee or agent of the Depositor and each
Servicer shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence (or gross negligence in
the case of the Depositor) in the performance of duties hereunder or by reason
of reckless disregard of obligations and duties hereunder. Neither the Depositor
nor either Servicer shall be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its respective duties
hereunder and which in its opinion may involve it in any expense or liability;
provided, however, that each of the Depositor and each Servicer may in its
discretion undertake any such action (or direct the Trustee to undertake such
actions pursuant to Section 2.03 hereof for the benefit of the
Certificateholders) that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and interests of the
Trustee and the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor and the
applicable Servicer shall be entitled to be reimbursed therefor out of the
Collection Account.
Section 6.04 Limitation on Resignation of a Servicer.
Subject to Sections 7.01 and 10.07, neither Servicer shall assign
this Agreement or resign from the obligations and duties hereby imposed on it
except by mutual consent of the Servicers, the Depositor and the Trustee or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by such Servicer. Any such
determination permitting the resignation of a Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Depositor and the Trustee
which Opinion of Counsel shall be in form and substance acceptable to the
Depositor and the Trustee. No such resignation shall become effective until a
successor shall have assumed such Servicer's responsibilities and obligations
hereunder.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that a Servicer determines that it will no longer engage
in the business of servicing mortgage loans, such Servicer may assign its rights
under this Agreement, provided that, (i) the Depositor in its sole discretion
has consented, (ii) the Rating Agencies' ratings of the Certificates in effect
immediately prior to such action will not be qualified, reduced or withdrawn as
a result thereof (as evidenced by a letter to such effect from the Rating
Agencies) and (iii) such Servicer shall be liable for all costs and expenses
associated with the transfer of servicing, provided further, that the Servicer
shall indemnify and hold each of the Trust Fund, the Trustee, the Depositor, the
other Servicer hereunder, any sub-servicer, the successor servicer and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that such party may sustain in any way related to such
assignment. No assignment by a Servicer shall become effective until a successor
servicer acceptable to the Depositor and the Trustee shall have assumed in
writing such Servicer's responsibilities, duties, liabilities (other than those
liabilities arising prior to the appointment of such successor) and obligations
under this Agreement. Any such assignment shall not relieve the applicable
Servicer of responsibility for any of the obligations specified herein except to
the extent that such responsibilities have been expressly assumed by the
successor servicer.
Section 6.05 Additional Indemnification by the Servicers; Third
Party Claims.
Each Servicer shall indemnify the Depositor and the Trustee and hold
them harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that any of them may sustain in any way
related to any breach by such Servicer, of (i) any of its representations and
warranties referred to in Section 2.03(a), (ii) any error in any tax or
information return prepared by such Servicer or (iii) the failure of such
Servicer to perform its duties and service the Mortgage Loans in compliance with
the terms of this Agreement. The applicable Servicer immediately shall notify
the Depositor and the Trustee if such claim is made by a third party with
respect to this Agreement or the Mortgage Loans, assume (with the prior written
consent of the Depositor and the Trustee) the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the applicable Originator or the Trustee in respect
of such claim.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(a) any failure by a Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to such
Servicer by the Depositor or by the Trustee or to the Servicers, the Depositor
and the Trustee by Certificateholders evidencing percentage interests of at
least 25% in the Certificates; or
(b) failure on the part of a Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the part of
such Servicer set forth in this Agreement which continues unremedied for a
period of forty-five days (except that such number of days shall be fifteen in
the case of a failure to pay any premium for any insurance policy required to be
maintained under this Agreement) after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to such Servicer by the Depositor or by the Trustee, or to the
Servicers, the Depositor and the Trustee by Certificateholders of Certificates
evidencing percentage interests of at least 25% in the Certificates and (ii)
actual knowledge of such failure by a Servicing Officer of such Servicer; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against a Servicer and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) a Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to a
Servicer or of or relating to all or substantially all of its property; or
(e) a Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) any failure of a Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied for one Business Day immediately following the
Remittance Date; or
(g) a breach of any representation and warranty of a Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to such Servicer by the Trustee or the Depositor, or to the Servicers, the
Trustee and the Depositor by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(h) any withdrawal or downgrade of two or more levels (i.e., from
"Above Average" to "Below Average" or the equivalent) of the servicer rating, as
of the Closing Date, of a Servicer by any Rating Agency which results in a
downgrade, qualification or withdrawal of the rating assigned to any Class of
Certificates by any Rating Agency.
If an Event of Default described in clauses (a) through (h) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, and at the
direction of 51% of the Voting Rights, the Trustee shall, by notice in writing
to a Servicer (with a copy to each Rating Agency), terminate all of the rights
and obligations of such Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder; provided, however, that the Trustee shall not be required to give
written notice to such Servicer of the occurrence of an Event of Default
described in clauses (b) through (h) of this Section 7.01 unless and until a
Responsible Officer of the Trustee has actual knowledge of the occurrence of
such an event. In the event that a Responsible Officer of the Trustee has actual
knowledge of the occurrence of an event of default described in clause (a) of
this Section 7.01, the Trustee shall give written notice to the applicable
Servicer of the occurrence of such an event within one Business Day of the first
day on which such Responsible Officer obtains actual knowledge of such
occurrence. On and after the receipt by such Servicer of such written notice,
all authority and power of such Servicer hereunder, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee. Subject
to Section 7.02, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of such Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of such Servicer to pay amounts owed pursuant to Article VIII. Such Servicer
agrees to cooperate with the Trustee in effecting the termination of such
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee of all cash amounts which shall at the time be
credited to the Collection Account of such predecessor Servicer, or thereafter
be received with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of a Servicer
hereunder, the Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding P&I Advances and
Servicing Advances.
Section 7.02 Trustee to Act; Appointment of Successor.
On and after the time a Servicer receives a notice of termination
pursuant to Section 3.24 or Section 7.01, the Trustee shall, subject to and to
the extent provided in Section 3.05, be the successor to such 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 such Servicer by the terms and provisions
hereof and applicable law including the obligation to make P&I Advances or
Servicing Advances pursuant to Section 3.24 or Section 7.01. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans that such Servicer would have been entitled to charge to its Collection
Account if such Servicer had continued to act hereunder including, if such
Servicer was receiving the Servicing Fee, the Servicing Fee and the income on
investments or gain related to its Collection Account (in addition to income on
investments or gain related to the Distribution Account for the benefit of the
Trustee). Notwithstanding the foregoing, if the Trustee has become the successor
to the Servicer in accordance with Section 7.01, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
P&I Advances and Servicing Advances pursuant to Section 4.01, if it is otherwise
unable to so act or at the written request of Certificateholders entitled to at
least 51% of the Voting Rights, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency, as the successor to such Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of such Servicer hereunder. Any successor to such Servicer shall be
an institution which is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved seller/servicer in
good standing, which has a net worth of at least $30,000,000, which is willing
to service the Mortgage Loans and which executes and delivers to the Depositor
and the Trustee an agreement accepting such delegation and assignment,
containing an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of such Servicer (other than
liabilities of such Servicer under Section 6.03 incurred prior to termination of
the Servicer under Section 7.01), with like effect as if originally named as a
party to this Agreement; provided that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced, as a result of such assignment and
delegation. Pending appointment of a successor to a Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.05, act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of the Servicing Fee Rate and amounts paid to such Servicer from
investments. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Neither the Trustee nor any other successor servicer shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of a Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
In the event that a Servicer is terminated pursuant to Section 7.01,
such terminated Servicer shall be responsible for the servicing transfer,
provide notices to the Mortgagors, arrange for and transfer the Servicing Files
to a successor Servicer, pay all of its own out-of-pocket costs and expenses at
its own expense and pay all costs and expenses of all other parties hereto
relating to the transfer of the Servicing Files to a successor Servicer
(excluding set-up costs and other administrative expenses of the successor
Servicer), and in all other cases the successor Servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund. Such amounts payable by the terminated Servicer shall be paid by the
terminated Servicer promptly upon presentation of reasonable documentation of
such costs. If the Trustee is the predecessor Servicer (except in the case where
the Trustee in its role as successor Servicer is being terminated pursuant to
Section 7.01 by reason of an Event of Default caused solely by the Trustee as
the successor Servicer and not by the predecessor Servicer's actions or
omissions), such costs shall be paid by the prior terminated Servicer promptly
upon presentation of reasonable documentation of such costs.
Any successor to a Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer, maintain in force the policy or policies that each Servicer is
required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to a
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and each Rating Agency
notice of each such Event of Default hereunder known to the Trustee, unless such
event shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.
The Trustee, before the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing,
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security and with respect to the investment of funds in the Distribution
Account);
(h) except as otherwise provided in Section 7.01, the Trustee shall
not be deemed to have knowledge of an Event of Default until a Responsible
Officer of the Trustee shall have received written notice thereof; and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken
as the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Trustee's execution and
countersignature of the Certificates. The Trustee shall not be accountable for
the use or application by the Depositor or a Servicer of any funds paid to the
Depositor or a Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from any Collection Account by the Depositor or a Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Trustee's Fees and Expenses.
