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Equity One ABS, Inc.
Depositor
Equity One, Inc. (DE)
A Seller and the Servicer
---------------------, ---------------------,
---------------------, ---------------------, ---------------------,
--------------------- and ---------------------,
Sellers
and
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Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of
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MORTGAGE PASS-THROUGH CERTIFICATES, SERIES
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT.............................................................................................1
ARTICLE I DEFINITIONS............................................................................................3
Adjusted Mortgage Rate............................................................................................3
Adjusted Net Mortgage Rate........................................................................................3
Advance...........................................................................................................3
Agreement.........................................................................................................3
Amount Held for Future Distribution...............................................................................3
Applicable Group..................................................................................................3
Available Funds...................................................................................................3
Bankruptcy Code...................................................................................................4
Beneficial Owner..................................................................................................4
Book-Entry Certificates...........................................................................................4
Business Day......................................................................................................4
Call Option Date..................................................................................................4
Certificates......................................................................................................4
Certificate Account...............................................................................................4
Certificate Balance...............................................................................................4
Certificate Formula Principal Amount..............................................................................4
Certificate Register..............................................................................................5
Certificate Registrar.............................................................................................5
Certificateholder or Holder.......................................................................................5
Class.............................................................................................................5
Class A Certificates..............................................................................................5
Class A-___ Available Funds Shortfall.............................................................................5
Class A-___ Available Funds Shortfall.............................................................................5
Class A-___ Distributable Funds...................................................................................6
Class A-___ Distributable Funds...................................................................................6
Class A-___ Monthly Spread Account Deposit Amount.................................................................6
Class A-___ Monthly Spread Account Deposit Amount.................................................................6
Class A-___ Spread Account Deposit Amount.........................................................................6
Class A-___ Spread Account Deposit Amount.........................................................................6
Class R Certificates..............................................................................................6
Class Certificate Balance.........................................................................................6
Class Interest Shortfall..........................................................................................6
Class Unpaid Interest Amounts.....................................................................................6
Closing Date......................................................................................................7
Closing Place.....................................................................................................7
Code..............................................................................................................7
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Collateral Value..................................................................................................7
Combined Loan-to-Value Ratio......................................................................................7
Corporate Trust Office............................................................................................7
Cross-Collateralization Amount....................................................................................7
Custodial Agreement...............................................................................................7
Custodian.........................................................................................................7
Cut-off Date......................................................................................................7
Cut-Off Date Group I Principal Balance............................................................................8
Cut-Off Date Group II Principal Balance...........................................................................8
Cut-off Date Pool Principal Balance...............................................................................8
Cut-off Date Principal Balance....................................................................................8
Defective Loan....................................................................................................8
Definitive Certificates...........................................................................................8
Deleted Loan......................................................................................................8
Denomination......................................................................................................8
Depositor.........................................................................................................8
Depository........................................................................................................8
Depository Participant............................................................................................8
Determination Date................................................................................................8
Distribution Account..............................................................................................8
Distribution Account Deposit Date.................................................................................9
Distribution Date.................................................................................................9
Due Date..........................................................................................................9
Eligible Account..................................................................................................9
Equity One-Delaware...............................................................................................9
Equity One-Florida................................................................................................9
Equity One-Minnesota..............................................................................................9
Equity One-New Hampshire..........................................................................................9
Equity One-New York...............................................................................................9
Equity One-North Carolina.........................................................................................9
Equity One-Pennsylvania..........................................................................................10
Equity One-West Virginia.........................................................................................10
ERISA............................................................................................................10
Escrow Account...................................................................................................10
Event of Default.................................................................................................10
Excess Proceeds..................................................................................................10
Expense Rate.....................................................................................................10
FDIC.............................................................................................................10
FHLMC............................................................................................................10
FIRREA...........................................................................................................10
FNMA.............................................................................................................10
Group............................................................................................................10
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Group I Loans....................................................................................................10
Group II Loans...................................................................................................10
Group Principal Balance..........................................................................................11
I&I Payments.....................................................................................................11
Indirect Participant.............................................................................................11
Insurance Agreement..............................................................................................11
Insurance Policy.................................................................................................11
Insurance Proceeds...............................................................................................11
Insured Amount...................................................................................................11
Insured Expenses.................................................................................................11
Insurer..........................................................................................................11
Insurer Default..................................................................................................11
Insurer's Monthly Premium........................................................................................11
Interest Accrual Period..........................................................................................11
Interest Distribution Amount.....................................................................................12
Investment Letter................................................................................................12
Latest Possible Maturity Date....................................................................................12
Liquidated Loan..................................................................................................12
Liquidation Proceeds.............................................................................................12
Loan Losses......................................................................................................12
Loans............................................................................................................12
Loan Schedule....................................................................................................12
Majority in Interest.............................................................................................13
Monthly Statement................................................................................................13
Xxxxx'x..........................................................................................................13
Mortgage.........................................................................................................13
Mortgage File....................................................................................................13
Mortgage Note....................................................................................................13
Mortgage Rate....................................................................................................14
Mortgaged Property...............................................................................................14
Mortgagor........................................................................................................14
Net Available Funds..............................................................................................14
Net Prepayment Interest Shortfalls...............................................................................14
Nonrecoverable Advance...........................................................................................14
Notice...........................................................................................................14
Notice of Final Distribution.....................................................................................14
Officer's Certificate............................................................................................14
Opinion of Counsel...............................................................................................14
Optional Termination.............................................................................................15
Original Loan....................................................................................................15
OTS..............................................................................................................15
Outstanding......................................................................................................15
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Outstanding Loan.................................................................................................15
Ownership Interest...............................................................................................15
Pass-Through Rate................................................................................................15
Paying Agent.....................................................................................................15
Percentage Interest..............................................................................................15
Permitted Investments............................................................................................15
Permitted Transferee.............................................................................................16
Person...........................................................................................................17
Policy...........................................................................................................17
Pool Principal Balance...........................................................................................17
Preference Claim.................................................................................................17
Prepayment Interest Excess.......................................................................................17
Prepayment Interest Shortfall....................................................................................17
Prepayment Period................................................................................................18
Primary Mortgage Insurance Policy................................................................................18
Principal Prepayment.............................................................................................18
Principal Prepayment in Full.....................................................................................18
Prospectus Supplement............................................................................................18
Purchase Price...................................................................................................18
PTCE 95-60.......................................................................................................18
Qualified Insurer................................................................................................18
Rating Agency....................................................................................................19
Record Date......................................................................................................19
Refinance Loan...................................................................................................19
Relief Act.......................................................................................................19
Relief Act Reductions............................................................................................19
REMIC............................................................................................................19
REMIC Change of Law..............................................................................................19
REMIC Provisions.................................................................................................19
Remittance Amount................................................................................................19
REO Property.....................................................................................................20
Request for Release..............................................................................................20
Required Insurance Policy........................................................................................20
Responsible Officer..............................................................................................20
Rule 144A Letter.................................................................................................20
Scheduled Payment................................................................................................20
Securities Act...................................................................................................20
Sellers..........................................................................................................20
Servicer.........................................................................................................20
Servicer Advance Date............................................................................................20
Servicing Advances...............................................................................................20
Servicing Amount.................................................................................................21
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Servicing Fee....................................................................................................21
Servicing Fee Rate...............................................................................................21
Servicing Officer................................................................................................21
S&P..............................................................................................................21
Specified Spread Account Requirement.............................................................................21
Spread Account...................................................................................................22
Spread Account Draw..............................................................................................22
Spread Account Excess............................................................................................22
Startup Day......................................................................................................22
Stated Principal Balance.........................................................................................22
Step-down Date...................................................................................................22
Streamlined Documentation Loan...................................................................................22
Subservicer......................................................................................................22
Substitute Loan..................................................................................................22
Substitution Adjustment Amount...................................................................................23
Tax Matters Person...............................................................................................23
Tax Matters Person Certificate...................................................................................23
Transfer.........................................................................................................23
Transfer Affidavit...............................................................................................23
Transferor Certificate...........................................................................................23
Trustee..........................................................................................................23
Trustee Fee......................................................................................................23
Trustee Fee Rate.................................................................................................23
Trust Fund.......................................................................................................23
Voting Rights....................................................................................................23
Weighted Average Adjusted Net Mortgage Rate......................................................................24
ARTICLE II CONVEYANCE OF LOANS;
REPRESENTATIONS AND WARRANTIES...................................................................................24
SECTION 2.01. Conveyance of Loans...............................................................................24
SECTION 2.02. Acceptance by Trustee of the Loans................................................................27
SECTION 2.03. Representations, Warranties and Covenants of the Sellers and the Servicer.........................29
SECTION 2.03A. Additional Obligations of Equity One-Delaware.....................................................31
SECTION 2.04. Representations and Warranties of the Depositor as to the Loans...................................32
SECTION 2.05. Delivery of Opinion of Counsel in Connection with Substitutions...................................32
SECTION 2.06. Execution and Delivery of Certificates............................................................33
SECTION 2.07. REMIC Matters.....................................................................................33
SECTION 2.08. Covenants of the Servicer.........................................................................33
ARTICLE III ADMINISTRATION AND SERVICING OF LOANS................................................................34
SECTION 3.01. Servicer to Service Loans.........................................................................34
SECTION 3.02. Subservicing; Enforcement of the Obligations of Servicers.........................................35
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SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the Servicer................................35
SECTION 3.04. Trustee to Act as Servicer........................................................................35
SECTION 3.05. Collection of Loan Payments; Certificate Account; Distribution Account;
Spread Account....................................................................................36
SECTION 3.06. Payment of Taxes, Assessments, Hazard Insurance Premiums and Similar
Items; Escrow Accounts............................................................................39
SECTION 3.07. Access to Certain Documentation and Information Regarding the Loans...............................39
SECTION 3.08. Permitted Withdrawals from the Certificate Account and
Distribution Account..............................................................................40
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies................................................................................41
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption Agreements.........................................42
SECTION 3.11. Realization Upon Defaulted Loans; Repurchase of Certain Loans.....................................43
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files...................................................46
SECTION 3.13. Documents Records and Funds in Possession of Servicer to be Held for the
Trustee...........................................................................................46
SECTION 3.14. Servicing Compensation............................................................................47
SECTION 3.15. Access to Certain Documentation...................................................................48
SECTION 3.16. Annual Statement as to Compliance.................................................................48
SECTION 3.17. Annual Independent Public Accountants'Servicing Statement; Financial
Statements........................................................................................48
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds....................................................49
SECTION 3.19. Optional Removal of Servicer by the Insurer.......................................................49
ARTICLE IIIA SPREAD ACCOUNT; POLICY.............................................................................50
SECTION 3A.01 Establishment of Spread Account; Deposits in SpreadAccount; Permitted
Withdrawals from Spread Account...................................................................50
SECTION 3A.02 Policy............................................................................................51
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER...........................................................53
SECTION 4.01. Advances..........................................................................................53
SECTION 4.02. Priorities of Distribution........................................................................53
SECTION 4.03. Monthly Statements to Certificateholders..........................................................55
SECTION 4.04. Bloomberg Reporting...............................................................................57
ARTICLE V THE CERTIFICATES......................................................................................57
SECTION 5.01. The Certificates..................................................................................57
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange of Certificates.......................58
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.................................................63
SECTION 5.04. Persons Deemed Owners.............................................................................63
SECTION 5.05. Access to List of Certificateholders' Names and Addresses.........................................63
SECTION 5.06. Maintenance of Office or Agency...................................................................64
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ARTICLE VI THE DEPOSITOR AND THE SERVICER.......................................................................64
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer..........................................64
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer..........................................64
SECTION 6.03. Limitation on Liability of the Depositor, the Sellers, the Servicer and Others....................65
SECTION 6.04. Limitation on Resignation of Servicer.............................................................65
SECTION 6.05. Indemnification...................................................................................66
ARTICLE VII DEFAULT.............................................................................................66
SECTION 7.01. Events of Default.................................................................................66
SECTION 7.02. Trustee to Act; Appointment of Successor..........................................................68
SECTION 7.03. Notification to Certificateholders................................................................69
ARTICLE VIII CONCERNING THE TRUSTEE............................................................................70
SECTION 8.01. Duties of Trustee.................................................................................70
SECTION 8.02 Certain Matters Affecting the Trustee..............................................................71
SECTION 8.03. Trustee Not Liable for Certificates or Loans......................................................73
SECTION 8.04. Trustee May Own Certificates......................................................................73
SECTION 8.05. Trustee's Fees and Expenses.......................................................................73
SECTION 8.06. Eligibility Requirements for Trustee..............................................................74
SECTION 8.07. Resignation and Removal of Trustee................................................................74
SECTION 8.08. Successor Trustee.................................................................................75
SECTION 8.09. Merger or Consolidation of Trustee................................................................76
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.....................................................76
SECTION 8.11. Tax Matters.......................................................................................77
SECTION 8.12. Periodic Filings..................................................................................79
SECTION 8.13. Appointment of Custodians.........................................................................80
SECTION 8.14. Trustee May Enforce Claims Without Possession of Certificates.....................................80
SECTION 8.15. Suits for Enforcement.............................................................................80
ARTICLE IX TERMINATION..........................................................................................80
SECTION 9.01. Termination upon Liquidation or Purchase of all Loans.............................................80
SECTION 9.02. Final Distribution on the Certificates............................................................81
SECTION 9.03. Additional Termination Requirements...............................................................82
ARTICLE X MISCELLANEOUS PROVISIONS..............................................................................83
SECTION 10.01. Amendment........................................................................................83
SECTION 10.02. Recordation of Agreement; Counterparts...........................................................85
SECTION 10.03. Governing Law....................................................................................85
SECTION 10.04. Intention of Parties.............................................................................85
SECTION 10.05. Notices..........................................................................................87
SECTION 10.06. Severability of Provisions.......................................................................88
SECTION 10.07. Assignment.......................................................................................88
SECTION 10.08. Limitation on Rights of Certificateholders.......................................................89
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SECTION 10.09. Inspection and Audit Rights......................................................................90
SECTION 10.10. Certificates Nonassessable and Fully Paid........................................................90
SECTION 10.11. The Closing......................................................................................90
SECTION 10.12. Interpretation...................................................................................90
SECTION 10.13. Rights of the Insurer............................................................................90
SECTION 10.14. No Partnership...................................................................................91
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THIS POOLING AND SERVICING AGREEMENT, dated as of ____________, by and
among Equity One ABS, Inc., a Delaware corporation, as depositor (the
"DEPOSITOR"), Equity One, Inc., a Delaware corporation, as a seller (in such
capacity, "EQUITY ONE-DELAWARE") and as servicer (in such capacity, the
"SERVICER"), ____________, a ____________ corporation ("____________"),
____________, a ____________corporation ("____________"), ____________, a
____________ corporation ____________, a ____________ corporation
("____________"),____________, a ____________ corporation ("____________"),
____________, a ____________ corporation ____________, a ____________
corporation ("____________" and, together with ____________, ____________,
____________, ____________, ____________, ____________ and ____________, the
"SELLERS") and ____________, a ____________ corporation organized under the laws
of the State of ____________, as trustee (the "TRUSTEE").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to the
Trustee in return for the Certificates. The Trust Fund for federal income tax
purposes will consist of a single REMIC. The Certificates will represent the
entire beneficial ownership interest in the Trust Fund. The Class A Certificates
will represent the "regular interests" in the Trust Fund and the Class R
Certificates will represent the single "residual interest" in the Trust Fund.
The "latest possible maturity date" for federal income tax purposes of all
interests created hereby will be the Latest Possible Maturity Date.
The following table sets forth characteristics of the
Certificates, together with the minimum denominations and integral multiples in
excess thereof in which such Classes shall be issuable (except that one
Certificate of each Class of Certificates may be issued in a different amount
and, in addition, one Class R Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
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Integral
Initial Class Multiples
Certificate Pass-Through Minimum in Excess of
Balance Rate (1) Denomination Minimum
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Class A-____ $ % $ $
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Class A-____ $ % $ $
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Class R $ N/A $ N/A
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(1) On any Distribution Date following the Call Option Date, the Pass-Through
Rate for the Class A-____ Certificates shall be ____ % and the Pass-Through Rate
for the Class A-____ Certificates shall be ____ %.
All interest rates set forth in this Agreement are calculated based on a
year consisting of twelve 30-day months (30/360).
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ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Adjusted Mortgage Rate: As to each Loan, and at any time, the per annum
rate equal to the Mortgage Rate less the Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Loan, and at any time, the per annum
rate equal to the Mortgage Rate less the related Expense Rate.
Advance: The payment required to be made by the Servicer with respect to
any Distribution Date pursuant to Section 4.01, the amount of any such payment
being equal to the aggregate of payments of principal and interest (net of the
Servicing Fee) on the Loans that were due on such Loans' respective Due Dates in
the calendar month preceding the month of such Distribution Date and not
received as of the close of business on the Determination Date in the month of
such Distribution Date, less the aggregate amount of any such delinquent
payments that the Servicer, in its good faith judgment, has determined would not
be recoverable out of Insurance Proceeds, Liquidation Proceeds or otherwise.
Agreement: This Pooling and Servicing Agreement, together with all of the
exhibits and schedules hereto, and all amendments or supplements of any of the
foregoing.