As compensation for its activities under this Agreement, the Trustee
may withdraw from the Distribution Account on each Distribution Date the Trustee
Fee for the Distribution Date and any interest or investment income earned on
funds deposited in the Distribution Account. The Trustee and any director,
officer, employee, or agent of the Trustee shall be indemnified by the Trust
Fund against any loss, liability, or expense (including reasonable attorney's
fees) resulting from any error in any tax or information return prepared by such
Servicer or incurred in connection with any claim or legal action relating to
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement, other than any loss, liability, or expense (i) resulting from any
breach of either Servicer's obligations in connection with this Agreement for
which the related Servicer has performed its obligation to indemnify the Trustee
pursuant to Section 6.05, or (ii) incurred because of willful misconduct, bad
faith, or negligence in the performance of any of the Trustee's duties under
this Agreement. This indemnity shall survive the termination of this Agreement
or the resignation or removal of the Trustee under this Agreement. Without
limiting the foregoing, except as otherwise agreed upon in writing by the
Depositor and the Trustee, and except for any expense, disbursement, or advance
arising from the Trustee's negligence, bad faith, or willful misconduct, the
Trust Fund shall pay or reimburse the Trustee, for all reasonable expenses,
disbursements, and advances incurred or made by the Trustee in accordance with
this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance of
the Certificates,
(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must engage
them to perform services under this Agreement, and
(C) printing and engraving expenses in connection with
preparing any Definitive Certificates.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Registrar, or
paying agent under this Agreement or for any other expenses incurred by the
Trustee.
Section 8.06 Eligibility Requirements for the Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause any of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with this
Section 8.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its affiliates or the
Servicers and their affiliates; provided, however, that such entity cannot be an
affiliate of the Depositor or the Servicers other than the Trustee in its role
as successor to the Servicer.
Section 8.07 Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Servicers, each Rating Agency not less than 60 days before the date specified in
such notice, when, subject to Section 8.08, such resignation is to take effect,
and acceptance by a successor trustee in accordance with Section 8.08 meeting
the qualifications set forth in Section 8.06. If no successor trustee meeting
such qualifications shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice or resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor or the Servicer may remove the Trustee and
appoint a successor trustee by written instrument, in triplicate, one copy of
which shall be delivered to the Trustee, one copy to each Servicer and one copy
to the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to each Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
and the Servicers an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Servicers and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be eligible under
Section 8.06 without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the applicable 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 and
for the benefit of the Certificateholders, such title to the Trust Fund or any
part thereof, whichever is applicable, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
applicable Servicer and the Trustee may consider appropriate. If either Servicer
shall not have joined in such appointment within 15 days after the receipt by
such Servicer of a request to do so or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of a Servicer, shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to a
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Servicers, and not the Trustee, shall be jointly and
severally liable for the payment of reasonable compensation, reimbursement and
indemnification to any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicers and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters.
It is intended that the assets with respect to which any REMIC
election pertaining to the Trust Fund is to be made, as set forth in the
Preliminary Statement, shall constitute, and that the conduct of matters
relating to such assets shall be such as to qualify such assets as, a "real
estate mortgage investment conduit" as defined in and in accordance with the
REMIC Provisions. In furtherance of such intention, the Trustee covenants and
agrees that it shall act as agent (and the Trustee is hereby appointed to act as
agent) on behalf of the Lower Tier REMIC and Upper Tier REMIC and that in such
capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit (REMIC) Income Tax Return (Form 1066 or any successor form
adopted by the Internal Revenue Service) and prepare and file with the Internal
Revenue Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to each REMIC containing
such information and at the times and in the manner as may be required by the
Code or state or local tax laws, regulations, or rules, and furnish to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby;
(b) within thirty days of the Closing Date, the Trustee will apply
for an employer identification number from the Internal Revenue Service via Form
SS-4 or any other acceptable method for all tax entities and shall also furnish
to the Internal Revenue Service, on Form 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of the Lower Tier REMIC and the Upper
Tier REMIC be treated as a REMIC on the federal tax return for its first taxable
year (and, if necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is a Non-Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status of each of the Upper Tier REMIC and Lower Tier REMIC as a
REMIC under the REMIC Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of either the
Lower Tier REMIC or the Upper Tier REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on the Lower Tier REMIC and the
Upper Tier REMIC created hereunder before its termination when and as the same
shall be due and payable (but such obligation shall not prevent the Trustee or
any other appropriate Person from contesting any such tax in appropriate
proceedings and shall not prevent the Trustee from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings);
(i) cause federal, state or local income tax or information returns
to be signed by the Trustee or such other person as may be required to sign such
returns by the Code or state or local laws, regulations or rules;
(j) maintain records relating to the Lower Tier REMIC and the Upper
Tier REMIC created hereunder, including the income, expenses, assets, and
liabilities thereof on a calendar year basis and on the accrual method of
accounting and the fair market value and adjusted basis of the assets determined
at such intervals as may be required by the Code, as may be necessary to prepare
the foregoing returns, schedules, statements or information; and
(k) as and when necessary and appropriate, represent the Lower Tier
REMIC and the Upper Tier 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
the Lower Tier REMIC and the Upper Tier REMIC created hereunder, enter into
settlement agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of the Lower Tier REMIC and the Upper Tier
REMIC created hereunder, and otherwise act on behalf of each REMIC in relation
to any tax matter or controversy involving it.
The Trustee shall treat the rights of the Class P Certificateholders
to Prepayment Charges, the rights of the Class X Certificateholders to receive
Interest Rate Cap Payments (subject to the obligation to pay Basis Risk
CarryForward Amounts) and the rights of the LIBOR Certificateholders to receive
Basis Risk CarryForward Amounts as the beneficial ownership of interests in a
grantor trust, and not as an obligation of either the Lower Tier REMIC or Upper
Tier REMIC created hereunder, for federal income tax purposes.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value to each Class of
Certificates of the right to receive Basis Risk CarryForward Amounts from the
Excess Reserve Fund Account. Thereafter, the Depositor shall provide to the
Trustee promptly upon written request therefor any additional information or
data that the Trustee may, from time to time, reasonably request to enable the
Trustee to perform its duties under this Agreement. The Depositor hereby
indemnifies the Trustee for any losses, liabilities, damages, claims, or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.
If any tax is imposed on "prohibited transactions" of either the
Lower Tier REMIC or the Upper Tier REMIC created hereunder as defined in Section
860F(a)(2) of the Code, on the "net income from foreclosure property" of the
Lower Tier REMIC as defined in Section 860G(c) of the Code, on any contribution
to either the Lower Tier REMIC or Upper Tier REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including
any minimum tax imposed on either REMIC pursuant to Sections 23153 and 24874 of
the California Revenue and Taxation Code, if not paid as otherwise provided for
herein, the tax shall be paid by (i) the Trustee if such tax arises out of or
results from negligence of the Trustee in the performance of any of its
obligations under this Agreement, (ii) the applicable Servicer, in the case of
any such minimum tax, and otherwise if such tax arises out of or results from a
breach by the Servicer of any of its obligations under this Agreement, (iii) the
applicable Originator if such tax arises out of or results from such
Originator's obligation to repurchase a Mortgage Loan pursuant to Section
2.03(e), or (iv) in all other cases, or if the Trustee or the applicable
Servicer fails to honor its obligations under the preceding clauses (i), (ii) or
(iii), any such tax will be paid with amounts otherwise to be distributed to the
Certificateholders, as provided in Section 4.02(a).
Section 8.12 Periodic Filings.
(a) The Trustee and each Servicer shall reasonably cooperate with
the Depositor in connection with the Trust's satisfying the reporting
requirements under the Securities Exchange Act of 1934, as amended. The Trustee
shall prepare on behalf of the Trust any Forms 8-K and 10-K customary for
similar securities as required by the Exchange Act and the Rules and Regulations
of the Securities and Exchange Commission thereunder, and the Trustee shall sign
and file (via the Securities and Exchange Commission's Electronic Data Gathering
and Retrieval System) such Forms on behalf of the Depositor, if an officer of
the Depositor signs the Certification (as defined below), or otherwise on behalf
of the Trust. In the event the Trustee is signing on behalf of the Depositor
pursuant to the preceding sentence, the Depositor hereby grants to the Trustee a
limited power of attorney to execute and file each such document on behalf of
the Depositor. Such power of attorney shall continue until either the earlier of
(i) receipt by the Trustee from the Depositor of written termination of such
power of attorney and (ii) the termination of the Trust. Notwithstanding the
foregoing, the Trustee shall prepare such Form to be signed by the Depositor and
the Depositor shall sign such Form, unless the Securities and Exchange
Commission has indicated that it will accept a Certification signed by the
Depositor where the related Form 10-K is signed by the Trustee on behalf of the
Depositor.