Amount Held for Future Distribution: As to any Distribution Date and either
the Class A-___ or Class A-___ Certificates, the aggregate amount held in the
Certificate Account relating to the Applicable Group at the close of business on
the related Determination Date on account of (i) Principal Prepayments relating
to the Applicable Group received after the Prepayment Period corresponding to
such Distribution Date and Liquidation Proceeds relating to the Applicable Group
received in the month of such Distribution Date and (ii) all Scheduled Payments
due after the Applicable Group's Loans' respective Due Dates in the calendar
month preceding the month of such Distribution Date.
Applicable Group: Either the Group I Loans or the Group II Loans as the
case may be, but with respect to the Class A-___ Certificates, the Group I
Loans, and with respect to the Class A-___ Certificates, the Group II Loans.
Available Funds: As to any Distribution Date and either the Class A-___ or
Class A-___ Certificates, the sum of (a) the aggregate amount held in the
Certificate Account relating to the Applicable Group at the close of business on
the related Determination Date net of the Amount Held for Future Distribution
relating to the Applicable Group and net of amounts permitted to be withdrawn
from the Certificate Account pursuant to clauses (i)-(viii), inclusive, of
Section 3.08(a) relating to the Applicable Group and amounts permitted to be
withdrawn from
3
the Distribution Account pursuant to clauses (i)-(iii) inclusive of Section
3.08(b) relating to the Applicable Group, (b) the amount of the related Advance,
if any, relating to the Applicable Group and (c) in connection with Defective
Loans, as applicable, the aggregate of the Purchase Prices and Substitution
Adjustment Amounts relating to the Applicable Group deposited in the
Distribution Account on the related Distribution Account Deposit Date.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
amended, and related rules promulgated thereunder.
Beneficial Owner: With respect to any Book-Entry Certificate, the Person
who is the beneficial owner of such Book-Entry Certificate.
Book-Entry Certificates: The Class A Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in New York City, or in the city where the chief
executive office of the Servicer is located, are authorized or obligated by law
or executive order to be closed.
Call Option Date: The first Distribution Date following the date on which
the Optional Termination may be exercised by the Servicer.
Certificates: The Class A Certificates and the Class R Certificates in
substantially the forms attached hereto as Exhibits A and B.
Certificate Account: The separate Eligible Account created and maintained
by the Servicer pursuant to Section 3.05 with a depository institution in the
name of the Servicer for the benefit of the Trustee on behalf of
Certificateholders and the Insurer and designated "Certificate Account, Equity
One, Inc., as trustee for the registered holders of Equity One ABS, Inc.,
Mortgage Pass-Through Certificates Series ____."
Certificate Balance: With respect to any Class A Certificate at any time,
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.
Certificate Formula Principal Amount: As to any Distribution Date and with
respect to either the Class A-___ Certificates or the Class A-___ Certificates,
the sum of (a) the principal portion of each Scheduled Payment due on each Loan
in the Applicable Group on such Loan's Due Date in the calendar month preceding
the month of such Distribution Date, (b) the Stated Principal Balance of each
Loan in the Applicable Group that was repurchased by a Seller or the Servicer
pursuant to this Agreement as of such Distribution Date, (c) the Substitution
Adjustment Amount in connection with any Deleted Loan from the Applicable Group
received with respect to such Distribution Date, (d) any Insurance Proceeds or
Liquidation Proceeds allocable to recoveries of principal of Loans in the
Applicable Group that are not yet Liquidated
4
Loans received during the calendar month preceding the month of such
Distribution Date, (e) with respect to each Loan in the Applicable Group that
became a Liquidated Loan during the calendar month preceding the month of such
Distribution Date, the amount of Liquidation Proceeds allocable to principal
received during the calendar month preceding the month of such Distribution Date
with respect to such Loan, (f) all Principal Prepayments on Loans in the
Applicable Group received during the related Prepayment Period and (g) the
principal portion of any Loan Losses on Loans in the Applicable Group incurred
during the calendar month preceding the month of such Distribution Date.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificate Registrar: ____________ and its successors and, if a successor
certificate registrar is appointed hereunder, such successor.
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.
Class: All Certificates bearing the same class designation as set forth in
the Preliminary Statement.
Class A Certificates: The certificates representing the "regular interests"
in the Trust Fund, which are designated as the Class A-___ and Class A-___
Certificates.
Class A-___ Available Funds Shortfall: As to any Distribution Date, the
amount, if any, by which the amount of Available Funds relating to the Class
A-___ Certificates for such Distribution Date is less than the aggregate amount
required to be distributed to, or in respect of, the Class A-___ Certificates
pursuant to Section 4.02 (a)(i)-(v).
Class A-___ Available Funds Shortfall: As to any Distribution Date, the
amount, if any, by which the amount of Available Funds relating to the Class
A-___ Certificates for such Distribution Date is less than the aggregate amount
required to be distributed to, or in respect of, the Class A-___ Certificates
pursuant to Section 4.02(b)(i)-(v).
5
Class A-___ Distributable Funds : The sum of (i) the amount of Available
Funds relating to the Class A-___ Certificates, (ii) any Spread Account Draw for
the Class A-___ Certificates, (iii) any Insured Amounts for the Class A-___
Certificates and (iv) any Cross-Collateralization Amount for the Class A-___
Certificates.
Class A-___ Distributable Funds : The sum of (i) the amount of Available
Funds relating to the Class A-___ Certificates, (ii) any Spread Account Draw for
the Class A-___ Certificates, (iii) any Insured Amounts for the Class A-___
Certificates and (iv) any Cross-Collateralization Amount for the Class A-___
Certificates.
Class A-___ Monthly Spread Account Deposit Amount: On any Distribution
Date, the amount equal to the product of (i) 100% and (ii) the amount of the
Class A-___ Spread Account Deposit Amount as of such Distribution Date;
provided, however, that the percentage set forth in clause (i) above may be
reduced, solely at the discretion of the Insurer, at which time written notice
shall be sent to each Seller, the Trustee, the Servicer, S&P and Xxxxx'x.
Class A-___ Monthly Spread Account Deposit Amount: On any Distribution
Date, the amount equal to the product of (i) 100% and (ii) the amount of the
Class A-___ Spread Account Deposit Amount as of such Distribution Date;
provided, however, that the percentage set forth in clause (i) above may be
reduced, solely at the discretion of the Insurer, at which time written notice
shall be sent to each Seller, the Trustee, the Servicer, S&P and Xxxxx'x.
Class A-___ Spread Account Deposit Amount: As to any Distribution Date, the
amount by which (A) Class A-___ Distributable Funds exceeds (B) the sum of the
amounts distributed pursuant to Section 4.02(a)(i)-(vii).
Class A-___ Spread Account Deposit Amount: As to any Distribution Date, the
amount by which (A) Class A-___ Distributable Funds exceeds (B) the sum of the
amounts distributed pursuant to Section 4.02(b)(i)-(vii).
Class R Certificates: The certificates representing the single "residual
interest" in the Trust Fund.
Class Certificate Balance: With respect to any Class of Class A
Certificates and as to any Distribution Date, the aggregate of the Certificate
Balances of all Certificates of such Class as of such date. The Class
Certificate Balance of the Class R Certificates shall be zero.
Class Interest Shortfall: As to any Distribution Date and Class of Class A
Certificates, the amount by which the amount described in clause (i) of the
definition of Interest Distribution Amount for such Class exceeds the amount of
interest actually distributed on such Class on such Distribution Date pursuant
to such clause (i).
Class Unpaid Interest Amounts: As to any Distribution Date and any Class of
Class A Certificates, the amount by which the aggregate Class Interest
Shortfalls for such Class
6
on prior Distribution Dates exceeds the amount distributed on such Class on
prior Distribution Dates pursuant to clause (ii) of the definition of Interest
Distribution Amount.
Closing Date: ____.
Closing Place: The offices of Messrs. Stradley, Ronon, Xxxxxxx and Xxxxx,
LLP, 0000 Xxx Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collateral Value: With respect to any Loan, other than Refinance Loans, an
amount equal to the lesser of (a) the appraised value of the related Mortgaged
Property based on an appraisal obtained by the originator from an independent
fee appraiser at the time of the origination of such Loan, and (b) if the Loan
was originated either in connection with the acquisition of the Mortgaged
Property by the borrower or within one year after acquisition of the Mortgaged
Property by the borrower, the purchase price paid by such borrower for the
Mortgaged Property. In the case of Refinance Loans, the Collateral Value is the
appraised value of the Mortgaged Property based upon the appraisal obtained at
the time of refinancing.
Combined Loan-to-Value Ratio: With respect to any Loan and as to any date
of determination, the fraction, expressed as a percentage, the numerator of
which is the principal balance of such Loan at the date of origination plus, in
the case of a Second Lien Loan, the outstanding principal balance of the related
first lien mortgage loan on the date of origination of such Second Lien Loan,
and the denominator of which is the Collateral Value of the related Mortgaged
Property.
Corporate Trust Office: The designated office of the Trustee in the State
of New York at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at ________________________________
(Attention: ________________, facsimile number: ____) and which is the address
to which notices to and correspondence with the Trustee should be directed.
Cross-Collateralization Amount: As to any Distribution Date and the Class
A-___ or Class A-___ Certificates, the amount to be transferred by the Trustee
pursuant to Section 4.02(b)(vi) or Section 4.02(a)(vi), respectively.
Custodial Agreement: As defined in Section 8.12.
Custodian: As defined in Section 8.12.
Cut-off Date: ____.
7
Cut-Off Date Group I Principal Balance: $____.
Cut-Off Date Group II Principal Balance: $____.
Cut-off Date Pool Principal Balance: $____.
Cut-off Date Principal Balance: As to any Loan, the Stated Principal
Balance thereof as of the close of business on the Cut-off Date.
Defective Loan: Any Loan which is required to be repurchased pursuant to
Section 2.02 or 2.03.
Definitive Certificates: Any Certificate issued in lieu of a Book-Entry
Certificate pursuant to Section 5.02(e).
Deleted Loan: As defined in Section 2.03(c).
Denomination: With respect to each Class A 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: Equity One ABS, Inc., a Delaware corporation, or its successor
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(3) of the Uniform Commercial Code of the State of New
York.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: As to any Distribution Date, the ____ st day of each
month or, if such day is not a Business Day, the next preceding Business Day;
provided, however, that the Determination Date in each month will be at least
two Business Days preceding the related Distribution Date.
Distribution Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.05 in the name of the Trustee for the
benefit of the Certificateholders and the Insurer and designated "Distribution
Account, _________________, as trustee for the registered holders of Equity One
ABS, Inc. Mortgage Pass-Through Certificates, Series ____." Funds in the
Distribution Account shall be held uninvested in trust for the
Certificateholders and the Insurer for the uses and purposes set forth in this
Agreement.
8
Distribution Account Deposit Date: As to any Distribution Date, 9:00 a.m.
New York City Time on the Business Day immediately preceding such Distribution
Date.
Distribution Date: The ____ 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 ____, ____.
Due Date: With respect to any Loan, the date on which scheduled payments of
interest and/or principal are due thereon, which date is a set day, but not
necessarily the first day, of each month.
Eligible Account: Any of (i) an account or accounts 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 the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Trustee and to each Rating Agency, the Certificateholders have a claim with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
(a) the trust department of a federal or state chartered depository institution
or (b) a trust company, acting in its fiduciary capacity or (iv) any other
account acceptable to each Rating Agency and the Insurer, as evidenced by a
letter from such Rating Agency and Insurer to the Trustee, without reduction or
withdrawal of the then current ratings of the Certificates. Eligible Accounts
may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.
Equity One-Delaware: Equity One, Inc., a Delaware corporation.
Equity One-____: ____, a ____ corporation.
Equity One-____: ____, a ____ corporation.
Equity One-____: ____, a ____ corporation.
Equity One-____: ____, a ____ corporation.
Equity One-____: ____, a ____ corporation.
9
Equity One-____: ____, a ____ corporation.
Equity One-____: ____, a ____ corporation.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Escrow Account: The Eligible Account or Eligible Accounts established and
maintained by the Servicer pursuant to Section 3.06(a).
Event of Default: As defined in Section 7.01.
Excess Proceeds: With respect to any Liquidated Loan, the amount, if any,
by which the sum of any Liquidation Proceeds of such Loan received in the
calendar month in which such Loan became a Liquidated Loan, net of any amounts
previously reimbursed to the Servicer as Nonrecoverable Advance(s) with respect
to such Loan pursuant to Section 3.08(a)(iii), exceeds (i) the unpaid principal
balance of such Liquidated Loan as of the Due Date in the calendar month in
which such Loan became a Liquidated Loan plus (ii) accrued interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
(and not reimbursed) to Certificateholders up to the Due Date in the calendar
month in which such Loan became a Liquidated Loan.
Expense Rate: As to each Loan, the sum of the related Servicing Fee Rate,
the Trustee Fee Rate and the rate at which the Insurer's Monthly Premium
accrues.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of
1989.
FNMA: Xxxxxx Mae, a federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.
Group: Either the Group I Loans or the Group II Loans, as the case may be.
Group I Loans: The mortgage loans identified as such on the Loan Schedule.
Group II Loans: The mortgage loans identified as such on the Loan Schedule.
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Group Principal Balance: With respect to any Distribution Date and either
the Group I Loans or the Group II Loans, the aggregate of the Stated Principal
Balances of the Loans in such Group that were Outstanding Loans (including Loans
in foreclosure and REO Properties) on their Due Dates in the calendar month
preceding the month of such Distribution Date.
I&I Payments: Any payments due and owing to the Insurer under the Insurance
Agreement other than the Insurer's Monthly Premium.
Indirect Participant: A broker, dealer, bank or other financial institution
or other Person that clears through or maintains a custodial relationship with a
Depository Participant.
Insurance Agreement: The Insurance and Indemnity Agreement dated as of ____
among the Depositor, Equity One-Delaware (in its capacity as both a Seller and
the Servicer), the Trustee and the Insurer, including any amendments and
supplements thereto.
Insurance Policy: With respect to any 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: Proceeds paid by an insurer (other than the Insurer)
pursuant to any Insurance Policy, in each case other than any amount included in
such Insurance Proceeds in respect of Insured Expenses.
Insured Amount: A payment by the Insurer under the Policy.
Insured Expenses: Expenses covered by an Insurance Policy.
Insurer: ____, a ____ company organized and created under the laws of the
State of ____, and any successor thereto. -------
Insurer Default: Either (i) a continuance of any failure by the Insurer to
make a required payment under the Policy or (ii) the existence of a proceeding
in bankruptcy by or against the Insurer.
Insurer's Monthly Premium: The premium payable to the Insurer on each
Distribution Date in an amount equal to one-twelfth of the product of the per
annum rate specified in the Insurance Agreement and the aggregate Certificate
Balance of the Class A Certificates on each Distribution Date (after giving
effect to any distributions of principal to be made on the Certificates on such
Distribution Date).
Interest Accrual Period: With respect to the Class A Certificates and any
Distribution Date, the calendar month prior to the month of such Distribution
Date.
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Interest Distribution Amount: With respect to any Distribution Date and any
Class of Class A Certificates, the sum of (i) interest accrued during the
related Interest Accrual Period at the Pass-Through Rate for such Class on the
related Class Certificate Balance and (ii) any Class Unpaid Interest Amounts for
such Class.
Investment Letter: As defined in Section 5.02(b).
Latest Possible Maturity Date: The Distribution Date following the third
anniversary of the scheduled maturity date of the Loan having the latest
scheduled maturity date as of the Cut-off Date.
Liquidated Loan: With respect to any Distribution Date, a defaulted Loan
(including any REO Property) that was liquidated in a calendar month preceding
the month of such Distribution Date and as to which the Servicer has determined
(in accordance with this Agreement) that it has received all amounts it expects
to receive in connection with the liquidation of such Loan, including the final
disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted Loans, whether
through trustee's sale, foreclosure sale or otherwise or amounts received in
connection with any condemnation or partial release of a Mortgaged Property and
any other proceeds received in connection with an REO Property, less the
Servicing Amount applicable to such defaulted Loans.
Loan Losses: The aggregate amount, if any, by which (i) the outstanding
principal balance of each Loan that became a Liquidated Loan during the calendar
month preceding the month of the related Distribution Date (such principal
balance determined immediately before such Loan became a Liquidated Loan)
exceeds (ii) the Liquidation Proceeds allocable to principal received during the
calendar month preceding the month of the related Distribution Date in
connection with the liquidation of such Loan which have not theretofore been
used to reduce the Stated Principal Balance of such Loan.
Loans: Group I and Group II Loans, collectively.
Loan Schedule: The list of Group I Loans and Group II Loans (as from time
to time amended by the Servicer to reflect the addition of Substitute Loans to
the Applicable Group and the deletion of Deleted Loans from the Applicable Group
pursuant to the provisions of this Agreement) transferred to the Trustee as part
of the Trust Fund and from time to time subject to this Agreement, attached
hereto as Schedule I, setting forth the following information with respect to
each Loan:
(i) the loan number;
(ii) the Mortgagor's name and the state in which the Mortgaged Property is
located, including the zip code;
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(iii) the maturity date;
(iv) the Cut-off Date Principal Balance;
(v) the first payment date of the Loan;
(vi) lien position (either first or second);
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Mortgage Rate; and
(ix) for Group I Loans only, the principal balance of the Loan at
origination.
Such schedule shall also set forth the total of the amounts described under
(iv) above for the Group I Loans, the Group II Loans and all of the Loans.
Majority in Interest: As to any Class of Class A Certificates, the Holders
of Certificates of such Class evidencing, in the aggregate, at least 51% of the
Percentage Interests evidenced by all Certificates of such Class.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc., or any successor thereto. For
purposes of Section 10.05(b) the address for notices to Moody's shall be Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Monitoring Department, or such other address as Moody's may
hereafter furnish to the Depositor or the Servicer.
Mortgage: The mortgage, deed of trust or other instrument creating a first
or second lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Loan and any additional documents delivered to the
Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Note: The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Loan, together with any
amendment or modification thereto.
13
Mortgage Rate: The annual rate of interest borne by a Mortgage Note as set
forth therein.
Mortgaged Property: The underlying property securing a Loan.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Available Funds: As to any Distribution Date and either the Class A-___
or Class A-___ Certificates, the amount equal to Available Funds for such Class
less the amounts required to be distributed on such Distribution Date pursuant
to Section 4.02(a)(i)-(iii) or 4.02(b)(i)-(iii), respectively.
Net Prepayment Interest Shortfalls: As to any Distribution Date, the amount
by which the aggregate of Prepayment Interest Shortfalls during the calendar
month preceding the month of such Distribution Date exceeds an amount equal to
the aggregate Servicing Fee for such Distribution Date before reduction of the
Servicing Fee in respect of such Prepayment Interest Shortfalls.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Servicer that, in the good faith judgment of the
Servicer, will not be ultimately recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.
Notice: As defined in Section 3A.02.
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.
Officer's Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Servicer, or (ii), if provided for in this
Agreement, signed by a Servicing Officer, as the case may be, and delivered to
the Depositor and the Trustee, as the case may be, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor or the Servicer, including, in-house counsel, reasonably
acceptable to the Trustee and the Insurer; provided, however, that with respect
to the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor and the Servicer, (ii) not have any
direct financial interest in the Depositor or the Servicer or in any affiliate
of either, and (iii) not be connected with the Depositor or the Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
14
Optional Termination: The termination of the trust created hereunder in
connection with the purchase of the Loans pursuant to Section 9.01(a) hereof.
Original Loan: The mortgage loan refinanced in connection with the
origination of a Refinance Loan.
OTS: The Office of Thrift Supervision.
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 Loan: As of any Due Date, a 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 Loan prior
to such Due Date.
Ownership Interest: As to any Class R 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.
Pass-Through Rate: For the Class A Certificates, the per annum rates set
forth or calculated in the manner described in the Preliminary Statement.
Paying Agent: ____ and its successors and, if a successor paying agent is
appointed hereunder, such successor.
Percentage Interest: As to any Class A 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.
Permitted Investments: (i) obligations of the United States or any agency
thereof, provided such obligations are backed by the full faith and credit of
the United States; (ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency rating the Class A Certificates, or
such lower rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Class A Certificates, without taking into account
the Policy, by
15
each such Rating Agency; (iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of each such
Rating Agency, or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Class A Certificates, without
taking into account the Policy, by each such Rating Agency; (iv) certificates of
deposit, demand or time deposits, or bankers' acceptances issued by any
depository institution or trust company incorporated under the laws of the
United States or of any state thereof and subject to supervision and examination
by federal and/or state banking authorities, provided that the commercial paper
and/or long term unsecured debt obligations of such depository institution or
trust company (or in the case of the principal depository institution in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company, but only if Xxxxx'x is not a Rating Agency)
are then rated the highest long-term and one of the two highest short-term
ratings of each such Rating Agency for such securities, or such lower ratings as
will not result in the downgrading or withdrawal of the rating then assigned to
the Class A Certificates, without taking into account the Policy, by any such
Rating Agency; (v) demand or time deposits or certificates of deposit issued by
any bank or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC; (vi) guaranteed reinvestment agreements
issued by any bank, insurance company or other corporation containing, at the
time of the issuance of such agreements, such terms and conditions as will not
result in the downgrading or withdrawal of the rating then assigned to the Class
A Certificates, without taking into account the Policy, by any such Rating
Agency; (vii) repurchase obligations with respect to any security described in
clauses (i) and (ii) above, in either case entered into with a depository
institution or trust company (acting as principal) described in clause (iv)
above; (viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face amount
thereof) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof which, at
the time of such investment, have the highest long term rating and one of the
two highest short term ratings of each Rating Agency (except if the Rating
Agency is Moody's, such rating shall be the highest commercial paper rating of
Moody's for any such securities), or such lower rating as will not result in the
downgrading or withdrawal of the rating then assigned to the Class A
Certificates, without taking into account the Policy, by any such Rating Agency,
as evidenced by a signed writing delivered by each such Rating Agency; and (ix)
such other investments having a specified stated maturity and bearing interest
or sold at a discount acceptable to each Rating Agency and the Insurer as will
not result in the downgrading or withdrawal of the rating then assigned to the
Class A Certificates by any such Rating Agency, as evidenced by a signed writing
to such effect delivered by each such Rating Agency and the Insurer; provided
that no such instrument shall be a Permitted Investment if such instrument
evidences the right to receive interest only payments with respect to the
obligations underlying such instrument.
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
16
inclusions (as defined in section 860E(c)(l) of the Code) with respect to any
Class R Certificate, (iv) rural electric and telephone cooperatives described in
section 1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate whose income from sources without the United
States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States, or a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or
more United States Persons have authority to control all substantial decisions
of the trust, unless such Person has furnished the transferor and the Trustee
with a duly completed Internal Revenue Service Form 4224 and (vi) any other
Person so designated by the Depositor based upon an Opinion of Counsel that the
Transfer of an Ownership Interest in a Class R Certificate to such Person may
cause the REMIC hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and, with
the exception of the Federal Home Loan Mortgage Corporation, a majority of its
board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Policy: The Certificate Guaranty Insurance Policy (No. ____) with respect
to the Class A Certificates, and all endorsements thereto dated the Closing
Date, issued by the Insurer for the benefit of the Holders of each Class of
Class A Certificates, a copy of which is attached hereto as Exhibit K.
Pool Principal Balance: The sum of the Group Principal Balances for the
Group I Loans and the Group II Loans.
Preference Claim: As defined in Section 3A.02(e).
Prepayment Interest Excess: As to any Principal Prepayment received by the
Servicer from the first day through the fifteenth day of any calendar month
beginning in ____, ____, all amounts paid by the related Mortgagor in respect of
interest on such Principal Prepayment. All Prepayment Interest Excess shall be
paid to the Servicer as additional servicing compensation.
Prepayment Interest Shortfall: As to any Distribution Date and any
Principal Prepayment received on or after the ____ day of the month preceding
the month of such Distribution Date (or, in the case of the first Distribution
Date, on or after the Cut-off Date) and on or before the last day of the month
preceding the month of such Distribution Date, the
17
amount, if any, by which one month's interest at the related Mortgage Rate on
such Principal Prepayment, net of the Servicing Fee Rate, exceeds the amount of
interest paid in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the period from the ____ th
day of the calendar month preceding the month of such Distribution Date (or, in
the case of the first Distribution Date, from the Cut-off Date) through the ____
th day of the month of such Distribution Date.
Primary Mortgage Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Loan.
Principal Prepayment: Any payment of principal by a Mortgagor on a Loan
that is received in advance of its scheduled Due Date and is not accompanied by
an amount representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment. Partial Principal Prepayments
shall be applied by the Servicer in accordance with the terms of the related
Mortgage Note.
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire principal balance of a Loan.
Prospectus Supplement: The Prospectus Supplement dated ____ relating to the
Class A Certificates.
Purchase Price: With respect to any Loan required to be repurchased by a
Seller pursuant to Section 2.02 or 2.03 hereof or purchased at the option of the
Servicer pursuant to Section 3.11 hereof, an amount equal to the sum of (i) 100%
of the Stated Principal Balance of the Loan on the date of such purchase, and
(ii) accrued interest thereon at the applicable Mortgage Rate (or at the
applicable Adjusted Mortgage Rate if (x) the purchaser is the Servicer or (y)
the purchaser is a Seller and Equity One-Delaware is the Servicer) from the date
through which interest was last paid by the Mortgagor or advanced (and not
reimbursed) by the Servicer to the Determination Date in the month in which the
Purchase Price is to be distributed to Certificateholders.
PTCE 95-60: As defined in Section 5.02(b).
Qualified Insurer: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as a
FNMA-approved mortgage insurer and having a claims paying ability rating of at
least "AA" or equivalent rating by a nationally recognized statistical rating
organization. Any replacement
18
insurer with respect to a Loan must have at least as high a claims paying
ability rating as the insurer it replaces had on the Closing Date
Rating Agency: Moody's and S&P. If either organization or a successor
thereof 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 with the consent of the Insurer, notice of which
designation shall be given to the Trustee. References herein to a given rating
category of a Rating Agency shall mean such rating category without giving
effect to any modifiers.
Record Date: With respect to any Distribution Date for so long as the Class
A Certificates are not Definitive Certificates, the close of business on the
Business Day immediately preceding such Distribution Date. With respect to any
Distribution Date on which any Definitive Certificates are outstanding, the last
Business Day of the calendar month immediately preceding such Distribution Date.
Refinance Loan: Any Loan originated for the purpose of refinancing an
existing mortgage loan.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Reductions: With respect to any Distribution Date and any Loan
as to which there has been a reduction in the amount of interest collectible
thereon for the most recently ended calendar month as a result of the
application of the Relief Act, the amount, if any, by which (i) interest
collectible on such Loan for the most recently ended calendar month is less than
(ii) interest accrued thereon for such month pursuant to the Mortgage Note
without taking into account the application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final regulation, revenue
ruling, revenue procedure or other official announcement or interpretation
relating to REMICs and the REMIC Provisions issued after the Closing Date.
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 Amount : As to any Distribution Date and either the Class A-___
Certificates or the Class A-___ Certificates, the sum of the Interest
Distribution Amount for such Class and the Certificate Formula Principal Amount
for such Class for such Distribution Date.
19
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Loan.
Request for Release: The Request for Release submitted by the Servicer to
the Trustee, substantially in the form of Exhibit J.
Required Insurance Policy: With respect to any Loan, any insurance policy
that is required to be maintained from time to time under this Agreement.
Responsible Officer: When used with respect to the Trustee, any officer
assigned to the Corporate Trust Division of the Trustee (or any successor
thereto), including any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, any Trust Officer or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and having 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 Loan due on any Due
Date allocable to principal and/or interest on such Loan.
Second Lien Loan: Any Loan secured by a mortgage that is second in lien
priority.
Securities Act: The Securities Act of 1933, as amended.
Sellers: Collectively, the following corporations, their successors and
assigns, each in its capacity as a Seller of the Loans to the Depositor: Equity
One-Delaware; Equity One-____; Equity One-____; Equity One-____; Equity
One-____; Equity One-____; Equity One-____; and Equity One-____.
Servicer: Equity One, Inc., a Delaware corporation, and its successors and
assigns, in its capacity as servicer hereunder.
Servicer Advance Date: As to any Distribution Date, the ____ Business Day
following the end of the related Prepayment Period.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of a Mortgaged Property, (ii) the foreclosure,
trustee's sale, or other liquidation of any Mortgage or Mortgaged Property,
(iii) any expenses reimbursable to the Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, (iv) the management
and
20
liquidation of any REO Property, (v) compliance with the obligations
described in Section 3.06 and (vi) any payments made by the Servicer pursuant to
Section 3.09.
Servicing Amount: The sum of (i) the Servicing Fee, (ii) unreimbursed
Advances and (iii) unreimbursed Servicing Advances.
Servicing Fee: As to each Loan and any Distribution Date, an amount payable
out of each full payment of interest received on such Loan and equal to
one-twelfth of the Servicing Fee Rate multiplied by the Stated Principal Balance
of such Loan as of the Due Date in the month of such Distribution Date (prior to
giving effect to any Scheduled Payments due on such Loan on such Due Date),
subject to reduction as provided in Section 3.14.
Servicing Fee Rate: With respect to each Loan, ____ % per annum.
Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Loans whose name and facsimile
signature appear on a list of servicing officers furnished to the Trustee (with
a copy to the Insurer) by the Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc. For
purposes of Section 10.05(b) the address for notices to S&P shall be Standard &
Poor's, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Surveillance, or such other address as S&P may hereafter
furnish to the Depositor and the Servicer.
Specified Spread Account Requirement: As of:
(x) any date on or prior to the Step-Down Date, the greatest of (a) $____ (____
% times the Cut-off Date Pool Principal Balance); (b) the greatest of (1) the
sum of the principal balances of the three largest Loans as of such date; (2)
____ % times the Cut-off Date Pool Principal Balance; and (3) ____ % times the
aggregate principal balance of all Loans that are balloon loans, as described in
the Prospectus Supplement, with original terms of less than ____ months and (c)
two times the excess of (i) one-half the aggregate principal balance of the
Loans which are ____ or more days delinquent (including Loans in foreclosure and
REO Properties) over (ii) five times the sum of the Class A-___ Monthly Spread
Account Deposit Amount and the Class A-___ Monthly Spread Account Deposit Amount
as of such Distribution Date; and
(y) any date after the Step-Down Date, the greatest of (a) the lesser of (A)
$____ (____ % times the Cut-off Date Pool Principal Balance) and (B) ____ %
times the outstanding Pool Principal Balance as of such date; (b) the greatest
of (1) the sum of the principal balances of the three largest Loans as of such
date; (2) ____ % times the Cut-off Date Pool Principal Balance; and (3) ____ %
times the aggregate principal balance of all Loans that are balloon loans, as
described in the Prospectus Supplement, with original terms of less than ____
months; and (c) two times the excess of (i) one-half the aggregate principal
balance of the Loans which are ____ or more days
21
delinquent (including Loans in foreclosure and REO Properties) over (ii) five
times the sum of the Class A-___ Monthly Spread Account Deposit Amount and the
Class A-___ Monthly Spread Account Deposit Amount as of such Distribution Date.
Spread Account: The separate Eligible Account or Accounts created and
maintained by the Trustee pursuant to Section 3A.01 in the name of the Trustee
for the benefit of the Insurer and the Certificateholders and designated "Spread
Account, ____, as trustee for the registered holders of Equity One ABS, Inc.
Mortgage Pass-Through Certificates, Series ____." Funds in the Spread Account
shall be held in trust for the Insurer and the Certificateholders for the uses
and purposes set forth in this Agreement.
Spread Account Draw: As defined in Section 3A.01(b)(i).
Spread Account Excess: As to any Distribution Date, any amount in the
Spread Account in excess of the Specified Spread Account Requirement.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Loan, the unpaid principal balance of
such Loan as of its most recent Due Date as specified in the amortization
schedule at the time relating thereto (before any adjustment to such
amortization schedule by reason of any moratorium or similar waiver or grace
period) after giving effect to any previous partial Principal Prepayments and
Liquidation Proceeds allocable to principal (other than with respect to any
Liquidated Loan) and to the payment of principal due on such Due Date and
irrespective of any delinquency in payment by the related Mortgagor.
Step-down Date: The Distribution Date occurring on the later of (a) the
____ Distribution Date or (b) the date upon which the outstanding Pool Principal
Balance is less than ____ % of the Cut-off Date Pool Principal Balance.
Streamlined Documentation Loan: Any Loan originated pursuant to the
Seller's no income verification loan documentation program.
Subservicer: Any person to whom the Servicer has contracted for the
servicing of all or a portion of the Loans pursuant to Section 3.02.
Substitute Loan: A Loan substituted by a Seller for a Deleted Loan(s) which
must, on the date of such substitution, as confirmed in a Request for Release,
substantially in the form of Exhibit J, (i) have a Stated Principal Balance not
in excess of, and not more than ____ % less than, the Stated Principal
Balance(s) of the Deleted Loans (such Stated Principal Balances to be measured
as of the respective Due Dates in the month of substitution); (ii) have a
Mortgage Rate not lower than, and not more than ____ % per annum higher than,
that of the Deleted Loan(s); (iii) have a Combined Loan-to-Value Ratio not
higher than that of the Deleted Loan(s); (iv) have a debt to income ratio not
higher than that of the Deleted Loan(s); (v) have been
22
originated pursuant to the same underwriting standards as the Deleted Loan(s);
(vi) have a remaining term to maturity not greater than, and not more than one
year less than, that of the Deleted Loan(s); and (vii) comply, as of the date of
substitution, with each representation and warranty set forth or referred to in
Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03.
Tax Matters Person: The person designated as "tax matters person" in the
manner provided under Treasury regulation ss.1.860F-4(d) and temporary Treasury
regulation ss.301.6231(a)(7)1T. Initially, the Tax Matters Person shall be the
Trustee.
Tax Matters Person Certificate: The Class R Certificate with a Denomination
of .00001%.
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a Class R Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trustee: ____ and its successors and, if a successor trustee is appointed
hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to one-twelfth of
the Trustee Fee Rate multiplied by the Pool Principal Balance as of such
Distribution Date.
Trustee Fee Rate: With respect to each Loan, the per annum rate agreed upon
in writing on or prior to the Closing Date by the Trustee and the Depositor.
Trust Fund: The corpus of the trust created hereunder consisting of (i) the
Loans and all interest and principal received, or receivable, on or with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof and all interest and principal payments
on such Loans received prior to the Cut-off Date in respect of installments of
interest and principal due thereafter; (ii) the Certificate Account, the
Distribution Account, the Spread Account, and all amounts deposited therein
pursuant to the applicable provisions of this Agreement; (iii) property that
secured a Loan and has been acquired by foreclosure, deed-in-lieu of foreclosure
or otherwise; (iv) the Policy; and (v) all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing.