(b) Each Form 8-K shall be filed by the Trustee within 15 days after
each Distribution Date, including a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Securities and Exchange Commission),
the Trustee shall file a Form 10-K, in substance as required by applicable law
or applicable Securities and Exchange Commission staff's interpretations. Such
Form 10-K shall include as exhibits each Servicer's annual statement of
compliance described under Section 3.22 and the accountant's report described
under Section 3.23, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Trustee. The Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting from its own negligence, willful misconduct or bad
faith. The Form 10-K shall also include a certification in the form attached
hereto as Exhibit L (the "Certification"), which shall, except as described
below, be signed by the senior officer of the Depositor in charge of
securitization. Notwithstanding the foregoing, if it is determined by the
Depositor that the Certification may be executed by multiple persons, the
Trustee shall sign the Certification in respect of items 1 through 3 thereof and
the applicable Servicer shall cause the senior officer in charge of servicing at
such Servicer to sign the Certification in respect of items 4 and 5 thereof and
the Trustee may rely on the Certification signed by such Servicer to the same
extent as provided in subsection (c) below.
(c) In the event the Certification is to be signed by an officer of
the Depositor, the Trustee shall sign a certification (in the form attached
hereto as Exhibit M) for the benefit of the Depositor and its officers,
directors and Affiliates in respect of items 1 through 3 thereof of the
Certification (provided, however, that the Trustee shall not undertake an
analysis of the accountant's report attached as an exhibit to the Form 10-K),
and each Servicer shall sign a certification (in the form attached hereto as
Exhibit N) for the benefit of the Depositor, the Trustee and their respective
officers, directors and Affiliates in respect of items 4 and 5 of the
Certification. Each such certification shall be delivered to the Depositor no
later than March 10th of each year (or if such day is not a Business Day, the
immediately preceding Business Day) and the Depositor shall deliver the
Certification to be filed to the Trustee no later than March 20th of each year
(or if such day is not a Business Day, the immediately preceding Business Day).
In the event that prior to the filing date of the Form 10-K in March of each
year, the Trustee or any Servicer has actual knowledge of information material
to the Certification, that party shall promptly notify the Depositor and each of
the other parties signing the certifications. In addition, (i) the Trustee shall
indemnify and hold harmless the Depositor and its officers, directors and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon any breach of the Trustee's
obligations under this Section 8.12(c) or the Trustee's negligence, bad faith or
willful misconduct in connection therewith, and (ii) each Servicer, severally,
and not jointly, shall indemnify and hold harmless the Depositor, the Trustee
and their respective officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon any breach of Servicers' obligations under this Section 8.12(c) or
such Servicer's negligence, bad faith or willful misconduct in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the indemnified party, then (i) the Trustee agrees
in connection with a breach of the Trustee's obligations under this Section
8.12(c) or the Trustee's negligence, bad faith or willful misconduct in
connection therewith that it shall contribute to the amount paid or payable by
the Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Trustee on the other and (ii) each
Servicer agrees that it shall contribute to the amount paid or payable by the
Depositor and/or the Trustee as a result of the losses, claims, damages or
liabilities of the Depositor and/or the Trustee in such proportion as is
appropriate to reflect the relative fault of the Depositor or the Trustee, as
the case may be, on the one hand and such Servicer on the other in connection
with a breach of the Servicers' obligations under this Section 8.12(c) or such
Servicer's negligence, bad faith or willful misconduct in connection therewith.
(d) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor a copy of any such executed
report, statement or information.
(e) Prior to January 30 of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust.
Section 8.13 Tax Classification of the Excess Reserve Fund Account
and the Cap Agreement.
For federal income tax purposes, the Trustee shall treat the Excess
Reserve Fund Account and the Cap Agreement as beneficially owned by the holders
of the Class X Certificates and shall treat such portion of the Trust Fund as a
grantor trust, within the meaning of subpart E, Part I of subchapter J of the
Code. The Trustee shall treat the rights that each Class of LIBOR Certificates
has to receive payments of Basis Risk CarryForward Amounts from the Excess
Reserve Fund Account as rights to receive payments under an interest rate cap
contract written by the Class X Certificateholder in favor of each such Class
and beneficially owned by each such Class through the grantor trust.
Accordingly, each Class of Certificates (excluding the Class X, Class P and
Class R Certificates) will be comprised of two components - an Upper Tier
Regular Interest and an interest in an interest rate cap contract, and the Class
X Certificates will be comprised of three components - an Upper Tier Regular
Interest, the Cap Agreement and an interest in the Excess Reserve Fund Account,
subject to obligation to pay Basis Risk CarryForward Amounts. The Trustee shall
allocate the issue price for a Class of Certificates among the respective
components for purposes of determining the issue price of the Upper Tier Regular
Interest component based on information received from the Depositor.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicers and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) the purchase, on or after the
Optional Termination Date, by either Servicer individually, or both Servicers
together, of all Mortgage Loans (and REO Properties) at the price equal to the
sum of (i) 100% of the unpaid principal balance of each Mortgage Loan (other
than in respect of REO Property) plus accrued and unpaid interest thereon at the
applicable Mortgage Rate and (ii) the lesser of (x) the appraised value of any
REO Property as determined by the higher of two appraisals completed by two
independent appraisers selected by such Servicer at the expense of such
Servicer, plus accrued and unpaid interest on each Mortgage Loan at the
applicable Mortgage Rate and (y) the unpaid principal balance of each Mortgage
Loan related to any REO Property, in each case plus accrued and unpaid interest
thereon at the applicable Mortgage Rate and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement. In no event shall the trusts
created hereby continue beyond the expiration of 21 years from the death of the
survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the
United States to the Court of St. James's, living on the date hereof.
Notwithstanding anything to the contrary contained herein, no such
purchase shall be permitted, unless (i) after distribution of the proceeds
thereof to the Certificateholders (other than the Holders of the Class X, Class
P and Residual Certificates) pursuant to Section 9.02, the distribution of the
remaining proceeds to the Class X and Class P Certificates is sufficient to pay
the outstanding principal amount of and accrued and unpaid interest on the NIM
Securities, to the extent the NIM Securities are then outstanding, or (ii) prior
to such purchase, the purchasing Servicer(s) shall deposit in the related
Collection Account(s) an amount to be remitted to the Trustee to be directly
deposited in the noteholder account for the NIM Securities that, together with
such remaining proceeds, is sufficient to pay the outstanding principal amount
of and accrued and unpaid interest on the NIM Securities, to the extent the NIM
Securities are then outstanding.
Section 9.02 Final Distribution on the Certificates.
If on any Remittance Date, the Servicers determine that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Accounts, the Servicers shall direct the
Trustee promptly to send a Notice of Final Distribution to each
Certificateholder. If either Servicer individually elects to terminate the Trust
Fund pursuant to clause (a) of Section 9.01, such Servicer shall notify the
other Servicer of such election at least 30 days prior to the date of the Notice
of Final Distribution and such other Servicer shall have 5 days to elect to
purchase the Mortgage Loans it services. If either Servicer or both Servicers so
elect to terminate, at least 20 days prior to the date the Notice of Final
Distribution is to be mailed to the affected Certificateholders, such Servicer
or Servicers shall notify the Depositor and the Trustee of the date such
Servicer or Servicers intend or intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to Certificateholders mailed not earlier than the 10th day and not later
than the 15th day of the month next preceding the month of such final
distribution. Any such Notice of Final Distribution shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Servicer or Servicers, as the
case may be, will give such Notice of Final Distribution to each Rating Agency
at the time such Notice of Final Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, each
Servicer shall cause all funds in its Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Servicer or Servicers, as the case may be,
the Custodial Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class (after
reimbursement of all amounts due to the Servicers, the Depositor and the Trustee
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.02, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, up to an amount equal to
(i) as to each Class of Regular Certificates (except the Class X Certificate),
the Certificate Balance thereof plus for each such Class and the Class X
Certificate accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02 and (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 Additional Termination Requirements.
In the event the applicable Servicer or both Servicers exercise
their purchase option with respect to the Mortgage Loans as provided in Section
9.01, the Trust Fund shall be terminated in accordance with the following
additional requirements, unless the Trustee has been supplied with an Opinion of
Counsel, at the expense of the applicable Servicer or the Servicers, as the case
may be, to the effect that the failure to comply with the requirements of this
Section 9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" on either the Lower Tier REMIC or the Upper Tier REMIC as defined
in Section 860F of the Code, or (ii) cause either the Lower Tier REMIC or the
Upper Tier REMIC to fail to qualify as a REMIC at any time that any Certificates
are outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to
the Servicer or the applicable Servicers, as the case may be, and, within 90
days of such sale, shall distribute to the Certificateholders the proceeds of
such sale in complete liquidation of each of the Lower Tier REMIC and the Upper
Tier REMIC.