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, the
percentage of all the Voting Rights allocated to each Class of Certificates
shall be the fraction, expressed as a percentage, the
23
numerator of which is the Class Certificate Balance of such Class then
outstanding and the denominator of which is the aggregate Stated Principal
Balance of the Loans then outstanding. The Voting Rights allocated to each Class
of Certificates shall be allocated among all Holders of each such Class in
proportion to the outstanding Certificate Balances of their respective
Certificates on such date.
Weighted Average Adjusted Net Mortgage Rate: As to any Distribution Date
and either the Group I or Group II Loans, the weighted average of the Adjusted
Net Mortgage Rates of the Outstanding Loans in such Group, such weighted average
to be calculated based on the Stated Principal Balances of such Outstanding
Loans on such Distribution Date.
ARTICLE II
CONVEYANCE OF LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Loans.
(a) Subject to its substitution and repurchase obligations hereunder, each
Seller, concurrently with the execution and delivery hereof, hereby irrevocably
sells, transfers, grants, bargains, assigns, sets over and otherwise conveys to
the Depositor, without recourse, all the right, title and interest of such
Seller in and to that portion of the Loans listed on the Loan Schedule that
pertains to such Seller, including all interest and principal received or
receivable by such Seller on or with respect to such Loans after the Cut-off
Date and all interest and principal payments on such Loans received prior to the
Cut-off Date in respect of installments of interest and principal due
thereafter, but not including payments of principal and interest due and payable
on such Loans on or before the Cut-off Date. On or prior to the Closing Date,
each Seller shall deliver to the Depositor or, at the Depositor's direction, to
the Trustee or other designee of the Depositor, the Mortgage File for each Loan
listed in that portion of the Loan Schedule that pertains to such Seller. Such
delivery of the Mortgage Files shall be made against payment by the Depositor of
the purchase price, previously agreed to by such Seller and the Depositor, for
the Loans listed on the Loan Schedule that pertains to such Seller. With respect
to any Loan that does not require the first payment of principal or interest
thereon to be made on or before such Loan's Due Date in the month of the first
Distribution Date, such Seller shall deposit into the Distribution Account on or
before the Distribution Account Deposit Date relating to the first Distribution
Date, an amount equal to one month's interest at the related Adjusted Mortgage
Rate on the Cut-off Date Principal Balance of such Loan. In addition, on or
prior to the Closing Date, the Depositor shall cause the Insurer to deliver the
Policy to the Trustee.
(b) The Depositor, concurrently with the execution and delivery hereof,
hereby irrevocably sells, transfers, grants, bargains, assigns, sets over and
otherwise conveys to the Trustee for the benefit of the Insurer and the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund together with the Depositor's
24
right to require the Sellers to cure any breach of a representation or warranty
made herein by the Sellers or to repurchase or substitute for any affected Loan
in accordance herewith.
(c) In connection with the sale, transfer and assignment set forth in
clause (b) above, the Depositor has delivered or caused to be delivered to the
Trustee or a Custodian for the Trustee on or before the Closing Date or shall
deliver or cause to be delivered to the Trustee or a Custodian for the Trustee
on or before such later date as is set forth below, for the benefit of the
Insurer and the Certificateholders the following documents or instruments with
respect to each Loan so sold, transferred and assigned:
(i) the original Mortgage Note endorsed (by manual or facsimile
signature) as follows: "Pay to the order of ____ as trustee for the benefit
of the Certificateholders of Equity One ABS, Inc. Mortgage Pass-Through
Certificates Series ____ without recourse," with all intervening
endorsements and all riders and modifications showing a complete chain of
endorsement from the originator to the Person endorsing it to the Trustee
(each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in
and to that Mortgage Note);
(ii) except as provided below, the original recorded Mortgage;
(iii) an original recorded assignment of the Mortgage (which may be
included in a blanket assignment or assignments), duly executed by the
appropriate Seller and the Depositor, which assignment will not be
delivered on or before the Closing Date but shall be delivered within the
time period set forth in this Section 2.01, together with, except as
provided below, all interim recorded assignments of such Mortgage, if any,
all riders or modifications to such Mortgage, if any, (each such assignment
to be in recordable form and sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the
assignment relates, with the original to be recorded by the Servicer as
follows: the Servicer shall promptly send such assignments for recording,
and shall return the original recorded assignment to the Trustee once
returned as recorded by the applicable recording office);
(iv) the original of each assumption, modification, written assurance
or substitution agreement, if any; and
(v) except as provided below, the original or duplicate original
lender's title policy and all riders thereto.
In the event that in connection with any Loan the Depositor cannot deliver
(a) the original recorded Mortgage, (b) all interim recorded assignments or (c)
the lender's title policy (together with all riders thereto) satisfying the
requirements of clause (ii), (iii) or (v) above, respectively, concurrently with
the execution and delivery hereof because such document or
25
documents have not been returned from the applicable public recording office in
the case of clause (ii) or (iii) above, or because the title policy has not been
delivered to either the Servicer or the Depositor by the applicable title
insurer in the case of clause (v) above, and, in the case of the assignments of
the Mortgage to the Trustee as required under (iii) above, the Depositor shall
promptly deliver to the Trustee, in the case of clause (ii) or (iii) above, such
original recorded Mortgage or such original recorded assignment, as the case may
be, with evidence of recording indicated thereon upon receipt thereof from the
public recording office, or a copy thereof, certified, if appropriate, by the
relevant recording office, but in no event shall any such delivery of the
original recorded Mortgage and each such original recorded assignment or a copy
thereof, certified, if appropriate, by the relevant recording office, and each
title policy as required by clause (v) above be made later than one year
following the Closing Date; provided, however, in the event the Depositor is
unable to deliver within one year following the Closing Date each original
recorded Mortgage, and each such original recorded assignment or each such title
policy by reason of the fact that any such documents have not been returned by
the appropriate recording office, or, in the case of each such assignment,
because the related original recorded Mortgage or any related interim recorded
assignment have not been returned by the appropriate recording office or, in the
case of each title policy, because the title insurer has not received the
recording information from the appropriate recording office for such original
recorded Mortgage or original recorded assignment, has not been returned by the
appropriate recording office, the Depositor shall deliver such documents to the
Trustee as promptly as possible upon receipt thereof and, in any event, within
720 days following the Closing Date. The Depositor shall forward or cause to be
forwarded to the Trustee (a) from time to time additional original documents
evidencing an assumption or modification of a Loan and (b) any other documents
required to be delivered by the Depositor or the Servicer to the Trustee. In the
event that the original recorded Mortgage is not delivered and, in connection
with the payment in full of the related Loan, the public recording office
requires the presentation of a "lost instruments affidavit and indemnity" or any
equivalent document, because only a copy of the Mortgage can be delivered with
the instrument of satisfaction or reconveyance, the Servicer shall execute and
deliver or cause to be executed and delivered such a document to the public
recording office. In the case where a public recording office retains the
original recorded Mortgage or in the case where an original recorded Mortgage is
lost after recordation in a public recording office, the appropriate Seller
shall deliver to the Trustee a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage.
As promptly as practicable subsequent to such transfer and assignment, and
in any event, within thirty (30) days thereafter, the Servicer shall (i) affix
the Trustee's name to each assignment of Mortgage, as the assignee thereof as
Trustee for the benefit of the Certificateholders, (ii) cause such assignment to
be in proper form for recording in the appropriate public office for real
property records and (iii) cause to be delivered for recording in the
appropriate public office for real property records the assignments of the
Mortgages to the Trustee, except that, with respect to any assignments of
Mortgages as to which the information required to prepare such assignment in
recordable form has not yet been received, the Servicer's obligation to do so
and to deliver the same for such recording shall be as soon as practicable after
receipt of such information and in any event within thirty (30) days after
receipt thereof.
26
In the case of Loans that have been prepaid in full as of the Closing Date,
the Depositor, in lieu of delivering the above documents to the Trustee, will
deposit in the Certificate Account the portion of such payment that is required
to be deposited in the Certificate Account pursuant to Section 3.05 hereof.
SECTION 2.02. Acceptance by Trustee of the Loans.
The Trustee acknowledges receipt of the documents identified in the initial
certification in the form annexed hereto as Exhibit D and declares that it holds
and will hold such documents and the other documents delivered to it
constituting the Mortgage Files, and that it holds or will hold such other
assets as are included in the Trust Fund, in trust for the exclusive use and
benefit of all present and future Certificateholders and the Insurer. The
Trustee acknowledges that it will maintain possession of the Mortgage Notes in
the State of New York, unless otherwise permitted by the Rating Agencies and the
Insurer. In the event that the Trustee desires to maintain possession of the
Mortgage Notes in a state constituting one of the United States of America, the
Trustee shall, at least thirty (30) days prior to discontinuing possession of
the Mortgage Notes in the State of New York, provide (i) a Notice of such
intention to the Rating Agencies, the Insurer and the Sellers and (ii) an
Opinion of Counsel stating that such relocation of the Mortgage Notes and the
possession by the Trustee of the Mortgage Notes in such other state will not
destroy or impair the perfection by the Trustee of the security interests
assigned and granted to the Trustee pursuant to the provisions of Section 10.04.
The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Insurer, the Servicer and the Sellers an initial certification in
the form annexed hereto as Exhibit D. Based on its review and examination, and
only as to the documents identified in such initial certification, the Trustee
shall acknowledge that such documents appear regular on their face and relate to
the Loans listed in the Loan Schedule or shall indicate any noted deviations.
The Trustee, at the time of delivery of the initial certification, shall be
under no duty or obligation (i) to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face or (ii) to determine whether the
Mortgage File shall include any of the documents listed in Section 2.01(c),
except for the Mortgage Note. Should there be any exceptions to the Trustee's
initial certification, the appropriate Seller shall have thirty (30) days from
the Closing Date to cure such exception or deliver a Mortgage File or Mortgage
Files for a Substitute Loan or Substitute Loans in accordance with Section
2.03(c).
Not later than 90 days after the Closing Date, the Trustee shall deliver to
the Depositor, the Servicer and the Sellers a final certification in the form
annexed hereto as Exhibit E, with any applicable exceptions noted thereon.
If the Trustee or the Insurer finds any document constituting a part of a
Mortgage File which does not meet the requirements of Section 2.01, the Trustee
shall list such as an
27
exception in the final certification; provided, however that the Trustee shall
not make any determination 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 is sufficient to effect the assignment of and transfer to the
assignee thereof under the mortgage to which the assignment relates. In
performing any such review, the Trustee may conclusively rely on the Depositor
as to the purported genuineness of any such document and any signature thereon.
It is understood that the scope of the Trustee's review of the Mortgage Files is
limited solely to confirming that the documents listed in Section 2.01(c) have
been received and further confirming that any and all documents delivered
pursuant to Section 2.01(c) have been executed and relate to the Loans
identified in the Loan Schedule. The Trustee shall have no responsibility for
determining whether any document is valid and binding, whether the text of any
assignment or endorsement is in proper or recordable form, whether any document
has been recorded in accordance with the requirements of any applicable
jurisdiction, or whether a blanket assignment is permitted in any applicable
jurisdiction. The appropriate Seller shall promptly correct or cure such defect
within 90 days from the date it was so notified of such defect and, if such
Seller does not correct or cure such defect within such period, such Seller
shall either (a) substitute for the related Loan a Substitute Loan, which
substitution shall be accomplished in the manner and subject to the conditions
set forth in Section 2.03, or (b) purchase such Loan from the Trustee within 90
days from the date such Seller was notified of such defect in writing at the
Purchase Price of such Loan; provided, however, that in no event shall such
substitution or purchase occur more than 540 days from the Closing Date, except
that if the substitution or purchase of a Loan pursuant to this provision is
required by reason of a delay in delivery of any comments by the appropriate
recording office, and there is a dispute between either the Servicer or such
Seller and the Trustee over the location or status of the recorded document,
then such substitution or purchase shall occur within 720 days from the Closing
Date; provided, that any Loan that does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code shall be subject to a
substitution or repurchase as provided in Section 2.05(b) of this Agreement. The
Trustee shall deliver a report to each Rating Agency and the Insurer within 720
days from the Closing Date indicating a list of all documents in each Mortgage
File in the possession of the Trustee. Any such substitution pursuant to (a)
above or purchase pursuant to (b) above shall not be effected prior to the
delivery to the Trustee of the Opinion of Counsel required by Section 2.05
hereof, if any, and any substitution pursuant to (a) above shall not be effected
prior to the additional delivery to the Trustee of a Request for Release
substantially in the form of Exhibit J. No substitution is permitted to be made
in any calendar month after the Determination Date for such month. The Purchase
Price for any such Loan shall be deposited by such Seller in the Certificate
Account on or prior to the Distribution Account Deposit Date for the
Distribution Date in the month following the month of repurchase and, upon
receipt of such deposit and certification with respect thereto in the form of
Exhibit J, the Trustee shall release the related Mortgage File to such Seller
and shall execute and deliver at such Seller's request such instruments of
transfer or assignment prepared by such Seller, in each case without recourse,
as shall be necessary to vest in such Seller, or a designee, the Trustee's
interest in any Loan released pursuant hereto.
28
The Trustee shall retain possession and custody of each Mortgage File in
accordance with and subject to the terms and conditions set forth herein. The
Servicer shall promptly deliver to the Trustee, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Mortgage File as come into the possession of the Servicer from time to time.
It is understood and agreed that the obligation of the appropriate Seller
to substitute for or to purchase any Loan which does not meet the requirements
of Section 2.01 above shall constitute the sole and exclusive remedy respecting
such defect available to the Trustee, the Depositor and any Certificateholder
against any Seller.
SECTION 2.03. Representations, Warranties and Covenants of the Sellers and
the Servicer.
(a) (i) Equity One-Delaware, Equity One-____, Equity One-____, Equity
One-____, Equity One-____, Equity One-____, Equity One-____ and Equity
One-____, in their capacities as Sellers, hereby make the representations
and warranties set forth in Schedules IIA through IIH respectively, and by
this reference incorporated herein, to the Depositor, the Insurer and the
Trustee, as of the Closing Date, or if so specified therein, as of the
Cut-off Date; and
(ii) The Servicer hereby makes the representations and warranties set
forth in Schedule IIX, and by this reference incorporated herein, to the
Depositor, the Insurer and the Trustee, as of the Closing Date, or if so
specified therein, as of the Cut-Off Date.
(b) Equity One-Delaware, Equity One-____, Equity One-____, Equity One-____,
Equity One-____, Equity One-____, Equity One-____ and Equity One-____, in their
capacities as Sellers, hereby make the representations and warranties set forth
in Schedules IIIA through IIIH respectively, and by this reference incorporated
herein, to the Depositor, the Insurer and the Trustee, as of the Closing Date,
or if so specified therein, as of the Cut-off Date.
(c) Upon discovery by any of the parties hereto or the Insurer of a breach
of a representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders or the Insurer in
any Loan, the party discovering such breach shall give prompt notice thereof to
the other parties. Each Seller, for itself and not jointly and severally for all
other Sellers, hereby covenants that within 90 days of the earlier of its
discovery or its receipt of written notice from any party of a breach of any
representation or warranty made pursuant to Section 2.03(b) which materially and
adversely affects the interests of the Certificateholders or the Insurer in any
Loan listed on the Loan Schedule that pertains to such Seller, such Seller shall
cure such breach in all material respects, and if such breach is not so cured,
shall, (i) if such 90-day period expires prior to the second anniversary of the
Closing Date, remove such Loan (a "DELETED LOAN") from the Trust Fund and
substitute in its place a Substitute Loan, in the manner and subject to the
conditions set forth in this Section or
29
(ii) repurchase the affected Loan or Loans from the Trustee at the Purchase
Price in the manner set forth below; provided, however, that any such
substitution pursuant to (i) above shall not be effected prior to the delivery
to the Trustee of the Opinion of Counsel required by Section 2.05 hereof, if
any, and any such substitution pursuant to (i) above shall not be effected prior
to the additional delivery to the Trustee of a Request for Release substantially
in the form of Exhibit J and the Mortgage File for any such Substitute Loan.
Notwithstanding the preceding sentence, any Loan that does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code shall
be subject to substitution or repurchase as provided in Section 2.05(b) of this
Agreement. The appropriate Seller shall promptly reimburse the Servicer and the
Trustee for any expenses reasonably incurred by the Servicer or the Trustee in
respect of enforcing the remedies for such breach. With respect to the
representations and warranties described in this Section which are made to the
best of a Seller's knowledge, if it is discovered by either the Depositor, the
appropriate Seller or the Trustee that the substance of such representation and
warranty is inaccurate and such inaccuracy materially and adversely affects the
value of the related Loan or the interests of the Certificateholders or the
Insurer therein, notwithstanding such Seller's lack of knowledge with respect to
the substance of such representation or warranty, such inaccuracy shall be
deemed a breach by such Seller of the applicable representation or warranty.