(b) The Trustee shall attach a statement to the final federal income
tax return for each of the Lower Tier REMIC and the Upper Tier REMIC stating
that pursuant to Treasury Regulations Section 1.860F-1, the first day of the
90-day liquidation period for each such REMIC was the date on which the Trustee
sold the assets of the Trust Fund to the applicable Servicer or the Servicers,
as the case may be.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor,
the Servicers and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor or the Servicers, (iv) to add any other provisions with respect to
matters or questions arising hereunder or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement; provided
that any action pursuant to clauses (iv) or (v) above shall not, as evidenced by
an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; and provided, further, that the amendment
shall not be deemed to adversely affect in any material respect the interests of
the Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor and the Servicers also may
at any time and from time to time amend this Agreement, but without the consent
of the Certificateholders to modify, eliminate or add to any of its provisions
to such extent as shall be necessary or helpful to (i) maintain the
qualification of the Lower Tier REMIC and the Upper Tier REMIC under the Code,
(ii) avoid or minimize the risk of the imposition of any tax on the Lower Tier
REMIC or the Upper Tier REMIC pursuant to the Code that would be a claim at any
time prior to the final redemption of the Certificates or (iii) comply with any
other requirements of the Code; provided that the Trustee has been provided an
Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the Trust
Fund, to the effect that such action is necessary or helpful to, as applicable,
(i) maintain such qualification, (ii) avoid or minimize the risk of the
imposition of such a tax or (iii) comply with any such requirements of the Code.
This Agreement may be also amended from time to time by the
Depositor, the Servicers and the Trustee without the consent of any of the
Certificateholders (a) to add as a party to this Agreement any Originator for
the purpose of setting forth in this Agreement its obligations under the
applicable Assignment Agreement with respect to representations and warranties
and remedies for breach thereof and (b) in connection therewith to modify
certain of the Depositor's representations and warranties under Section 2.03(b)
so that such representations and warranties no longer relate to such
Originator's Mortgage Loans. Any amendment described in this paragraph shall be
deemed by the parties hereto not to adversely affect in any material respect the
interests of any Certificateholder.
This Agreement may also be amended from time to time by the
Depositor, the Servicers and the Trustee with the consent of the Holders of
Certificates evidencing Percentage Interests aggregating not less than 662/3% of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than
662/3%, or (iii) reduce the aforesaid percentages of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement (other than any
amendment contemplated by the second preceding paragraph) unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on either the Lower Tier REMIC or the Upper Tier
REMIC or the Certificateholders or cause any such REMIC to fail to qualify as a
REMIC at any time that any Certificates are outstanding and (ii) the party
seeking such amendment shall have provided written notice to the Rating Agencies
(with a copy of such notice to the Trustee) of such amendment, stating the
provisions of the Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicers, any Certificate beneficially owned by the
Depositor shall be deemed not to be outstanding (and shall not be considered
when determining the percentage of Certificateholders consenting or when
calculating the total number of Certificates entitled to consent) for purposes
of determining if the requisite consents of Certificateholders under this
Section 10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment (other than any amendment contemplated by the second paragraph of this
Section 10.01) without receiving an Opinion of Counsel (which Opinion shall not
be an expense of the Trustee or the Trust Fund), satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Servicers at the direction and expense of
the Depositor, but only upon receipt of an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties.
It is the express intent of the parties hereto that the conveyance
(i) of the Mortgage Loans by the Depositor and (ii) of the Trust Fund by the
Depositor to the Trustee each be, and be construed as, an absolute sale thereof.
It is, further, not the intention of the parties that such conveyances be deemed
a pledge thereof. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Depositor, as the case
may be, or if for any other reason this Agreement is held or deemed to create a
security interest in either such assets, then (i) this Agreement shall be deemed
to be a security agreement within the meaning of the Uniform Commercial Code of
the State of New York and (ii) the conveyances provided for in this Agreement
shall be deemed to be an assignment and a grant by the Depositor to the Trustee,
for the benefit of the Certificateholders, of a security interest in all of the
assets transferred, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of a Servicer or the Trustee
and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
(i) Each report to Certificateholders described in Section 4.03; and
(ii) Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
All directions, demands, consents and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor or the Underwriter, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. or
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.; (b) in the case of the Servicers,
to each of the following: (i) Chase Manhattan Mortgage Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ Dunks, or such other
address as may be hereafter furnished to the other parties hereto by Chase in
writing; and (ii) The Provident Bank, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, or such other address as may be
hereafter furnished to the other parties hereto by Provident in writing; (c) in
the case of the Trustee to the Corporate Trust Office, Deutsche Bank National
Trust Company, ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Trust Administration MS03H1, or such other address as the Trustee may
hereafter furnish to the other parties hereto; and (d) in the case of each of
the Rating Agencies, the address specified therefor in the definition
corresponding to the name of such Rating Agency. Notices to Certificateholders
shall be deemed given when mailed, first class postage prepaid, to their
respective addresses appearing in the Certificate Register.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment; Sales; Advance Facilities.
Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.02, this Agreement may not be assigned by either Servicer
without the prior written consent of the Trustee and the Depositor; provided,
however, either Servicer is hereby authorized to enter into an Advance Facility
under which (l) the Servicer sells, assigns or pledges to an Advancing Person
the Servicer's rights under this Agreement to be reimbursed for any P&I Advances
or Servicing Advances and/or (2) an Advancing Person agrees to fund some or all
P&I Advances or Servicing Advances required to be made by the Servicer pursuant
to this Agreement. No consent of the Trustee, Certificateholders or any other
party is required before the Servicer may enter into an Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund P&I Advances and/or Servicing Advances on the Servicer's
behalf, the Servicer shall remain obligated pursuant to this Agreement to make
P&I Advances and Servicing Advances pursuant to and as required by this
Agreement, and shall not be relieved of such obligations by virtue of such
Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect of
P&I applicable Advances and/or Servicing Advances made with respect to the
Mortgage Loans for which the Servicer would be permitted to reimburse itself in
accordance with this Agreement, assuming the Servicer had made the related P&I
Advance(s) and/or Servicing Advance(s).
The applicable Servicer shall maintain and provide to any successor
Servicer a detailed accounting on a loan-by-loan basis as to amounts advanced
by, pledged or assigned to, and reimbursed to any Advancing Person. The
successor Servicer shall be entitled to rely on any such information provided by
the predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Sub-Servicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require
that reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan-by-loan information with
respect to each reimbursement amount distributed to such Advancing Person or
Advance Facility trustee on each Distribution Date, to enable the Advancing
Person or Advance Facility trustee to make the FIFO allocation of each
reimbursement amount with respect to each Mortgage Loan. The applicable Servicer
shall remain entitled to be reimbursed by the Advancing Person or Advance
Facility trustee for all P&I Advances and Servicing Advances funded by the
Servicer to the extent the related rights to be reimbursed therefor have not
been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 10.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor and the Servicers without the consent of any
Certificateholder, notwithstanding anything to the contrary in this Agreement
upon receipt by the Trustee of an Opinion of Counsel that such amendment has no
material adverse effect on the Certificateholders or written confirmation from
the Rating Agencies that such amendment will not adversely affect the ratings on
the Certificates. Prior to entering into an Advance Facility, the applicable
Servicer shall notify the lender under such facility in writing that: (a) the
Advances financed by and/or pledged to the lender are obligations owed to the
Servicer on a non-recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances only to the extent
provided herein, and the Trustee and the Trust are not otherwise obligated or
liable to repay any Advances financed by the lender; (b) the applicable Servicer
will be responsible for remitting to the lender the applicable amounts collected
by it as reimbursement for Advances funded by the lender, subject to the
restrictions and priorities created in this Agreement; and (c) the Trustee shall
not have any responsibility to track or monitor the administration of the
financing arrangement between the Servicer and the lender.
Section 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09 Inspection and Audit Rights.
Each Servicer agrees that, on 5 Business Days prior notice, it will
permit any representative of the Depositor or the Trustee during such Person's
normal business hours, to examine all the books of account, records, reports and
other papers of such Person relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision each
Servicer hereby authorizes said accountants to discuss with such representative
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested. Any out-of-pocket expense of a Servicer incident
to the exercise by the Depositor or the Trustee of any right under this Section
10.09 shall be borne by such Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificate holders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
[Signature Page Follows]
IN WITNESS WHEREOF, the Depositor, the Trustee and the Servicers
have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.,
as Depositor
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Associate
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Associate
CHASE MANHATTAN MORTGAGE CORPORATION,
as a Servicer
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
THE PROVIDENT BANK,
as a Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Sr. Vice President
SCHEDULE I
Mortgage Loan Schedule
SCHEDULE II
Mortgage Pass-Through Certificates,
Series 2003-HE1
Representations and Warranties of Chase Manhattan Mortgage Corporation, as
Servicer
Chase Manhattan Mortgage Corporation ("Chase") hereby makes the
representations and warranties set forth in this Schedule II to the Depositor
and the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date. Capitalized terms used but not otherwise defined in this Schedule
II shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") relating to the
above-referenced Series.