With respect to any Substitute Loan or Loans, such Seller shall deliver to
the Trustee for the benefit of the Certificateholders and the Insurer 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 Loans in the month of substitution shall not be part of the Trust
Fund and will be retained by the appropriate Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to the relevant
Class will include the monthly payment due on any Deleted Loan from the
Applicable Group for such month and thereafter the appropriate Seller shall be
entitled to retain all amounts received in respect of such Deleted Loan. The
Servicer shall amend the Loan Schedule for the benefit of the Certificateholders
and the Insurer to reflect the removal of such Deleted Loan and the substitution
of the Substitute Loan or Loans and the Servicer shall deliver the amended Loan
Schedule to the Trustee. Upon such substitution, the Substitute Loan or Loans
shall be subject to the terms of this Agreement in all respects, and the
appropriate Seller shall be deemed to have made with respect to such Substitute
Loan or Loans, as of the date of substitution, the representations and
warranties made pursuant to Section 2.03(b). Upon any such substitution and the
deposit to the Certificate 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 and the Insurer relating to such Deleted Loan to the
appropriate Seller and shall execute and deliver at the appropriate Seller's
direction such instruments of transfer or assignment prepared by such Seller, in
each case without recourse, as shall be necessary to vest title in such Seller,
or its designee, with respect to the Trustee's interest in any Deleted Loan
substituted for pursuant to this Section 2.03.
30
For any month in which the appropriate Seller substitutes one or more
Substitute Loans for one or more Deleted Loans, the Servicer will determine the
amount (if any) by which the aggregate Stated Principal Balance of all such
Substitute Loans is less than the aggregate Stated Principal Balance of all such
Deleted Loans (such Stated Principal Balances to be measured as of the
respective Due Dates in the month of substitution). The amount of such shortage
(the "SUBSTITUTION ADJUSTMENT AMOUNT") plus an amount equal to the aggregate of
any unreimbursed Advances with respect to such Deleted Loans shall be deposited
in the Certificate Account by such Seller on or before the Distribution Account
Deposit Date for the Distribution Date in the month succeeding the calendar
month during which the related Loan became required to be purchased or replaced
hereunder.
In the event that the appropriate Seller shall have repurchased a Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.05 on or before the Distribution Account Deposit Date for the
Distribution Date in the month following the month during which such Seller
became obligated hereunder to repurchase or replace such Loan and upon such
deposit of the Purchase Price, the delivery of the Opinion of Counsel required
by Section 2.05 and receipt of a Request for Release in the form of Exhibit J,
the Trustee shall release the related Mortgage File held for the benefit of the
Certificateholders and the Insurer to such Seller, and the Trustee shall execute
and deliver at such Seller's direction such instruments of transfer or
assignment prepared by such Seller, in each case without recourse, as shall be
necessary to transfer title from the Trustee. It is understood and agreed that
the obligation under this Agreement of any Seller to cure, repurchase or replace
any Loan as to which a breach of a representation or warranty has occurred and
is continuing shall constitute the sole and exclusive remedy against such
Sellers respecting such breach of a representation and warranty available to
Certificateholders, the Depositor or the Trustee on their behalf.
The representations and warranties made pursuant to this Section 2.03 shall
survive delivery of the respective Mortgage Files to the Trustee for the benefit
of the Certificateholders and the Insurer.
Section 2.03A. Additional Obligations of Equity One-Delaware.
(a) In addition to the representations and warranties made by Equity
One-Delaware in its capacity as a Seller, as described in Section 2.03 and set
forth in Schedules IIA and IIIA, Equity One-Delaware hereby represents and
warrants to the Depositor, the Insurer and the Trustee that all of the
representations and warranties of the other Sellers described in Section 2.03
and set forth in Schedules IIB through IIH and IIIB through IIIH are true and
accurate in all respects.
(b) Equity One-Delaware hereby covenants that it shall comply with the
repurchase and substitution obligations described in Section 2.02 and 2.03 in
the event that (i) a breach of any of the representations and warranties set
forth in Schedules IIIB through IIIH
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occurs and (ii) the related Seller defaults on its repurchase and substitution
obligations under Sections 2.02 and 2.03.
SECTION 2.04. Representations and Warranties of the Depositor as to the
Loans.
The Depositor hereby represents and warrants to the Trustee and the Insurer
with respect to each Loan that as of the Closing Date, and following the
transfer of the Loans to it by the Sellers, the Depositor had good title to the
Loans and the Mortgage Notes were subject to no offsets, defenses or
counterclaims.
The Depositor, concurrently with the execution and delivery hereof, hereby
irrevocably sells, transfers, assigns, sets over, grants, bargains and otherwise
conveys to the Trustee for the benefit of the Certificateholders and the
Insurer, without recourse, all of its rights, title and interest with respect to
the Loans including, without limitation, the representations and warranties of
the Sellers made pursuant to Sections 2.03(a) and 2.03(b) hereof, together with
all rights of the Depositor to require any applicable Seller to cure any breach
thereof or to repurchase or substitute for any affected Loan in accordance with
this Agreement.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee. Upon discovery by the Depositor, the Insurer or the Trustee of a breach
of any of the foregoing representations and warranties set forth in this Section
2.04, which breach materially and adversely affects the interest of the
Certificateholders or the Insurer, the party discovering such breach shall give
prompt written notice to the other parties and to each Rating Agency.
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions.
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 or Section 2.03 shall be made more than 90
days after the Closing Date unless the appropriate Seller delivers to the
Trustee and the Insurer 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 the Trust Fund or
contributions after the Startup Day, as defined in Sections 860F(a)(2) and
860G(d) of the Code, respectively, and/or (ii) cause the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
(b) Upon discovery by the Depositor, the appropriate Seller, the Servicer,
the Insurer or the Trustee that any Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within five (5) Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require the appropriate Seller, at such
Seller's option, to either (i) substitute, if the conditions in Section 2.03(c)
with respect to substitutions are satisfied, a Substitute Loan for the affected
Loan or (ii) repurchase the affected Loan within 90
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days of such discovery in the same manner as it would repurchase a Loan for a
breach of representation or warranty made pursuant to Section 2.03. The Trustee
shall reconvey to such Seller the Loan to be released pursuant hereto in the
same manner, and on the same terms and conditions, as it would release a Loan
repurchased for breach of a representation or warranty contained in Section
2.03.
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 and in payment
therefor, 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 Certificateholders and to perform the duties set forth in this Agreement
to the best of its ability, to the end that the interests of the
Certificateholders may be adequately and effectively protected.
SECTION 2.07. REMIC Matters.
The Preliminary Statement sets forth the designations and "latest possible
maturity date" 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 "tax matters person" with respect to the Trust Fund shall be the
Trustee and the Trustee shall hold the Tax Matters Person Certificate. The Trust
Fund's fiscal year shall be the calendar year and, for the purposes of Section
860C of the Code, the taxable income of the REMIC shall be computed under an
accrual method of accounting.
SECTION 2.08. Covenants of the Servicer.
The Servicer hereby covenants to the Depositor, the Insurer and the Trustee
as follows:
(a) the Servicer shall comply in the performance of its obligations under
this Agreement with all reasonable rules and requirements of the insurer under
each Required Insurance Policy; and
(b) no written information, certificate of an officer, statement furnished
in writing or written report delivered to the Depositor, any affiliate of the
Depositor, the Insurer or the Trustee and prepared by the Servicer pursuant to
this Agreement will contain any untrue statement of a material fact or omit to
state a material fact necessary to make such information, certificate, statement
or report not misleading.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF LOANS
SECTION 3.01. Servicer to Service Loans.
For and on behalf of the Certificateholders and the Insurer, the Servicer
shall service and administer the Loans in accordance with the terms of this
Agreement and customary and usual standards of practice of prudent mortgage loan
servicers. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through Subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof, (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any Loan;
provided that the Servicer shall not take any action that is inconsistent with
or prejudices the interests of the Trust Fund, the Insurer or the
Certificateholders in any Loan or the rights and interests of the Depositor, the
Insurer, the Trustee and the Certificateholders under this Agreement. The
Servicer shall represent and protect the interests of the Trust Fund in the same
manner as it protects its own interests in mortgage loans in its own portfolio
in any claim, proceeding or litigation regarding a Loan, and shall not make or
permit any modification, waiver or amendment of any Loan which would cause the
Trust Fund to fail to qualify as a REMIC or result in the imposition of any tax
under Section 860F(a) or Section 860G(d) of the Code. Without limiting the
generality of the foregoing, the Servicer, in its own name or in the name of the
Depositor and the Trustee, is hereby authorized and empowered by the Depositor
and the Trustee, when the Servicer believes it appropriate in its reasonable
judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Loans, and with respect to the
Mortgaged Properties held for the benefit of the Certificateholders. The
Servicer shall prepare and deliver to the Depositor and/or the Trustee such
documents requiring execution and delivery by either or both of them as are
necessary or appropriate to enable the Servicer to service and administer the
Loans to the extent that the Servicer is not permitted to execute and deliver
such documents pursuant to the preceding sentence. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such documents and
deliver them to the Servicer.
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SECTION 3.02. Subservicing; Enforcement of the Obligations of Servicers.
(a) The Servicer may arrange for the subservicing of any Loan by a
Subservicer pursuant to a subservicing agreement; provided, however, that such
subservicing arrangement and the terms of the related subservicing agreement
must provide for the servicing of such Loans in a manner consistent with the
servicing arrangements contemplated hereunder. Unless the context otherwise
requires, references in this Agreement to actions taken or to be taken by the
Servicer in servicing the Loans include actions taken or to be taken by a
Subservicer on behalf of the Servicer. Notwithstanding the provisions of any
subservicing agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and liable to the Depositor, the Trustee, the Insurer and the
Certificateholders for the servicing and administration of the Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the Subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Loans. All actions of each Subservicer
performed pursuant to the related subservicing agreement shall be performed as
an agent of the Servicer with the same force and effect as if performed directly
by the Servicer.
(b) For purposes of this Agreement, the Servicer shall be deemed to have
received any collections, recoveries or payments with respect to the Loans that
are received by a Subservicer regardless of whether such payments are remitted
by the Subservicer to the Servicer.
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Servicer.
The Depositor may, but is not obligated to, enforce the obligations of the
Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Servicer hereunder and in
connection with any such defaulted obligation to exercise the related rights of
the Servicer hereunder; provided that the Servicer shall not be relieved of any
of its obligations hereunder by virtue of such performance by the Depositor or
its designee. Neither the Trustee nor the Depositor shall have any
responsibility or liability for any action or failure to act by the Servicer nor
shall the Trustee or the Depositor be obligated to supervise the performance of
the Servicer hereunder or otherwise.
SECTION 3.04. Trustee to Act as Servicer.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of the
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of the Servicer pursuant to Section 3.09 hereof or any acts or
omissions of the predecessor Servicer hereunder, (ii) obligated to make
35
Advances if it is prohibited from doing so by applicable law, (iii) obligated to
effectuate repurchases or substitutions of Loans hereunder including, but not
limited to, repurchases or substitutions of Loans pursuant to Section 2.02 or
2.03 hereof, (iv) responsible for expenses of the Servicer pursuant to Section
2.03 or (v) deemed to have made any representations and warranties of the
Servicer hereunder). Any such assumption shall be subject to Section 7.02
hereof. If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee or its successor
shall succeed to any rights and obligations of the Servicer under each
subservicing agreement.
The Servicer shall, upon request of the Trustee, but at the expense of the
Servicer, deliver to the assuming party all documents and records relating to
each subservicing agreement or substitute subservicing agreement and the Loans
then being serviced thereunder and an accounting of amounts collected or held by
it and otherwise use its best efforts to effect the orderly and efficient
transfer of the substitute subservicing agreement to the assuming party.
SECTION 3.05. Collection of Loan Payments; Certificate Account;
Distribution Account; Spread Account.
(a) The Servicer shall make reasonable efforts in accordance with the
customary and usual standards of practice of prudent mortgage servicers to
collect all payments called for under the terms and provisions of the Loans to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any related Required Insurance Policy. Consistent with the
foregoing, the Servicer may in its discretion (i) waive any late payment charge
or any prepayment charge or penalty interest in connection with the prepayment
of a Loan and (ii) extend the due dates for payments due on a Mortgage Note for
a period not greater than 180 days; provided, however, that the Servicer cannot
extend the maturity of any such Loan past the date on which the final payment is
due on the latest maturing Loan as of the Cut-off Date. In the event of any such
arrangement, the Servicer shall make Advances on the related Loan in accordance
with the provisions of Section 4.01 during the scheduled period in accordance
with the amortization schedule of such Loan without modification thereof by
reason of such arrangements. The Servicer shall not be required to institute or
join in litigation with respect to collection of any payment (whether under a
Mortgage, Mortgage Note or otherwise or against any public or governmental
authority with respect to a taking or condemnation) if it reasonably believes
that enforcing the provision of the Mortgage or other instrument pursuant to
which such payment is required is prohibited by applicable law.
(b) The Servicer shall establish and maintain a Certificate Account into
which the Servicer shall deposit or cause to be deposited within one Business
Day of receipt, except as otherwise specifically provided herein, the following
payments and collections remitted by Subservicers or received by it in respect
of the Loans subsequent to the Cut-off Date (other than in respect of principal
and interest due on the Loans on or before the Cut-off Date) and the following
amounts required to be deposited hereunder:
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(i) all payments on account of principal on the Loans, including
Principal Prepayments;
(ii) all payments on account of interest on the Loans, net of the
related Servicing Fee;
(iii) all Insurance Proceeds and Liquidation Proceeds, other than
proceeds to be applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with the Servicer's normal servicing
procedures;
(iv) any amount required to be deposited by the Servicer pursuant to
Section 3.05(d) in connection with any losses on Permitted Investments;
(v) any amounts required to be deposited by the Servicer pursuant to
Section 3.09(c) and, in respect of net monthly rental income from REO Property,
pursuant to Section 3.11 hereof;
(vi) all Substitution Adjustment Amounts;
(vii) all Advances made by the Servicer pursuant to Section 4.01; and
(viii) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Servicer shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of prepayment penalties, late payment
charges or assumption fees, if collected, need not be remitted by the Servicer.
In the event that the Servicer shall remit any amount not required to be
remitted, it may at any time withdraw or direct the institution maintaining the
Certificate Account to withdraw such amount from the Certificate Account, any
provision herein to the contrary notwithstanding. Such withdrawal or direction
may be accomplished by delivering written notice thereof to the Trustee or such
other institution maintaining the Certificate Account which describes the
amounts deposited in error in the Certificate Account. The Servicer shall
maintain adequate records with respect to all withdrawals made pursuant to this
Section. All funds deposited in the Certificate Account shall be held in trust
for the Certificateholders and the Insurer until withdrawn in accordance with
Section 3.08.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders and the Insurer, the Distribution Account. The Trustee shall,
promptly upon receipt, deposit in the Distribution Account and retain therein
the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.08(a)(ix); and
37
(ii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required to be
remitted, it may at any time direct the Trustee to withdraw such amount from the
Distribution Account, any provision herein to the contrary notwithstanding. Such
direction may be accomplished by delivering an Officer's Certificate 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 uninvested in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08. In
no event shall the Trustee incur liability for withdrawals from the Distribution
Account at the direction of the Servicer.
(d) Each institution at which the Certificate Account and the Spread
Account is maintained shall invest the funds therein as directed in writing by
the Servicer in Permitted Investments, which shall mature not later than, in the
case of the Certificate Account, the second Business Day preceding each
Distribution Account Deposit Date (except that if such Permitted Investment is
an obligation of the institution that maintains such account, then such
Permitted Investment shall mature not later than the Business Day next preceding
such Distribution Account Deposit Date) and shall not be sold or disposed of
prior to its maturity. All such Permitted Investments shall be made in the name
of the Trustee, for the benefit of the Certificateholders and the Insurer. So
long as no Event of Default shall have occurred and be continuing, all income
and gain net of any losses realized from any such investment of funds on deposit
in the Certificate Account shall be for the benefit of the Servicer as servicing
compensation and shall be remitted to it monthly as provided herein. All income
and gain net of any losses realized from Permitted Investments made with funds
on deposit in the Spread Account and, if an Event of Default shall have occurred
and be continuing, from all other Permitted Investments shall be deposited into
the Spread Account. The amount of any realized losses in the Certificate Account
or the Spread Account incurred in any such account in respect of any such
investments shall promptly be deposited by the Servicer in the Certificate
Account or remitted to the Trustee for deposit into the Spread Account, as
applicable. The Trustee in its fiduciary capacity shall not be liable for the
amount of any loss incurred in respect of any investment or lack of investment
of funds held in the Certificate Account or Spread Account and made in
accordance with this Section 3.05.
(e) The Servicer shall give notice to the Trustee, the Insurer, each
Seller, each Rating Agency and the Depositor of any proposed change of the
location of the Certificate Account prior to any change thereof. The Trustee
shall give notice to the Servicer, each Seller, each Rating Agency and the
Depositor of any proposed change of the location of the Distribution Account
prior to any change thereof.
(f) Amounts on deposit in the Spread Account may be invested in Permitted
Investments which shall mature no later than the Business Day immediately
preceding the next Distribution Date; provided, however, that amounts on deposit
in the Spread Account may mature at a later date than that set forth above, upon
receipt by the Trustee of the Insurer's
38
consent and confirmation in writing from each Rating Agency that such
investment's maturity shall not result in a downgrade of the Class A
Certificates.
SECTION 3.06. Payment of Taxes, Assessments, Hazard Insurance Premiums and
Similar Items; Escrow Accounts.
(a) The Servicer shall require Mortgagors to pay all taxes, assessments,
hazard insurance premiums, flood insurance premiums, condominium association
dues or comparable items for the account of the Mortgagors. To the extent
required by the Seller at the time the related Loan was originated and not
violative of current law, the Servicer shall establish and maintain one or more
accounts (each, an "ESCROW ACCOUNT") and deposit and retain therein all
collections from the Mortgagors (or advances by the Servicer) for the payment of
taxes, assessments, hazard insurance premiums, condominium association dues or
comparable items for the account of the Mortgagors. Nothing herein shall require
the Servicer to compel a Mortgagor to establish an Escrow Account in violation
of applicable law or if the Seller of the related Loan did not require the
establishment of an Escrow Account at the time the Loan was originated.