(1) The Servicer is a New Jersey corporation duly organized, validly existing
and in good standing under the laws of the state of New Jersey and is duly
authorized and qualified to transact any and all business contemplated by
this Pooling and Servicing Agreement to be conducted by Chase in any state
in which a Mortgaged Property securing an Accredited Mortgage Loan is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business
laws of any such State, to the extent necessary to ensure its ability to
enforce each Accredited Mortgage Loan and to service the Accredited
Mortgage Loans in accordance with the terms of this Pooling and Servicing
Agreement;
(2) Chase has the full power and authority to service each Accredited Mortgage
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing
Agreement and has duly authorized by all necessary action on the part of
Chase the execution, delivery and performance of this Pooling and
Servicing Agreement; and this Pooling and Servicing Agreement, assuming
the due authorization, execution and delivery thereof by the Depositor and
the Trustee, constitutes a legal, valid and binding obligation of Chase,
enforceable against Chase in accordance with its terms, except to the
extent that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing Agreement by
Chase, the servicing of the Accredited Mortgage Loans by Chase hereunder,
the consummation by Chase of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of Chase and will not (A) result in
a breach of any term or provision of the organizational documents of Chase
or (B) conflict with, result in a breach, violation or acceleration of, or
result in a default under, the terms of any other material agreement or
instrument to which Chase is a party or by which it may be bound, or any
statute, order or regulation applicable to Chase of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
Chase; and Chase is not a party to, bound by, or in breach or violation of
any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it, which materially and adversely affects or, to Chase's knowledge, would
in the future materially and adversely affect, (x) the ability of Chase to
perform its obligations under this Pooling and Servicing Agreement or (y)
the business, operations, financial condition, properties or assets of
Chase taken as a whole;
(4) Chase is an approved seller/servicer for ▇▇▇▇▇▇ ▇▇▇, an approved servicer
for ▇▇▇▇▇▇▇ Mac in good standing and is a HUD approved non-supervised
mortgagee;
(5) No litigation is pending against Chase that would materially and adversely
affect the execution, delivery or enforceability of this Pooling and
Servicing Agreement or the ability of Chase to service the Accredited
Mortgage Loans or to perform any of its other obligations hereunder in
accordance with the terms hereof;
(6) No consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by
Chase of, or compliance by Chase with, this Pooling and Servicing
Agreement or the consummation by Chase of the transactions contemplated by
this Pooling and Servicing Agreement, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the
Closing Date; and
(7) Chase has the facilities, procedures and experienced personnel necessary
for the sound servicing of mortgage loans of the same type as the
Accredited Mortgage Loans.
SCHEDULE III
Mortgage Pass-Through Certificates,
Series 2003-HE1
Representations and Warranties of The Provident Bank, as Servicer
THE PROVIDENT BANK ("Provident") hereby makes the representations
and warranties set forth in this Schedule II to the Depositor and the Trustee,
as of the Closing Date, or if so specified herein, as of the Cut-off Date.
Capitalized terms used but not otherwise defined in this Schedule II shall have
the meanings ascribed thereto in the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") relating to the above-referenced Series.
(1) Provident is an Ohio banking corporation duly organized, validly existing
and in good standing under the laws of the State of Ohio and is duly
authorized and qualified to transact any and all business contemplated by
this Pooling and Servicing Agreement to be conducted by Provident in any
state in which a Mortgaged Property securing an Aames Mortgage Loan,
Provident Mortgage Loan or New Century Mortgage Loan is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such State, to the extent necessary to ensure its ability to enforce each
Aames Mortgage Loan, Provident Mortgage Loan and New Century Mortgage
Loan, and to service the Aames Mortgage Loans, Provident Mortgage Loans
and New Century Mortgage Loans in accordance with the terms of this
Pooling and Servicing Agreement;
(2) Provident has the full power and authority to service each Aames Mortgage
Loan, Provident Mortgage Loan and New Century Mortgage Loan, and to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by this Pooling and Servicing Agreement and has
duly authorized by all necessary action on the part of Provident the
execution, delivery and performance of this Pooling and Servicing
Agreement; and this Pooling and Servicing Agreement, assuming the due
authorization, execution and delivery thereof by the Depositor and the
Trustee, constitutes a legal, valid and binding obligation of Provident,
enforceable against Provident in accordance with its terms, except to the
extent that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing Agreement by
Provident, the servicing of the Aames Mortgage Loans, Provident Mortgage
Loans and New Century Mortgage Loans by Provident hereunder, the
consummation by Provident of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of Provident and will not (A)
result in a breach of any term or provision of the organizational
documents of the Servicer or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under, the terms of
any other material agreement or instrument to which Provident is a party
or by which it may be bound, or any statute, order or regulation
applicable to Provident of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Provident; and
Provident is not a party to, bound by, or in breach or violation of any
indenture or other agreement or instrument, or subject to or in violation
of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which materially and adversely affects or, to Provident knowledge, would
in the future materially and adversely affect, (x) the ability of
Provident to perform its obligations under this Pooling and Servicing
Agreement or (y) the business, operations, financial condition, properties
or assets of Provident taken as a whole;
(4) Provident is an approved seller/servicer for ▇▇▇▇▇▇ ▇▇▇, an approved
servicer for ▇▇▇▇▇▇▇ Mac in good standing and is a HUD approved
non-supervised mortgagee;
(5) No litigation is pending against Provident that would materially and
adversely affect the execution, delivery or enforceability of this Pooling
and Servicing Agreement or the ability of Provident to service the Aames
Mortgage Loans, Provident Mortgage Loans and New Century Mortgage Loans or
to perform any of its other obligations hereunder in accordance with the
terms hereof;
(6) No consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by
Provident of, or compliance by Provident with, this Pooling and Servicing
Agreement or the consummation by Provident of the transactions
contemplated by this Pooling and Servicing Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date; and
(7) Provident covenants that it can service the Aames Mortgage Loans,
Provident Mortgage Loans and New Century Mortgage Loans in accordance with
the terms of this Pooling and Servicing Agreement.
SCHEDULE IV
Mortgage Pass-Through Certificates,
Series 2003-HE1
Representations and Warranties of The Provident Bank as to the Mortgage
Loans
(1) With respect to each Aames Mortgage Loan (unless otherwise specifically
stated below), The Provident Bank ("Provident") hereby makes the
representations and warranties set forth in this Schedule IV only to the
Depositor and the Trustee, as of the Closing Date (unless another date is
specifically stated below). Capitalized terms used but not otherwise
defined in this Schedule IV shall have the meanings ascribed thereto in
the Pooling and Servicing Agreement.