Withdrawals of amounts so collected from the Escrow Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
condominium association dues, or comparable items, to reimburse the Servicer out
of related collections for any payments made pursuant to Sections 3.01 hereof
(with respect to taxes and assessments and insurance premiums) and 3.09 hereof
(with respect to hazard insurance), to refund to any Mortgagors any sums
determined to be overages, to pay interest, if required by law or the terms of
the related Mortgage or Mortgage Note, to Mortgagors on balances in the Escrow
Account or to clear and terminate the Escrow Account at the termination of this
Agreement in accordance with Section 9.01 hereof. The Escrow Accounts shall not
be a part of the Trust Fund.
(b) The Servicer shall advance any payments referred to in Section 3.06(a)
that are not timely paid by the Mortgagors on the date when the tax, premium or
other cost for which such payment is intended is due, but the Servicer shall be
required so to advance only to the extent that such advances, in the good faith
judgment of the Servicer, are required to be made to protect the lien of the
Mortgage and will be recoverable by the Servicer out of Insurance Proceeds,
Liquidation Proceeds or otherwise. The amount of any such advances made by the
Servicer for the purpose of maintaining any hazard or flood insurance shall not,
for the purpose of calculating monthly distributions to the Certificateholders
or remittances to the Trustee for their benefit, be added to the principal
balance of the related Loan, notwithstanding that the terms of the Loan so
permit. Any advance made by the Servicer pursuant to this Section 3.06 shall be
recoverable as a Servicing Advance to the extent permitted by Section 3.08.
SECTION 3.07. Access to Certain Documentation and Information Regarding the
Loans.
The Servicer shall afford the Depositor, the Insurer, the Trustee and each
Rating Agency reasonable access to all records and documentation regarding the
Loans and all accounts,
39
insurance information and other matters relating to this Agreement, such access
being afforded without charge, but only upon reasonable request and during
normal business hours at the office designated by the Servicer.
Upon reasonable advance notice in writing, the Servicer will provide to
each Certificateholder which is a savings and loan association, bank or
insurance company certain reports and reasonable access to information and
documentation regarding the Loans sufficient to permit such Certificateholder to
comply with applicable regulations of the OTS or other regulatory authorities
with respect to investment in the Certificates; provided that the Servicer shall
be entitled to be reimbursed by each such Certificateholder for actual expenses
incurred by the Servicer in providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Certificate Account and
Distribution Account.
(a) The Servicer may from time to time make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously retained by
the Servicer) the servicing compensation to which it is entitled pursuant to
Section 3.14, and, subject to Section 3.05(d), to pay to the Servicer, as
additional servicing compensation, or to the Spread Account, as the case may be,
earnings on or investment income with respect to funds in or credited to the
Certificate Account;
(ii) to reimburse the Servicer for unreimbursed Advances made by it,
such right of reimbursement pursuant to this subclause (ii) being limited to
amounts received on the Loan(s) in respect of which any such Advance was made;
(iii) to reimburse the Servicer for any Nonrecoverable Advance
previously made;
(iv) to reimburse the Servicer for Insured Expenses from the related
Insurance Proceeds;
(v) to reimburse the Servicer for (a) unreimbursed Servicing Advances,
the Servicer's right to reimbursement pursuant to this clause (a) with respect
to any Loan being limited to amounts received on such Loan(s) which represent
late recoveries of the payments for which such Servicing Advances were made
pursuant to Section 3.01 or Section 3.06 and (b) for unpaid Servicing Fees as
provided in Section 3.11 hereof;
(vi) to pay to the purchaser, with respect to each Loan or property
acquired in respect thereof that has been purchased pursuant to Section 2.02,
2.03 or 3.11, all amounts received thereon after the date of such purchase;
40
(vii) to reimburse the Sellers, the Servicer or the Depositor for
expenses incurred by any of them and reimbursable pursuant to Section 6.03
hereof;
(viii) to withdraw any amount deposited in the Certificate Account and
not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit Date, to withdraw
an amount equal to the Available Funds for both the Class A-___ Certificates and
the Class A-___ Certificates for such Distribution Date and remit such amount to
the Trustee for deposit in the Distribution Account; and
(x) to clear and terminate the Certificate Account upon termination of
this Agreement pursuant to Section 9.01 hereof.
The Servicer shall keep and maintain separate accounting, on a Loan by Loan
basis, for the purpose of justifying any withdrawal from the Certificate Account
pursuant to such subclauses (i), (ii), (iv), (v) and (vi). Prior to making any
withdrawal from the Certificate Account pursuant to subclause (iii), the
Servicer shall deliver to the Trustee an Officer's Certificate of a Servicing
Officer indicating the amount of any previous Advance determined by the Servicer
to be a Nonrecoverable Advance and identifying the related Loans(s), and their
respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account for
distributions to Certificateholders in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn, the amount of any taxes that it
is authorized to withhold pursuant to the last paragraph of Section 8.11). In
addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee and certain expenses for the
related Distribution Date;
(ii) to withdraw and return to the Servicer any amount deposited in the
Distribution Account and not required to be deposited therein; and
(iii) to clear and terminate the Distribution Account upon termination
of the Agreement pursuant to Section 9.01 hereof.
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies.
(a) The Servicer shall require Mortgagors to maintain, for each Loan,
hazard insurance with extended coverage (i) in the case of a Loan secured by a
Mortgage creating a first lien on the related Mortgaged Property, in an amount
that is at least equal to the original
41
principal balance of such Loan or the maximum insurable value of the
improvements on such Mortgaged Property, whichever is less, and (ii) in the case
of a Second Lien Loan, in an amount equal to the lesser of the combined
principal balance of such Second Lien Loan and the related first lien mortgage
loan or the maximum insurable value of the improvements on the related Mortgaged
Property. Each such policy of standard hazard insurance shall contain, or have
an accompanying endorsement that contains, a standard mortgagee clause. Any
amounts collected by the Servicer under any such policies (other than the
amounts to be applied to the restoration or repair of the improvements on the
related Mortgaged Property or amounts released to the Mortgagor in accordance
with the Servicer's normal servicing procedures) shall be deposited in the
Certificate Account. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage 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 is located at the
time of origination of the Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Servicer shall require the related Mortgagor to maintain flood insurance with
respect to such Loan. Such flood insurance shall be in an amount equal to the
original principal balance of the related Loan.
(b) The Servicer shall not be required to have Mortgagors maintain any
Primary Mortgage Insurance Policy with respect to any Loan, but may do so as
allowed by law, and shall allow the cancellation of any such Primary Mortgage
Insurance Policy as required by law. The Servicer shall not take any action
which would result in non-coverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of the Servicer, would
have been covered thereunder. If any Mortgagor fails to pay the premiums for its
Primary Mortgage Insurance Policy, if any, the Servicer may, but shall not be
required to, pay such premiums. Any payment made by the Servicer pursuant to
this Section 3.09(b) shall be recoverable as a Servicing Advance to the extent
permitted by Section 3.08.
(c) In connection with its activities as Servicer of the Loans, the
Servicer agrees to present on behalf of itself, the Trustee, the Insurer and
Certificateholders, claims to the insurer under any Primary Mortgage Insurance
Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Primary Mortgage Insurance Policies
respecting defaulted Loans. Any amounts collected by the Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the Certificate
Account.
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption Agreements.
(a) When any property subject to a Mortgage has been conveyed by the
Mortgagor, the Servicer, to the extent that it has knowledge of such conveyance,
may, at its discretion, but is not required to, enforce any due-on-sale clause
contained in any Mortgage Note or Mortgage, to the extent permitted under
applicable law and governmental regulations, but only to the extent that such
enforcement will not adversely affect or jeopardize coverage under any Required
Insurance Policy. The Servicer is authorized, subject to Section 3.10(b), to
take or enter into an assumption and modification agreement from or with the
Person to whom such
42
property has been or is about to be conveyed, pursuant to which such Person
becomes liable under the Mortgage Note and, unless prohibited by applicable
state law, the Mortgagor remains liable thereon, provided that the Loan shall
continue to be covered (if so covered before the Servicer enters such agreement)
by the applicable Required Insurance Policies. The Servicer, subject to Section
3.10(b), is also authorized with the prior approval of the insurers under any
Required Insurance Policies 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 Mortgagor and becomes liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer shall not be
deemed to be in default under this Section by reason of any transfer or
assumption which the Servicer reasonably believes it is restricted by law from
preventing, for any reason whatsoever.
(b) In any case in which a Mortgaged Property has been conveyed to a Person
by a Mortgagor, and such Person is to enter into an assumption agreement or
modification agreement or supplement to the Mortgage Note or Mortgage that
requires the signature of the Trustee, or if an instrument of release signed by
the Trustee is required releasing the Mortgagor from liability on the Loan, the
Servicer shall prepare and deliver or cause to be prepared and delivered to the
Trustee for signature and shall direct, in writing, the Trustee to execute the
assumption agreement with the Person to whom the Mortgaged Property is to be
conveyed and such modification agreement or supplement to the Mortgage Note or
Mortgage or other instruments as are reasonable or necessary to carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged Property
to such Person. In connection with any such assumption, no material term of the
Mortgage Note may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Servicer in accordance with its
underwriting standards as then in effect. Together with each such substitution,
assumption or other agreement or instrument delivered to the Trustee for
execution by it, the Servicer shall deliver an Officer's Certificate signed by a
Servicing Officer stating that the requirements of this subsection have been met
in connection therewith. The Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in the
case of the original 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. Any fee
collected by the Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation.
SECTION 3.11. Realization Upon Defaulted Loans; Repurchase of Certain
Loans.
The Servicer shall use reasonable efforts to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Loans as
come into and continue in default and as to which no satisfactory arrangements
can be made for collection of delinquent payments. In connection with such
foreclosure or other conversion, the Servicer shall follow such practices and
procedures as it shall deem necessary or advisable and as shall be
43
normal and usual in its general mortgage servicing activities and meet the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Loan after reimbursement to itself
of such expenses and (ii) that such expenses will be recoverable to it through
Liquidation Proceeds (respecting which it shall have priority for purposes of
withdrawals from the Certificate Account). The Servicer shall be responsible for
all other costs and expenses incurred by it in any such proceedings; provided,
however, that it shall be entitled to reimbursement thereof from the liquidation
proceeds with respect to the related Mortgaged Property, as provided in the
definition of Liquidation Proceeds. If the Servicer has knowledge that a
Mortgaged Property which the Servicer is contemplating acquiring in foreclosure
or by deed in lieu of foreclosure is located within a one mile radius of any
site with environmental or hazardous waste risks known to the Servicer, the
Servicer will, prior to acquiring the Mortgaged Property, (i) consider such
risks and only take action in accordance with its established environmental
review procedures and (ii) consult with the Insurer and obtain the Insurer's
consent to such action.
With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trustee for the benefit of the Certificateholders, or
its nominee, on behalf of the Certificateholders. The Trustee's name shall be
placed on the title to such REO Property solely as the Trustee hereunder and not
in its individual capacity. The Servicer shall ensure that the title to such REO
Property references this Agreement and the Trustee's capacity thereunder. In
order to facilitate sales of REO Properties by the Servicer, upon the Servicer's
request, the Trustee shall promptly provide the Servicer with appropriate
limited durable powers of attorney or such other documentation as may reasonably
be required by the Servicer or purchasers of REO Properties to consummate such
sales. Pursuant to its efforts to sell such REO Property, the Servicer shall
either itself or through an agent selected by the Servicer protect and conserve
such REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent the
same, or any part thereof, as the Servicer deems to be in the best interest of
the Certificateholders for the period prior to the sale of such REO Property.
The Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions. The
net monthly income, if any, from such REO Property shall be deposited in the
Certificate Account no later than the close of business on each Determination
Date. The Servicer shall perform the tax reporting and withholding required by
Sections 1445 and 6050J of the Code with respect to foreclosures and
abandonments, the tax reporting required by Section 6050H of the Code with
respect to the receipt of mortgage interest from individuals and any tax
reporting required by Section 6050P of the Code with respect to the cancellation
of indebtedness by certain financial entities, by preparing such tax and
information returns as may be required, in the form required, and delivering the
same to the Trustee for filing.
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In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Loan, the Servicer shall dispose of such Mortgaged Property prior to three years
after its acquisition by the Trust Fund unless the Trustee shall have been
supplied with an Opinion of Counsel (which Opinion of Counsel shall not be at
the expense of the Trustee) to the effect that the holding by the Trust Fund of
such Mortgaged Property subsequent to such three-year period will not result in
the imposition of taxes on "prohibited transactions" of the REMIC hereunder as
defined in section 860F of the Code or cause the REMIC to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the Trust
Fund may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel). Notwithstanding any other provision of
this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) subject the REMIC to the imposition of any federal, state or local income
taxes on the income earned from such Mortgaged Property under Section 860G(c) of
the Code or otherwise, unless the Servicer has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Loan shall be
subject to a determination by the Servicer that the proceeds of such foreclosure
would exceed the costs and expenses of bringing such a proceeding.
The proceeds from any liquidation of a Loan, as well as any income from an
REO Property, will be applied in the following order of priority: first, to
reimburse the Servicer for any related unreimbursed Servicing Advances and
Servicing Fees related to such Liquidated Loan; second, to reimburse the
Servicer for any unreimbursed Advances; third, to accrued and unpaid interest
(to the extent no Advance has been made for such amount or any such Advance has
been reimbursed) on the Loan or related REO Property, at the Adjusted Net
Mortgage Rate to the Due Date occurring in the calendar month preceding the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Loan. Excess Proceeds, if any, from the liquidation
of a Liquidated Loan will be retained by the Servicer as additional servicing
compensation pursuant to Section 3.14.
The Servicer, in its sole discretion, shall have the right to purchase for
its own account or for resale as set forth herein from the Trust Fund any Loan
which is 91 days or more delinquent at a price equal to the Purchase Price. The
Purchase Price for any Loan purchased hereunder shall be deposited in the
Certificate Account and the Trustee, upon receipt of a Request for Release from
the Servicer substantially in the form of Exhibit J, shall release or cause to
be released to the Servicer the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment prepared by the purchaser of
such Loan, in each case without recourse, as shall be necessary to vest in the
Servicer any Loan released pursuant hereto and the Servicer shall succeed to all
the Trustee's right, title and interest in and to such Loan and all security and
documents related thereto. Such assignment shall be a sale and assignment
45
outright and not for security. The Servicer shall thereupon own such Loan, and
all security and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Loan, or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Servicer will immediately notify the Trustee by delivering,
or causing to be delivered, a Request for Release substantially in the form of
Exhibit J. Upon receipt of such request, the Trustee shall promptly release the
related Mortgage File to the Servicer, and the Trustee shall at the Servicer's
direction execute and deliver to the Servicer the request for reconveyance, deed
of reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage in each case provided by the Servicer.
Expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the related Mortgagor. From time to time and
as shall be appropriate for the servicing or foreclosure of any Loan, including
for such purpose, collection under any policy of flood insurance, any fidelity
bond or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making of
any corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee shall, upon delivery to the
Trustee of a Request for Release substantially in the form of Exhibit J signed
by a Servicing Officer, release the Mortgage File to the Servicer. Subject to
the further limitations set forth below, the Servicer shall cause the Mortgage
File or documents so released to be returned to the Trustee when the need
therefor by the Servicer no longer exists, unless the Loan is liquidated and the
proceeds thereof are deposited in the Certificate Account, in which case the
Servicer shall deliver to the Trustee a Request for Release substantially in the
form of Exhibit J, signed by a Servicing Officer.
If the Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, the Servicer
shall deliver or cause to be delivered to the Trustee, for signature, as
appropriate, any court pleadings, requests for trustee's sale or other documents
necessary to effectuate such foreclosure or any legal action brought to obtain
judgment against the Mortgagor on the Mortgage Note or the Mortgage or to obtain
a deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the Mortgage or otherwise available at law or in equity.
SECTION 3.13. Documents Records and Funds in Possession of Servicer to be
Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Servicer shall
transmit to the Trustee as required by this Agreement all documents and
instruments in respect of a Loan coming into the possession of the Servicer from
time to time and shall account fully to the Trustee for any funds received by
the Servicer or which otherwise are collected by the Servicer as Liquidation
Proceeds or Insurance Proceeds in respect of any Loan. All Mortgage
46
Files and funds collected or held by, or under the control of, the Servicer in
respect of any Loans, whether from the collection of principal and interest
payments or from Liquidation Proceeds, including but not limited to, any funds
on deposit in the Certificate Account, shall be held by the Servicer for and on
behalf of the Trustee and shall be and remain the sole and exclusive property of
the Trustee, subject to the applicable provisions of this Agreement. The
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Certificate Account, Distribution
Account, or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders or the Insurer, 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
Loan, except, however, that the Servicer shall be entitled to set off against
and deduct from any such funds any amounts that are properly due and payable to
the Servicer under this Agreement.
SECTION 3.14. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Certificate Account an amount equal to
the Servicing Fee for each Loan, provided that the aggregate Servicing Fee for
Loans in a particular Group with respect to any Distribution Date shall be
reduced (i) by an amount equal to the aggregate of the Prepayment Interest
Shortfalls relating to such Group, if any, with respect to such Distribution
Date, up to the full amount of the aggregate Servicing Fee for Loans in such
Group, and (ii) with respect to the first Distribution Date, an amount equal to
any amount relating to such Group to be deposited into the Distribution Account
by the Depositor pursuant to Section 2.01(a) and not so deposited.
Notwithstanding the preceding sentence, the Servicer shall, on each Distribution
Date after the Call Option Date, reduce its Servicing Fee for each of the Group
I Loans to the extent necessary to maintain the Weighted Average Adjusted Net
Mortgage Rate of the Loans in such Group at a rate no less than ____ %.
Notwithstanding the second preceding sentence, the Servicer shall, on each
Distribution Date, reduce its Servicing Fee for each of the Group II Loans to
the extent necessary to maintain the Weighted Average Adjusted Net Mortgage Rate
of the Loans in such Group at a rate no less than: (i) on or prior to the Call
Option Date for so long as Equity One, Inc. is the Servicer, ____ % and (ii)
after the Call Option Date, ____ %.
Additional servicing compensation in the form of Excess Proceeds,
Prepayment Interest Excess, prepayment penalties, assumption fees, late payment
charges and all income and gain net of any losses realized from Permitted
Investments made with funds on deposit in the Certificate Account shall be
retained by the Servicer to the extent not required to be deposited in the
Certificate Account pursuant to Section 3.05 hereof. The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement therefor except
as specifically provided in this Agreement.
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SECTION 3.15. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising certain Certificateholders and the examiners
and supervisory agents of the OTS, the FDIC and such other authorities, access
to the documentation regarding the Loans required by applicable regulations of
the OTS and the FDIC. Such access shall be afforded without charge, but only
upon reasonable and prior written request and during normal business hours at
the offices designated by the Servicer. Nothing in this Section shall limit the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the Mortgagors and the failure of the Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
SECTION 3.16. Annual Statement as to Compliance.
The Servicer shall deliver to the Depositor, the Insurer and the Trustee on
or before 120 days after the end of the Servicer's fiscal year, commencing with
its ____ fiscal year, an Officer's Certificate stating, as to the signer
thereof, that (i) a review of the activities of the Servicer during the
preceding fiscal year and of the performance of the Servicer under this
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
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 officer and the nature and status thereof. The Trustee
shall forward a copy of each such statement to each Rating Agency and to the
Insurer.
SECTION 3.17. Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
On or before 120 days after the end of the Servicer's fiscal year,
commencing with its ____ fiscal year, the Servicer at its expense shall cause a
nationally or regionally recognized firm of independent public accountants (who
may also render other services to the Servicer, the Seller or any affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Trustee, the Insurer and the Depositor
to the effect that such firm has examined certain documents and records relating
to the servicing of the Loans under this Agreement and that, on the basis of
such examination, conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
serviced for FNMA and FHLMC, such servicing has been conducted in compliance
with this Agreement except for such significant exceptions or errors in records
that, in the opinion of such firm, the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Program for Mortgages serviced for FNMA and FHLMC
requires it to report. In rendering such statement, such firm may rely, as to
matters relating to direct servicing of mortgage loans by Subservicers, upon
comparable statements for examinations conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages serviced for FNMA and FHLMC (rendered within one year
48
of such statement) of independent public accountants with respect to the related
Subservicer. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided such
statement is delivered by the Servicer to the Trustee.
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Servicer
hereunder and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of FNMA or FHLMC for persons performing servicing
for mortgage loans purchased by FNMA or FHLMC. In the event that any such policy
or bond ceases to be in effect, the Servicer shall obtain a comparable
replacement policy or bond from an insurer or issuer, meeting the requirements
set forth above as of the date of such replacement.
SECTION 3.19. Optional Removal of Servicer by the Insurer.
If any of the following occur, the Insurer shall have the option (but not
the obligation), by notice in writing to the Servicer (with a copy to each
Rating Agency), to terminate all of the rights and obligations of the Servicer
under this Agreement and in and to the Loans and the proceeds thereof, other
than its rights as a Certificateholder hereunder:
(i) if on three consecutive Distribution Dates, the aggregate
outstanding principal balance of Loans more than 60 days contractually
delinquent (including Loans in foreclosure and REO Properties) as of the
end of the related Interest Accrual Period exceeds (a) prior to the
Step-Down Date, ________% of the Pool Principal Balance as of the end of
the related Interest Accrual Period or (b) on or after the Step-Down Date,
________% of the Pool Principal Balance as of the end of the related
Interest Accrual Period;
(ii) if on any Distribution Date, the cumulative Loan Losses over the
prior twelve month period exceed 1.00% of the average Pool Principal
Balance as of the end of the twelve preceding Interest Accrual Periods; or
(iii) if on any Distribution Date, the cumulative Loan Losses since
the Cut-Off Date exceed 2.50% of the Cut-off Date Pool Principal Balance.
On and after the receipt by the Servicer of the notice described in this
Section, all authority and power of the Servicer hereunder, whether with respect
to the Loans or otherwise, shall pass to and be vested in the Trustee, which
shall act as servicer in accordance with the duties and obligations described in
Sections 7.02 and 7.03.
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ARTICLE IIIA
SPREAD ACCOUNT; POLICY
SECTION 3A.01 Establishment of Spread Account; Deposits in Spread Account;
Permitted Withdrawals from Spread Account.
(a) No later than the Closing Date, the Trustee will establish and maintain
for the benefit of the Certificateholders and the Insurer an Eligible Account
titled "Spread Account, ____, as trustee for the registered holders of Equity
One ABS, Inc. Mortgage Pass-Through Certificates, Series ____." The Spread
Account will be initially funded by a deposit in the amount of $____. The Spread
Account shall be treated as a "qualified reserve fund" under applicable Treasury
regulations. Except as set forth in clause (d) of this Section 3A.01, the
Trustee shall, promptly upon receipt, deposit into the Spread Account and retain
therein:
(i) on each Distribution Date, the Class A-___ Monthly Spread
Account Deposit Amount transferred by the Trustee pursuant to Section
4.02(a)(viii) and the Class A-___ Monthly Spread Account Deposit Amount
transferred by the Trustee pursuant to Section 4.02(b)(viii); and
(ii) upon receipt, amounts required to be deposited or to be
paid by the Servicer pursuant to Section 3.05(d) and (f) in connection
with losses and gains on investments of amounts in the Spread Account.
(b) Amounts on deposit in the Spread Account shall be withdrawn on each
Distribution Date by the Trustee in the following order of priority:
(i) to deposit in the Distribution Account, an amount equal to
the lesser of (A) the excess of (1) the sum of the Remittance Amounts
for the Class A-___ and Class A-___ Certificates for such Distribution
Date over (2) the sum of the Net Available Funds for the Class A-___
and the Class A-___ Certificates for such Distribution Date or (B) all
remaining amounts in the Spread Account (any such amount, the "SPREAD
ACCOUNT DRAW"); and
(ii) to the extent that the amount on deposit in the Spread
Account exceeds the Specified Spread Account Requirement as of such
Distribution Date (such excess, a "SPREAD ACCOUNT EXCESS"), an amount
equal to such Spread Account Excess shall be distributed to the Class R
Certificateholders.
(c) The Trustee shall also be entitled to take the following actions with
respect to the Spread Account:
(i) invest amounts on deposit in the Spread Account in
Eligible Investments pursuant to Section 3.05(f);
50
(ii) withdraw any amount not required to be deposited in the
Spread Account or deposited therein in error at any time; and
(iii) clear and terminate the Spread Account upon the
termination of this Agreement and, upon such termination, to distribute
the balance, if any, to the Class R Certificateholders.
(d) On the Distribution Date on which all remaining principal as well as
any other amounts due have been paid to the Class A Certificateholders,
including the Insurer as subrogee of the Class A Certificateholders, and all I&I
Payments have been paid to the Insurer, the Trustee, after making any
withdrawals from the Spread Account required pursuant to Section 3A.01(b) or
(c), shall:
(i) clear and terminate the Spread Account, liquidate any
investments therein and distribute any uninvested funds therein or the
proceeds of such liquidation to the Class R Certificateholders; and
(ii) distribute future receipts of the Spread Account Deposit
Amount to the Class R Certificateholders.
(e) The Spread Account may be terminated at any time with the prior written
approval of the Insurer and the Rating Agencies and written confirmation that
such termination will not result in a downgrade of the Class A Certificates
without taking the Policy into account.
SECTION 3A.02 Policy.
(a) As soon as possible, and in no event later than 12:00 p.m. New York
City time on the second Business Day immediately preceding the Distribution
Date, the Trustee shall furnish the Insurer and the Servicer with a completed
notice in the form set forth as Exhibit A to the Endorsement to the Policy (the
"NOTICE") in the event that, with respect to either the Class A-___ Certificates
or the Class A-___ Certificates, the sum of the related Net Available Funds, the
related Cross-Collateralization Amount and the related Spread Account Draw is
insufficient to pay the Remittance Amount for such Class on such Distribution
Date. The Notice shall specify the Insured Amount required and shall constitute
a claim for an Insured Amount pursuant to the Policy. Upon receipt of Insured
Amounts on behalf of the Class A Certificateholders under the Policy, the
Trustee shall deposit such Insured Amounts in the Distribution Account and shall
distribute such Insured Amounts pursuant to Section 4.02.
(b) The Trustee shall receive, as attorney-in-fact of each Holder of a
Class A Certificate, any Insured Amount from the Insurer and disburse the same
to each Holder of a Class A Certificate in accordance with the provisions of
Section 4.02. Insured Amounts disbursed by the Trustee from proceeds of the
Policy shall not be considered payment by the Trust nor shall such payments
discharge the obligation of the Trust with respect to the related
51
Class of Class A Certificates, and the related Class Certificate Balance shall
be deemed not reduced for such purposes and the Insurer shall become the owner
of such unpaid amounts due from the Trust in respect of such Class of Class A
Certificates. The Trustee hereby agrees on behalf of each Holder of a Class A
Certificate for the benefit of the Insurer that it recognizes that to the extent
the Insurer pays Insured Amounts, either directly or indirectly (as by paying
through the Trustee), to the Class A Certificateholders, the Insurer will be
subrogated to the rights of such Class A Certificateholders, as applicable, with
respect to such Insured Amount, shall be deemed to the extent of the payments so
made to be a registered Class A Certificateholder for purposes of payment and
shall receive all future related Remittance Amounts until all such Insured
Amounts paid by the Insurer have been fully reimbursed, subject to the following
paragraph. To evidence such subrogation, the Trustee shall note the Insurer's
rights as subrogee on the registration books maintained by the Trustee and on
any related Class A Certificates surrendered for payment upon receipt from the
Insurer of proof of payment of any Insured Amount. Except as otherwise described
herein, the Insurer shall not acquire any voting rights hereunder as a result of
such subrogation.
(c) It is understood and agreed that the intention of the parties is that
the Insurer shall not be entitled to reimbursement on any Distribution Date for
amounts previously paid by it unless on such Distribution Date the Class of
Class A Certificateholders shall also have received the full amount of the
related Remittance Amount for such Distribution Date.
(d) The Trustee shall keep complete and accurate records of the amount of
Insured Amounts paid and the Insurer shall have the right to inspect such
records at reasonable times upon one Business Day's prior notice to the Trustee.
(e) The Trustee shall promptly notify the Insurer of any proceeding or the
institution of any action seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership or similar law (a "PREFERENCE
CLAIM") of any distribution made with respect to the Class A Certificates. Each
Holder, by its purchase of Class A Certificates, and the Trustee hereby agree
that the Insurer (so long as no Insurer Default exists) may at any time during
the continuation of any proceeding relating to a Preference Claim direct all
matters relating to such Preference Claim, including, without limitation, (i)
the direction of any appeal of any order relating to any Preference Claim and
(ii) the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition and without limitation of the foregoing, the Insurer shall
be subrogated to the rights of the Trustee and each such Holder in the conduct
of any such Preference Claim, including, without limitation, all rights of any
party to an adversary proceeding action with respect to any order issued in
connection with any such Preference Claim. Insured Amounts paid by the Insurer
to the Trustee shall be received by the Trustee, as agent to the
Certificateholders. The Trustee is not permitted to make a claim on the Trust or
on any Certificateholder for payments made to Certificateholders under the
Policy which are characterized as preference payments by any federal bankruptcy
court having jurisdiction over any bankrupt Mortgagor unless ordered to do so by
such bankruptcy court.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
SECTION 4.01. Advances.
The Servicer shall determine on or before each Servicer Advance Date
whether it is required to make an Advance pursuant to the definition thereof. If
the Servicer determines it is required to make an Advance, it shall, on or
before the Servicer Advance Date, either (i) deposit into the Certificate
Account an amount equal to the Advance or (ii) make an appropriate entry in its
records relating to the Certificate Account that any Amount Held for Future
Distribution has been used by the Servicer in discharge of its obligation to
make any such Advance. Any funds so applied shall be replaced by the Servicer by
deposit in the Certificate Account no later than the close of business on the
next Servicer Advance Date. The Servicer shall be entitled to be reimbursed from
the Certificate Account for all Advances of its own funds made pursuant to this
Section as provided in Section 3.08. The obligation to make Advances with
respect to any Loan shall continue if such Loan has been foreclosed or otherwise
terminated and the Mortgaged Property has not been liquidated.
SECTION 4.02. Priorities of Distribution.
(a) On each Distribution Date, the Trustee shall distribute the following
amounts from Class A-___ Distributable Funds, to the extent available, to the
parties and in the priorities indicated:
(i) first, to the Insurer, the portion of the Insurer's Monthly
Premium based upon the Class Certificate Balance of the Class A-___
Certificates;
(ii) second, to the Trustee, the portion of the Trustee Fee based
upon the Group Principal Balance of the Group I Loans, except to the
extent previously paid by withdrawals under Section 3.08;
(iii) third, to the Servicer, an amount equal to the sum of (i) the
aggregate Servicing Fee relating to the Group I Loans, except to the
extent previously paid by withdrawals under Section 3.08, and (ii) any
other amounts expended by the Servicer in connection with Group I Loans
and reimbursable thereto under this Agreement but not previously
reimbursed;
(iv) fourth, to the Class A-___ Certificates, the related Interest
Distribution Amount;
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(v) fifth, to the Class A-___, Certificates, an amount equal to the
lesser of (A) the Certificate Formula Principal Amount for the Class
A-___ Certificates or (B) the amount necessary to reduce the Class
Certificate Balance of the Class A-___ Certificates to zero;
(vi) sixth, to the Class A-___ Certificates to fund any Class A-___
Available Funds Shortfall;
(vii) seventh, to the Insurer, any I&I Payments then due and owing,
except to the extent paid pursuant to clause (b)(vii) below; and
(viii) eighth, for deposit into the Spread Account, the Class A-___
Monthly Spread Account Deposit Amount.
(b) On each Distribution Date, the Trustee shall distribute the
following amounts from Class A-___ Distributable Funds, to the extent
available, to the parties and in the priorities indicated:
(i) first, to the Insurer, the portion of the Insurer's Monthly
Premium based upon the Class Certificate Balance of the Class A-___
Certificates;
(ii) second, to the Trustee, the portion of the Trustee Fee based
upon the Group Principal Balance of the Group II Loans, except to the
extent previously paid by withdrawals under Section 3.08;
(iii) third, to the Servicer, an amount equal to the sum of (i) the
aggregate Servicing Fee relating to the Group II Loans, except to the
extent previously paid by withdrawals under Section 3.08, and (ii) any
other amounts expended by the Servicer in connection with Group II Loans
and reimbursable thereto under this Agreement but not previously
reimbursed;
(iv) fourth, to the Class A-___ Certificates, the related Interest
Distribution Amount;
(v) fifth, to the Class A-___, Certificates, an amount equal to the
lesser of (A) the Certificate Formula Principal Amount for the Class
A-___ Certificates or (B) the amount necessary to reduce the Class
Certificate Balance of the Class A-___ Certificates to zero;
(vi) sixth, to the Class A-___ Certificates to fund any Class A-___
Available Funds Shortfall;
(vii) seventh, to the Insurer, any I&I Payments then due and owing,
except to the extent paid pursuant to clause (a)(vii) above; and
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(viii) eighth, for deposit into the Spread Account, the Class A-___
Monthly Spread Account Deposit Amount.
(c) On each Distribution Date, following all distributions made pursuant
to clauses (a) and (b) above, the Trustee shall distribute the Spread Account
Excess, if any, to the Class R Certificateholders.
(d) On each Distribution Date, the amount referred to in clause (i) of
the definition of Interest Distribution Amount for each Class of Certificates
for such Distribution Date shall be reduced by the amount of (i) Net
Prepayment Interest Shortfalls on Loans in the Applicable Group and (ii)
Relief Act Reductions on Loans in the Applicable Group incurred during the
calendar month preceding the month of such Distribution Date.
(e) If on any Distribution Date a Spread Account Draw is made by both
the Class A-___ and Class A-___ Certificates and the amount of funds on
deposit in the Spread Account is insufficient to cover both Spread Account
Draws, funds on deposit in the Spread Account shall be distributed to each
Class on a pro rata basis in proportion to the respective amounts of the
Spread Account Draw for each such Class.