(2) Mortgage Loan Schedule. With respect to each Aames Mortgage Loan, as of
the Cut-off Date, the Provident Data Tape Information is true and correct
(but only to the extent that such information was not based upon erroneous
information provided to Provident by Aames);
(3) Payments Current. With respect to each Aames Mortgage Loan (other than the
Mortgage Loans identified on the Mortgage Loan Schedule as Mortgage Loan
numbers 0004357515, 0003768929, 0004260716, 0004358880, 0004359062,
0004743725, 0093911195, 0004078764, 0004090225, 0093221504, 0004191021,
0004296664, 0004355342, 0004383338, 0004290127, 0004491092, 0004551982,
0004726081, 0004897846, 0004993810, 0004830776, 0004646886, 0004771397,
0004794583, 0004809319, 0004312937, ▇▇▇▇▇▇▇▇▇▇, 0004975405, 0004906055,
0004933273), no payment required under the Aames Mortgage Loan is 30 days
Delinquent or more nor has any payment under such Aames Mortgage Loan been
30 days Delinquent or more at any time from and after the related Aames
Servicing Transfer Date;
(4) Original Terms Unmodified. The terms of the Mortgage Note and Mortgage
have not been impaired, waived, altered or modified by Provident (or to
its knowledge by any other Person) in any respect from and after the
related Aames Servicing Transfer Date;
(5) No Satisfaction of Mortgage. Other than with respect to any Mortgage Loan
which was subject to a Principal Prepayment in Full occurring after the
Cut-off Date but prior to the Closing Date, since the applicable Aames
Servicing Transfer Date, the Mortgage has not been satisfied, cancelled,
subordinated or rescinded by Provident (or to its knowledge by any other
Person), in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage by Provident (or to its knowledge
by any other Person), in whole or in part, nor has any instrument been
executed by Provident (or to its knowledge by any other Person) that would
effect any such release, cancellation, subordination or rescission. From
and after the related Aames Servicing Transfer Date, Provident has not
waived the performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Aames Mortgage Loan to be
in default, nor has Provident waived any default resulting from any action
or inaction by the Mortgagor;
(6) No Defaults. With respect to each Aames Mortgage Loan, other than payments
due but not yet 30 days Delinquent, to Provident's knowledge, there is no
default, breach, violation or event which would permit acceleration
existing under the Mortgage or the Mortgage Note and no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event which would
permit acceleration;
(7) Mortgaged Property Undamaged; No Condemnation Proceedings. With respect to
each Aames Mortgage Loan, to Provident's knowledge, there is no proceeding
pending or threatened for the total or partial condemnation of the
Mortgaged Property. To Provident's knowledge, the related Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty so as to affect adversely the
value of the related Mortgaged Property as security for the Aames Mortgage
Loan or the use for which the premises were intended and each related
Mortgaged Property is in good repair;
(8) Escrow Payments/Interest Rate Adjustments. Since the related Aames
Servicing Transfer Date, the servicing and collection practices used by
Provident with respect to such Aames Mortgage Loan have been in all
respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper. With
respect to escrow deposits and Escrow Payments, if any, all such deposits
and payments received by Provident are in the possession of, or under the
control of, Provident and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not
been made. All Escrow Payments have been collected in full compliance with
state and federal law and the provisions of the related Mortgage Note and
Mortgage. From and after the related Aames Servicing Transfer Date, all
Mortgage Rate adjustments (if any) have been made in strict compliance
with state and federal law and the terms of the related Mortgage Note;
(9) Other Insurance Policies. From and after the related Aames Servicing
Transfer Date, no action, inaction or event has occurred and, to
Provident's knowledge, no state of facts exists or has existed that has
resulted or will result in the exclusion from, denial of, or defense to
coverage under any insurance policy related to such Aames Mortgage Loan,
irrespective of the cause of such failure of coverage;
(10) No Violation of Environmental Laws. With respect to each Aames Mortgage
Loan, to Provident's knowledge, there is no pending action or proceeding
directly involving the related Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; to Provident's
knowledge, there is no violation of any environmental law, rule or
regulation with respect to the related Mortgaged Property; and
(11) Soldiers' and Sailors' Civil Relief Act. With respect to each Aames
Mortgage Loan, no Mortgagor has notified Provident, and Provident has no
knowledge, of any relief requested or allowed to the Mortgagor under the
Soldiers' and Sailors' Civil Relief Act of 1940 or any similar state or
local law.
SCHEDULE V
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2003-HE1
Representations and Warranties of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
ABS Capital I Inc. as to the Mortgage Loans
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. (the "Depositor") hereby makes
with respect the Mortgage Loans the following representations and warranties.
Capitalized terms used but not otherwise defined in this Schedule V shall have
the meanings ascribed thereto in the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") relating to the above-referenced Series,
among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as depositor, Chase Manhattan Mortgage
Corporation and The Provident Bank, as servicers, and Deutsche Bank National
Trust Company, as trustee.
(1) With respect to each Accredited Mortgage Loan and each representation and
warranty made by Accredited as of the date servicing with respect to such
Mortgage Loan was transferred from Accredited to Chase (each an
"Accredited Servicing Transfer Date"), to the Depositor's knowledge, no
event has occurred in the period from the applicable Accredited Transfer
Date to the Closing Date which would render such representations and
warranties to be untrue in any material respect.
(2) No Mortgage Loan is classified as (a) a "high cost" loan under the Home
Ownership and Equity Protection Act of 1994 or (b) a "high cost,"
"threshold," "covered," "predatory" or similar loan under any other
applicable state, federal or local law.
(3) Any and all requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity and
disclosure laws applicable to the Mortgage Loans have been complied with
and the consummation of the transactions contemplated hereby will not
involve the violation of any such laws or regulations.
EXHIBIT A
[[To be added to the Class A-1 Certificate while it remains a Private
Certificate.] IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED
TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER (THE "TRANSFEROR LETTER")
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
TRUSTEE RECEIVES A RULE 144A LETTER (THE "144A LETTER") IN THE FORM OF EXHIBIT I
TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF
COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE
MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, in each case as if such
Certificate were evidenced by a Physical Certificate.]
In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate.
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
Certificate No. :
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate
Balances of all
Certificates of this Class : $
CUSIP :
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1
Mortgage Pass-Through Certificates, Series 2003-HE1
[Class A-][Class M-][Class B-]
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Servicers or the Trustee referred to below or any of their
respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc., as depositor (the "Depositor"), Chase Manhattan Mortgage Corporation, as
a servicer ("Chase"), The Provident Bank, as a servicer ("Provident" and,
together with Chase, the "Servicers") and Deutsche Bank National Trust Company,
as trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
***
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By ____________________________________
Countersigned:
By__________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Date immediately preceding such Distribution
Date, provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicers and the Trustee with the consent of the Holders
of Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees. As of the Closing Date, the Trustee
designates the offices of its agent located c/o DTC Transfer Agent Services, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ Entrance, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ for purposes for
surrender, transfer and exchange.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee, nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, either Servicer individually, or both Servicers together
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
-----------------------------------------------------------------------------.
Dated:
-------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______________, or, if mailed by check, to ___________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT B
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE TITLE I EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION
4975 OF THE CODE OR A PLAN SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW
("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE
CODE, OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION
LETTER AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2002
Percentage Interest of
this Certificate
("Denomination") : 100%
CUSIP :
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1
Mortgage Pass-Through Certificates, Series 2003-HE1
Class P
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Servicers or
the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that Deutsche Bank National Trust Company, as
Indenture Trustee, is the registered owner of the Percentage Interest evidenced
by this Certificate (obtained by dividing the denomination of this Certificate
by the aggregate of the denominations of all Certificates of the Class to which
this Certificate belongs) in certain monthly distributions pursuant to a Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as depositor (the
"Depositor"), Chase Manhattan Mortgage Corporation, as a servicer ("Chase"), The
Provident Bank, as a servicer ("Provident" and, together with Chase, the
"Servicers") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purpose, or the office or agency
maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or Similar Law, or a
person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
***
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:______
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as
Trustee
By_____________________________________
Countersigned:
By_________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicers and the Trustee with the consent of the Holders
of Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees. As of the Closing Date, the Trustee
designates the offices of its agent located c/o DTC Transfer Agent Services, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ Entrance, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ for purposes for
surrender, transfer and exchange.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee, nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, either Servicer individually, or both Servicers together
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
-------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______________, or, if mailed by check, to ___________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT C
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN TWO "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (i) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(c) OF
THE AGREEMENT, OR (ii) UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR
A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS
OF SUCH A PLAN. In the event that such representation is violated, or any
attempt IS MADE to transfer to a plan or arrangement subject to Section 406 of
ERISA, a plan subject to Section 4975 of the Code OR A PLAN SUBJECT TO SIMILAR
LAW, or a person acting on behalf of any such plan or arrangement or using the
assets of any such plan or arrangement, such attempted transfer or acquisition
shall be void and of no effect.
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2002
Percentage Interest of : 100%
this Certificate
("Denomination")
CUSIP :
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1
Mortgage Pass-Through Certificates, Series 2003-HE1
Class R
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicers or the Trustee referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated is the
registered owner of the Percentage Interest specified above of any monthly
distributions due to the Class R Certificates pursuant to a Pooling and
Servicing Agreement dated as of the Cut-Off Date specified above (the
"Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as depositor (the
"Depositor"), Chase Manhattan Mortgage Corporation, as a servicer ("Chase"), The
Provident Bank, as a servicer ("Provident" and, together with Chase, the
"Servicers") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in California.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is
not a Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:______
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as
Trustee
By ____________________________________
Countersigned:
By__________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicers and the Trustee with the consent of the Holders
of Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees. As of the Closing Date, the Trustee
designates the office of its agent located c/o DTC Transfer Agent Services, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ Entrance, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ for purposes of
transfer exchange or surrender.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee, nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, either Servicer individually, or both Servicers
together, will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
-------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______________, or, if mailed by check, to ___________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON ACTING ON BEHALF OF OR INVESTING
PLAN ASSETS OF ANY SUCH PLAN, OTHER THAN AN INSURANCE COMPANY WHICH IS
PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY
GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(E) OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60")) UNDER SUCH CONDITIONS THAT THE
PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I AND III OF
PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE REPRESENTATION
LETTER OR THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : June 1 2003
First Distribution Date : July 25, 2002
Percentage Interest of this
Certificate ("Denomination") : 100%
CUSIP :
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1
Mortgage Pass-Through Certificates, Series 2003-HE1
Class X
evidencing a percentage interest in the distributions allocable
to the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Servicers or
the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that Deutsche Bank National Trust Company, as
Indenture Trustee, is the registered owner of the Percentage Interest evidenced
by this Certificate (obtained by dividing the denomination of this Certificate
by the aggregate of the denominations of all Certificates of the Class to which
this Certificate belongs) in certain monthly distributions pursuant to a Pooling
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc., as depositor (the
"Depositor"), Chase Manhattan Mortgage Corporation, as a servicer ("Chase"), The
Provident Bank, as a servicer ("Provident" and, together with Chase, the
"Servicers") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Certificate Balance or Pass-Through
Rate and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code or any materially similar provisions of applicable Federal, state or local
law ("Similar Law") or a person acting on behalf of or investing plan assets of
any such plan, which representation letter shall not be an expense of the
Trustee, or (ii) if the purchaser is an insurance company, a representation that
the purchaser is an insurance company which is purchasing such Certificates with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificates are covered
under Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to Similar
Law, or a trustee of any such plan or any other person acting on behalf of any
such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee and the Servicer, which Opinion
of Counsel shall not be an expense of the Trustee, the Servicer or the Trust
Fund, addressed to the Trustee, to the effect that the purchase or holding of
such Certificate will not result in the assets of the Trust Fund being deemed to
be "plan assets" and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee or the Servicer to any obligation
in addition to those expressly undertaken in this Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
***
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:______
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as
Trustee
By ____________________________________
Countersigned:
By__________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS CAPITAL I INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1 Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicers and the Trustee with the consent of the Holders
of Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees. As of the Closing Date, the Trustee
designates the offices of its agent located c/o DTC Transfer Agent Services, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ Entrance, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ for purposes for
surrender, transfer and exchange.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers and the Trustee and any agent of the
Depositor or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Trustee, nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, either Servicer individually, or both Servicers
together, will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and
hereby authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
------------------------------------------------------------------------------.
Dated:
--------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______________, or, if mailed by check, to ___________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicers]
[Originators]
-------------
-------------
Re: Pooling and Servicing Agreement among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc., as Depositor, Chase Manhattan Mortgage Corporation, as a
Servicer, The Provident Bank, as a Servicer and Deutsche Bank
National Trust Company, as Trustee, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Trust, Series 2003-HE1
--------------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan listed
in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse";
and
(ii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Notwithstanding anything herein to the contrary, the Trustee has made no
determination and makes no representations as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so endorsing,
as Noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:_______________________________
Title:______________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION AND EXCEPTION REPORT OF TRUSTEE
[date]
[Depositor]
[Servicers]
[Originators]
-------------
-------------
Re: Pooling and Servicing Agreement among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc., as Depositor, Chase Manhattan Mortgage Corporation, as a
Servicer, The Provident Bank, as a Servicer and Deutsche Bank
National Trust Company, as Trustee, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I
Inc. Trust, Series 2003-HE1
--------------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form
provided in Section 2.01 of the Pooling and Servicing Agreement; or, if
the Depositor has certified or the Trustee otherwise knows that the
related Mortgage has not been returned from the applicable recording
office, a copy of the assignment of the Mortgage (excluding information to
be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from
the originator to the last endorsee.
(v) The original or duplicate original lender's title policy and all
riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy
thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1) solely with
respect to the Mortgage Loan number, (2), (7), and (9) of the Mortgage Loan
Schedule and items (1), (9) and (17) of the Data Tape Information accurately
reflects information set forth in the Custodial File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Trustee makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:_______________________________
Title:______________________________
EXHIBIT G
TRANSFER AFFIDAVIT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust 2003-HE1,
Mortgage Pass-Through Certificates,
Series 2003-HE1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
(1) The undersigned is an officer of ___________________, the proposed
Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by and among ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ABS Capital I Inc., as depositor (the "Depositor"), Chase
Manhattan Mortgage Corporation, as a servicer ("Chase"), The Provident
Bank, as a servicer ("Provident" and, together with Chase, the
"Servicers") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). Capitalized terms used, but not defined herein or in Exhibit 1
hereto, shall have the meanings ascribed to such terms in the Agreement.
The Transferee has authorized the undersigned to make this affidavit on
behalf of the Transferee for the benefit of the Depositor and the Trustee.
(2) The Transferee is, as of the date hereof, and will be, as of the date of
the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee
has no knowledge that any such affidavit is false.
(3) The Transferee has been advised of, and understands that (i) a tax will be
imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent;
and (iii) the Person otherwise liable for the tax shall be relieved of
liability for the tax if the subsequent Transferee furnished to such
Person an affidavit that such subsequent Transferee is a Permitted
Transferee and, at the time of Transfer, such Person does not have actual
knowledge that the affidavit is false.
(4) The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any
period with respect to which the record holder furnishes to the
pass-through entity an affidavit that such record holder is a Permitted
Transferee and the pass-through entity does not have actual knowledge that
such affidavit is false. (For this purpose, a "pass-through entity"
includes a regulated investment company, a real estate investment trust or
common trust fund, a partnership, trust or estate, and certain
cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for
another Person.)
(5) The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding
the Transfer and mandatory sales. The Transferee expressly agrees to be
bound by and to abide by the provisions of Section 5.02(c) of the
Agreement and the restrictions noted on the face of the Certificate. The
Transferee understands and agrees that any breach of any of the
representations included herein shall render the Transfer to the
Transferee contemplated hereby null and void.
(6) The Transferee agrees to require a Transfer Affidavit from any Person to
whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will
not Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in
the form set forth as Exhibit H to the Agreement (a "Transferor
Certificate") to the effect that, among other things, such Transferee has
no actual knowledge that the Person to which the Transfer is to be made is
not a Permitted Transferee.
(7) The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the
Certificate. The Transferee has historically paid its debts as they have
come due and intends to pay its debts as they come due in the future. The
Transferee intends to pay all taxes due with respect to the Certificate as
they become due.
(8) The Transferee's taxpayer identification number is __________.
(9) The Transferee is a U.S. Person as defined in Code Section 7701(a)(30).
(10) The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
(11) The Transferee will not cause income from the Residual Certificate to be
attributable to a foreign permanent establishment or fixed base, within
the meaning of an applicable income tax treaty, of the Transferee or any
other U.S. Person.
(12) Check the applicable paragraph:
[_] The present value of the anticipated tax liabilities
associated with holding the Certificate, as applicable, does
not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates
losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[_] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to
which income from the Certificate will only be taxed in the
United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Transferee within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury
Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions
(including, but not limited to, borrowing and investment
rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Transferee) that it has determined in good faith.
[_] None of the above.
(13) The Transferee is not an employee benefit plan that is subject to Title I
of ERISA or a plan that is subject to Section 4975 of the Code or a plan
subject to any Federal, state or local law that is substantially similar
to Title I of ERISA or Section 4975 of the Code, and the Transferee is not
acting on behalf of or investing plan assets of such a plan.
***
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this day of , 20__.
_____________________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this day of , 20__.
_______________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company,
as Trustee,
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2003-HE1, Mortgage
Pass-Through Certificates, Series 2003-HE1, Class________________
--------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is not a Permitted Transferee, (ii) we have conducted a
reasonable investigation of this financial condition of this Transferee and have
no reason to believe that the Transferee will not pay all taxes with respect to
the Residual Certificate as they become due and (iii) we have no reason to
believe that the statements made in The Transfer Affidavit are false.
Very truly yours,
_________________________________________
Print Name of Transferor
By:____________________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Deutsche Bank National Trust Company,
as Trustee,
▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc. Trust, Series 2003-HE1, Mortgage
Pass-Through Certificates, Series 2003-HE1, Class
--------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class A-1 Certificate
or we are not an employee benefit plan that is subject to the Employee
Retirement Income Security Act of 1974, as amended, or a plan or arrangement
that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan or arrangement nor using
the assets of any such plan or arrangement to effect such acquisition or, with
respect to a Class X Certificate, the purchaser is an insurance company that is
purchasing this certificate with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
(f) to the extent that the Certificate transferred is a Class X Certificate, we
are a bankruptcy-remote entity and (g) we are a "qualified institutional buyer"
as that term is defined in Rule 144A under the Securities Act and have completed
either of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. We are aware that the sale to us is being made in reliance on Rule
144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $ 1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business of
which is substantially confined to banking and is
supervised by the State or territorial banking commission
or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution, which
is supervised and examined by a State or Federal authority
having supervision over any such institutions or is a
foreign savings and loan association or equivalent
institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
--------
1 Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency
of a State, territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of
the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_______________________________________
Print Name of Transferor
By:____________________________________
Name:
Title:
Date:__________________________________
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
____ The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
_______________________________________
Print Name of Transferor
By:____________________________________
Name:
Title:
IF AN ADVISER:
_______________________________________
Print Name of Buyer
Date:__________________________________
EXHIBIT J
REQUEST FOR RELEASE
(for Trustee)
To: [Address]
Re:
In connection with the administration of the Mortgage Loans held by
you as the Trustee on behalf of the Certificateholders, we request the release,
and acknowledge receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Send Custodial File to:
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Company hereby certifies that all
amounts received in connection therewith have been credited to its
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of the Pooling
and Servicing Agreement. (The Company hereby certifies that the
repurchase price has been credited to Collection Account as provided
in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated By _________________. (The Company hereby
certifies that all proceeds of foreclosure, insurance, condemnation or
other liquidation have been finally received and credited to its
Collection Account pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).______________________________________________________
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Trustee, please acknowledge your receipt by signing in
the space indicated below, and returning this form.
[SERVICER]
By:____________________________________
Name:
Title:
Date:
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each
of the following items, which shall be available for inspection by the Purchaser
and which shall be retained by the applicable Servicer or delivered to and
retained by the Trustee, as applicable:
(i) The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _____________, without
recourse" and signed in the name of the last endorsee by an
authorized officer. To the extent that there is no room on the face
of a Mortgage Note for endorsements, the endorsement may be
contained on an allonge, if state law so allows and the Trustee is
so advised by the applicable Originator (pursuant to the applicable
Purchase Agreement) that state law so allows.
(ii) The original of any guaranty executed in connection with
the Mortgage Note.
(iii) The original Mortgage with evidence of recording thereon
or a certified true copy of such Mortgage submitted for recording.
If, in connection with any Mortgage Loan, the original Mortgage
cannot be delivered with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such
public recording office retains the original recorded Mortgage, the
Trustee shall notify the applicable Originator, as required under
the applicable Purchase Agreement, to deliver or cause to be
delivered to the Trustee, a photocopy of such Mortgage, together
with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the applicable Originator or a
certificate from an escrow company, a title company or closing
attorney stating that such Mortgage has been dispatched to the
appropriate public recording office for recordation and that the
original recorded Mortgage or a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the
original recorded Mortgage will be promptly delivered to the Trustee
upon receipt thereof by the applicable Originator; or (ii) in the
case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage.
(iv) The originals of all assumption, modification,
consolidation or extension agreements, with evidence of recording
thereon.
(v) The original Assignment of Mortgage for each Mortgage Loan
endorsed in blank.
(vi) The originals of all intervening assignments of mortgage
(if any) evidencing a complete chain of assignment from the
applicable originator to the last endorsee with evidence of
recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost
or if such public recording office retains the original recorded
assignments of mortgage, the Trustee shall notify the applicable
Originator to deliver, as required under the applicable Purchase
Agreement, a photocopy of such intervening assignment, together with
(i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the applicable Originator or a certificate
from an escrow company, a title company or a closing attorney
stating that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for
recordation and that such original recorded intervening assignment
of mortgage or a copy of such intervening assignment of mortgage
certified by the appropriate public recording office to be a true
and complete copy of the original recorded intervening assignment of
mortgage will be promptly delivered to the Trustee upon receipt
thereof by the applicable Originator; or (ii) in the case of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public
recording office, a copy of such intervening assignment certified by
such public recording office to be a true and complete copy of the
original recorded intervening assignment.
(vii) The original mortgagee title insurance policy or
attorney's opinion of title and abstract of title, or, in the event
such original title policy is unavailable, a certified true copy of
the related policy binder or commitment for title certified to be
true and complete by the title insurance company.
(viii) The original of any security agreement, chattel
mortgage or equivalent document executed in connection with the
Mortgage (if provided).
(ix) Residential loan application.
(x) Mortgage Loan closing statement.
(xi) Verification of employment and income, if applicable.
(xii) Verification of acceptable evidence of source and amount
of downpayment.
(xiii) Credit report on Mortgagor.
(xiv) Residential appraisal report.
(xv) Photograph of the Mortgaged Property.
(xvi) Survey of the Mortgaged Property.
(xvii) Copy of each instrument necessary to complete
identification of any exception set forth in the exception schedule
in the title policy, i.e., map or plat, restrictions, easements,
sewer agreements, home association declarations, etc.
(xviii) All required disclosure statements.
(xix) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(xx) Sales Contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc. Trust 2003-HE1 (the "Trust"), Mortgage
Pass-Through Certificates, Series 2003-HE1, issued pursuant to the
Pooling and Servicing Agreement, dated as of June 1, 2003 (the
"Pooling and Servicing Agreement"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital
I Inc., as depositor (the "Depositor"), Chase Manhattan Mortgage
Corporation, as Servicer, The Provident Bank, as servicer (the
"Servicers") and Deutsche Bank National Trust Company, as trustee
(the "Trustee")
--------------------------------------------------------------------
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K (the "Annual Report"),
and all reports on Form 8-K containing distribution reports (collectively
with this Annual Report, the "Reports") filed in respect of periods
included in the year covered by this Annual Report, of the Trust;
2. Based on my knowledge, the information in the Reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by this Annual Report;
3. Based on my knowledge, the distribution or servicing information required
to be provided to the Trustee by each Servicer under the Pooling and
Servicing Agreement, for inclusion in the Reports is included in the
Reports;
4. Based on my knowledge and upon the annual compliance statement included in
this Annual Report and required to be delivered to the Trustee in
accordance with the terms of the Pooling and Servicing Agreement, and
except as disclosed in the Reports, each Servicer has fulfilled its
obligations under the Pooling and Servicing Agreement; and
5. The Reports disclose all significant deficiencies relating to the
applicable Servicer's compliance with the minimum servicing standards
based upon the report provided by an independent public accountant, after
conducting a review in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar procedure, as set forth in the
Pooling and Servicing Agreement, that is included in the Reports.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Trustee and each of
the Servicers.
Date: _________________________
_______________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF CERTIFICATION TO BE
PROVIDED BY THE TRUSTEE TO DEPOSITOR
Re: MorganStanley Capital I Inc. Trust 2003-HE1 (the "Trust"), Mortgage
Pass-Through Certificates, Series 2003-HE1, issued pursuant to the
Pooling and Servicing Agreement, dated as June 1, 2003 (the "Pooling
and Servicing Agreement"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.,
as depositor (the "Depositor"), Chase Manhattan Mortgage
Corporation, as servicer, The Provident Bank, as servicer (the
"Servicers") and Deutsche Bank National Trust Company, as trustee
(the "Trustee")
--------------------------------------------------------------------
I, [identify the certifying individual], certify to the Depositor, and its
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the fiscal year
[___] (the "Annual Report"), and all reports on Form 8-K containing
distribution reports filed in respect of periods included in the
year covered by the Annual Report (collectively with the Annual
Report, the "Reports"), of the Trust;
2. To the best of my knowledge, the information in the Reports, taken
as a whole, does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were
made, not misleading as of the last day of the period covered by the
Annual Report; and
3. To the best of my knowledge, the distribution or servicing
information required to be provided to the Trustee by each Servicer
under the Pooling and Servicing Agreement for inclusion in the
Reports is included in the Reports.
Date: _________________________
_______________________________
[Signature]
[Title]
EXHIBIT N
FORM OF CERTIFICATION TO BE
PROVIDED BY EACH SERVICER TO DEPOSITOR
Re: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc. Trust 2003-HE1 (the "Trust"), Mortgage
Pass-Through Certificates, Series 2003-HE1, issued pursuant to the
Pooling and Servicing Agreement, dated as June 1, 2003 (the "Pooling
and Servicing Agreement"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ABS Capital I Inc.,
as depositor (the "Depositor"), Chase Manhattan Mortgage
Corporation, as servicer ("Chase"), The Provident Bank, as servicer
("Provident") and Deutsche Bank National Trust Company, as trustee
(the "Trustee")
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[Chase][Provident], certifies to the Depositor and the Trustee, and their
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
1. Based on our knowledge, the information prepared by
[Chase][Provident] and relating to the mortgage loans serviced by
[Chase][Provident] pursuant to the Pooling And Servicing Agreement
and provided by [Chase][Provident] to the Trustee in its reports to
the Trustee is accurate and complete in all material respects as of
the last day of the period covered by such report;
2. Based on our knowledge, the servicing information required to be
provided to the Trustee by [Chase][Provident] pursuant to the
Pooling and Servicing Agreement has been provided to the Trustee;
3. Based upon the review required under the Pooling and Servicing
Agreement, and except as disclosed in its annual compliance
statement required to be delivered pursuant to the Pooling and
Servicing Agreement, [Chase][Provident] as of the last day of the
period covered by such annual compliance statement has fulfilled its
obligations under the Pooling and Servicing Agreement; and
4. [Chase][Provident] has disclosed to its independent auditor, who
issues the independent auditor's report on the Uniform Single
Attestation Program for Mortgage Bankers for [Chase][Provident], any
significant deficiencies relating to [Chase][Provident]'s compliance
with minimum servicing standards.
[CHASE MANHATTAN MORTGAGE CORPORATION][THE PROVIDENT BANK]
Date: _________________________
_______________________________
[Signature]
[Title]