SECTION 4.03. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare and
cause to be forwarded by first class mail to each Certificateholder, the
Insurer, the Servicer, the Depositor and each Rating Agency a statement
setting forth with respect to the related distribution:
(i) with respect to each Group, 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 Class Unpaid
Interest Amount included in such distribution and any remaining Class
Unpaid Interest Amount after giving effect to such distribution;
(iii) if the distribution to the Holders of a 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;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such
Distribution Date;
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(v) the Pool Principal Balance and the Group Principal Balances for
the following Distribution Date;
(vi) with respect to each Group, the amount of the Servicing Fee
paid to or retained by the Servicer with respect to such Distribution
Date;
(vii) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(viii) with respect to each Group, the amount of Advances included
in the distribution on such Distribution Date and the aggregate amount
of Advances outstanding as of the close of business on such Distribution
Date;
(ix) with respect to each Group, the number and aggregate principal
amounts of Loans (A) delinquent (exclusive of Loans in foreclosure) (1)
1 to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more days
and (B) in foreclosure and delinquent (1) 1 to 30 days (2) 31 to 60 days
(3) 61 to 90 days and (4) 91 or more days, as of the close of business
on the last day of the Prepayment Period preceding such Distribution
Date;
(x) with respect to each Group and with respect to any Loan that
became an REO Property during the preceding calendar month, the loan
number and Stated Principal Balance of such Loan as of the close of
business on the last day of the Prepayment Period preceding such
Distribution Date and the date of acquisition thereof;
(xi) with respect to each Group, the total number and principal
balance of any REO Properties (and market value, if available) as of the
close of business on the last day of the Prepayment Period preceding
such Distribution Date;
(xii) with respect to each Group, the Cross-Collateralization
Amount;
(xiii) with respect to each Group, the Spread Account Draw;
(xiv) the Class A-___ and Class A-___ Monthly Spread Account
Deposit Amounts, the percentage of the Class A-___ and Class A-___
Spread Account Deposit Amounts used to determine such Class A-___ and
Class A-___ Monthly Spread Account Deposit Amounts, the Class A-___ and
Class A-___ Spread Account Deposit Amounts, the Spread Account Excess
and the allocation of such Spread Account Excess to Class R
Certificateholders pursuant to Section 3A.01;
(xv) the amount on deposit in the Spread Account after the
Distribution Date;
(xvi) the Specified Spread Account Requirement; and
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(xvii) the amount equal to the sum of the Stated Principal Balances
of the three Loans in the Mortgage Pool with the largest individual
Stated Principal Balances.
(b) The Trustee's responsibility for disbursing the above information to
the Certificateholders is limited to the availability, timeliness and
accuracy of the information provided by the Servicer. On or before the third
Business Day following the end of each Prepayment Period, the Servicer shall
deliver to the Trustee a report, in a form acceptable to the Trustee,
containing all of the necessary information for the Trustee to complete items
(i), (v), (vi), (viii)-(xi) and (xvii) of the statement described in (a)
above. The Trustee shall be responsible for obtaining the necessary
information to complete items (ii), (iii), (iv), (vii) and (xii)-(xvi) of the
statement described in (a) above.
(c) Within a reasonable period of time after the end of each calendar
year, but in no case later than the time prescribed by the Code and
applicable Treasury regulations, 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.
SECTION 4.04. Bloomberg Reporting.
On each Distribution Date, the Servicer shall provide to the Trustee
current information of the type set forth in Schedule I hereto presented in a
format substantially similar to Exhibit L attached hereto and the Trustee
shall then post such information on its internet bulletin board, or otherwise
make such information available to Bloomberg L.P.
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 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.
Subject to Section 9.02 hereof respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record
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on the preceding Record Date either (a) by wire transfer in immediately
available funds to the account of such Holder at a bank or other entity
having appropriate facilities therefor, if (i) such Holder has so notified
the Trustee at least five Business Days prior to the related Record Date and
(ii) such Holder shall hold (A) 100% of the Class Certificate Balance of any
Class of Certificates or (B) Certificates of any Class with an aggregate
principal Denomination of not less than $1,000,000 or (b) 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 when 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 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 hereof, 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 the form of Exhibit G duly executed by
the Holder thereof or his attorney duly authorized in writing.
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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 canceled and subsequently destroyed by the Trustee in accordance
with the Trustee's customary procedures.
(b) No transfer of a Class R 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
the event that a transfer is to be made in reliance upon an exemption from
the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, (i) the Certificateholder desiring to effect
such transfer and such Certificateholder's prospective transferee shall each
certify to the Trustee in writing the facts surrounding the transfer, the
Certificateholder by delivering a certificate in substantially the form set
forth in Exhibit G (the "TRANSFEROR CERTIFICATE") and the Certificateholder's
prospective transferee by delivering a letter in substantially the form of
either Exhibit H (the "INVESTMENT LETTER") or 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 pursuant
to an exemption from the Securities Act. The Depositor shall provide to any
Holder of a Class R Certificate and any prospective transferee designated by
any such Holder, information regarding the related Certificates and the Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Servicer
shall cooperate with the Depositor in providing the Rule 144A information
referenced in the preceding sentence, including providing to the Depositor
such information regarding the Certificates, the 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 Class R
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor, the Sellers and the Servicer against
any liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
No transfer of an Class R Certificate shall be made unless the Trustee
shall have received (i) a representation letter from the transferee
substantially in the form of Exhibit H or Exhibit I, to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section
406 of ERISA or a plan or arrangement subject to Section 4975 of 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, (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
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purchase and holding of such Certificates are covered under PTCE 95-60 or
(iii) in the case of any such Class R 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 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,
which Opinion of Counsel shall not be an expense of either the Trustee or the
Trust Fund, addressed to the Trustee to the effect that the purchase or
holding of such Class R 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
to any obligation in addition to those expressly undertaken in this Agreement
or to any liability. Notwithstanding anything else to the contrary herein,
any purported transfer of a Class R Certificate to or on behalf of an
employee benefit plan subject to ERISA or to the Code 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.
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 Class R 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
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate must 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 Class R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class R 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
F.
(iii) Each Person holding or acquiring any Ownership Interest in a
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 in a 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 a Class R Certificate and (C)
not to Transfer its Ownership Interest in a Class R Certificate or to
cause the Transfer of
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an Ownership Interest in a Class R Certificate to any other Person if it
has actual knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Class R Certificate in violation of the provisions of this Section
5.02(b) shall be absolutely null and void and shall vest no rights in
the purported Transferee. If any purported transferee shall become a
Holder of a Class R Certificate in violation of the provisions of this
Section 5.02(b), then the last preceding Permitted Transferee shall be
restored to all rights as Holder thereof retroactive to the date of
registration of Transfer of such Class R Certificate. The Trustee shall
be under no liability to any Person for any registration of Transfer of
a Class R Certificate that is in fact not permitted by this Section 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 either the
Rule 144A Letter or the Investment Letter. The Trustee shall be entitled
but not obligated to recover from any Holder of a Class R Certificate
that was in fact not a Permitted Transferee at the time it became a
Holder or, at such subsequent time as it became other than a Permitted
Transferee, all payments made on such Class R Certificate at and after
either such time. 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.
(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 Class R Certificate to any
Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class R Certificate set forth in this
Section 5.02(b) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee,
the Sellers or the Servicer, to the effect that the elimination of such
restrictions will not cause the Trust Fund hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Class R
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
Class R Certificate is not transferred, directly or indirectly, to a Person
that is not a Permitted Transferee and (b) to provide for a means to compel
the Transfer of a Class R Certificate which is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.
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(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 Beneficial 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 Beneficial 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 Beneficial 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
Beneficial Owners.
All transfers by Beneficial Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Beneficial Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Beneficial 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 Servicer 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 is unable to locate a
qualified successor, (y) the Servicer at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository or (z) after the occurrence of an Event of Default or the
resignation or removal of the Servicer, Beneficial Owners representing at
least 51% of the aggregate Certificate Balance of all Book-Entry Certificates
together advise the Depository, either directly or through the Depository
Participants, in writing (with instructions to notify the Trustee in writing)
that the continuation of a book-entry system through the Depository is no
longer in the best interests of the Beneficial Owners. Upon the occurrence of
any of the events described in the immediately preceding sentence, the
Trustee shall notify all Beneficial Owners of the occurrence of any such
event and of the availability through the Depository of definitive,
fully-registered Certificates (the "DEFINITIVE CERTIFICATES") to Beneficial
Owners requesting the same. Upon surrender to the Trustee of the related
Class of Certificates by the Depository, accompanied by the instructions from
the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Servicer, the Depositor nor the Trustee shall be
liable for any delay in delivery of such instruction and each may
conclusively rely on, and shall be protected in relying on, such
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instructions. The Servicer 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 Servicer and the
Trustee such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any
new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Servicer, the Trustee and any agent of the Servicer 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
Servicer, the Trustee nor any agent of the Servicer or the Trustee shall be
affected by any notice to the contrary.
SECTION 5.05. Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt
of such request, provide the Depositor, the Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of such Trust Fund held by the Trustee, if any. The
Depositor and every Certificateholder, by receiving and holding a
Certificate, agree that the Trustee shall not be held
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accountable by reason of the disclosure of any such information as to
the list of the Certificateholders hereunder, regardless of the source from
which such information was derived.
SECTION 5.06. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates its Corporate Trust Office for such purposes. The
Trustee will 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 SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the Servicer.
The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer.
The Depositor and the Servicer will each keep in full effect their
respective existence, rights and franchises as a corporation under the laws
of the United States or under the laws of one of the states thereof and will
each obtain and preserve their respective qualifications 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 Loans and to perform its respective duties under
this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to
which the Depositor or the Servicer shall be a party, or any person
succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Servicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, FNMA or FHLMC and shall be reasonably acceptable
to the Insurer.
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SECTION 6.03. Limitation on Liability of the Depositor, the Sellers, the
Servicer and Others.
None of the Depositor, the Sellers, the Servicer or any of the
directors, officers, employees or agents of the Depositor, the Sellers or the
Servicer 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 Sellers, the
Servicer or any such Person against any breach of representations or
warranties made by it herein or protect the Depositor, the Sellers, the
Servicer or any such Person from any liability which would otherwise be
imposed by reasons of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor, the Sellers, the Servicer and any
director, officer, employee or agent of the Depositor, the Sellers or the
Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Sellers, the Servicer and any director,
officer, employee or agent of the Depositor, the Sellers or the 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 Loan or 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 gross negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Sellers or the 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 any of the
Depositor, the Sellers or the Servicer may in its discretion undertake any
such action 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, the
Sellers and the Servicer shall be entitled to be reimbursed therefor out of
the Certificate Account.
SECTION 6.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) upon appointment of a successor servicer acceptable
to the Insurer and receipt by the Trustee of a letter from each Rating Agency
that such a resignation and appointment will not result in a downgrading of
the rating of any of the Certificates without taking the Policy into account
or (b) upon determination that its duties hereunder are no longer permissible
under applicable law. Any such determination under clause (b) permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Trustee. No such resignation shall become
effective until the Trustee or a successor servicer reasonably
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acceptable to the Insurer shall have assumed the Servicer's
responsibilities, duties, liabilities and obligations hereunder.
SECTION 6.05. Indemnification.
The Servicer agrees to indemnify and hold the Trustee, the Depositor,
the Insurer and each Certificateholder harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trustee, the
Depositor, the Insurer or any Certificateholder may sustain directly
resulting from the negligence or willful misconduct of the Servicer in the
performance of its duties hereunder or in the servicing of the Mortgage Loans
in compliance with the terms of this Agreement. The Servicer shall not be
liable or responsible for any of the representations, covenants, warranties,
responsibilities, duties or liabilities of any prior servicer. The Servicer
shall immediately notify the Trustee, the Depositor, the Insurer and each
Certificateholder if a claim is made by a third party for which any of such
parties could require indemnification from the Servicer under this Section
6.05, and the Servicer shall assume (with the consent of the Trustee and the
Insurer) the defense of any such claim and advance all expenses in connection
therewith, including reasonable counsel fees, and promptly advance funds to
pay, discharge and satisfy any non-appealable, final judgment or decree which
may be entered against the Servicer, the Trustee, the Depositor, the Insurer
and/or the Certificateholder in respect of such claim. Anything in this
Agreement to the contrary notwithstanding, in no event shall the Trustee be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Trustee
has been advised of the likelihood of such loss or damage and regardless of
the form of action. The indemnity provided for in this Section 6.05 shall
survive the termination of the Agreement.
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Servicer to deposit in the Certificate
Account or remit to the Trustee any payment (other than a payment
required to be made under Section 4.01 hereof) required to be made with
respect to any Class of Certificates under the terms of this Agreement,
which failure shall continue unremedied for five days after the date
upon which written notice of such failure shall have been given (a) to
the Servicer by the Trustee or the Depositor or (b) to the Servicer, the
Depositor and the Trustee by the Insurer or the Holders of Certificates
of such Class evidencing not less than 25% of the Voting Rights
allocated to such Class;
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(ii) any failure by the Servicer to duly observe or perform in any
material respect any other of the covenants or agreements on the part of
the Servicer contained in this Agreement, which failure shall continue
unremedied for a period of thirty days after the date on which written
notice of such failure shall have been given (a) to the Servicer by the
Trustee or the Depositor or (b) to the Servicer, the Depositor and the
Trustee by the Insurer or the Holders of Certificates of any Class
evidencing not less than 25% of the Voting Rights allocated to such
Class;
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceeding, or for the
winding-up or liquidation of its affairs, shall have been entered
against the Servicer and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 consecutive days;
(iv) the Servicer shall consent to the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Servicer or all or substantially all of the property of the Servicer;
(v) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations;
(vi) so long as the Servicer is a Seller, any failure by any Seller
to observe or perform in any material respect any of the other covenants
or agreements on the part of any Seller contained in this Agreement,
which failure shall continue unremedied for a period of 60 days after
the date on which written notice of such failure shall have been given
to such Seller by the Trustee or the Depositor, or to such Seller and
the Trustee by the Insurer or the Holders of Certificates of any Class
evidencing not less than 25% of the Voting Rights allocated to such
Class; or
(vii) any failure of the Servicer to make any Advance in the manner
and at the time required to be made pursuant to Section 4.01 which
continues unremedied for a period of one Business Day after the date of
such failure.
If an Event of Default described in clauses (i) to (vi) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, the Trustee shall, at the direction of
the Insurer, or may, or at the direction of the Holders of Certificates of
any Class evidencing not less than 25% of the Voting Rights allocated to such
Class and with the consent of the Insurer, the Trustee shall by notice in
writing to the Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the
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Servicer under this Agreement and in and to the Loans and the proceeds
thereof, other than its rights as a Certificateholder hereunder. If an Event
of Default described in clause (vii) hereof shall occur, the Trustee shall,
at the direction of the Insurer, by notice in writing to the Servicer and the
Depositor, terminate all of the rights and obligations of the Servicer under
this Agreement and in and to the Loans and the proceeds thereof, other than
its rights as a Certificateholder hereunder. On and after the receipt by the
Servicer of such written notice, all authority and power of the Servicer
hereunder, whether with respect to the Loans or otherwise, shall pass to and
be vested in the Trustee. The Trustee shall, subject to Section 3.04 hereof,
4thereupon make any Advance described in clause (vii) hereof. The Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Loans and related
documents, or otherwise. Unless expressly provided in such written notice, no
such termination shall affect any obligation of the Servicer to pay amounts
owed pursuant to Article VIII. The Servicer agrees to cooperate with the
Trustee in effecting the termination of the Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the Trustee
of all cash amounts which shall at the time be credited to the Certificate
Account, or thereafter be received with respect to the Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Loan which was due prior to the notice
terminating such Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which such Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any
other amounts payable to such Servicer hereunder the entitlement to which
arose prior to the termination of its activities hereunder.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof, the Trustee shall, subject to and to the
extent provided in Section 3.04, be the successor to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof and applicable law including the obligation to make
Advances pursuant to Section 4.01. As compensation therefor, the Trustee
shall be entitled to all funds relating to the Loans that the Servicer would
have been entitled to charge to the Certificate Account or Distribution
Account if the Servicer had continued to act hereunder. Notwithstanding the
foregoing, if the Trustee has become the successor to the Servicer in
accordance with Section 7.01 hereof, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from
making Advances pursuant to Section 4.01 hereof or if it is otherwise unable
to so act, appoint, or petition a court of competent jurisdiction to appoint,
any established mortgage loan servicing institution the appointment of which
does not adversely affect the then current rating of the
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Certificates by each Rating Agency as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder. Any successor to the
Servicer shall be reasonably acceptable to the Insurer and shall be an
institution which is a FNMA and FHLMC approved seller/servicer in good
standing, which has a net worth of at least $10,000,000, and which is willing
to service the Loans and executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, which contains
an assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer (other than liabilities of the
Servicer under Section 6.03 hereof incurred prior to termination of the
Servicer under Section 7.01), with like effect as if originally named as a
party to this Agreement; and provided further that no such delegation and
assignment shall become effective unless each Rating Agency acknowledges that
its rating of the Certificates in effect immediately prior to such delegation
and assignment will not be qualified or reduced as a result of such
delegation and assignment without taking the Policy into account. Pending
appointment of a successor to the Servicer hereunder, the Trustee, unless the
Trustee is prohibited by law from so acting, shall, subject to Section 3.04
hereof, 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 Loans as it and such
successor shall agree; provided, however, that no such compensation shall be
in excess of the Servicing Fee permitted the Servicer hereunder. The Trustee
and such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession. Neither the Trustee nor
any other successor servicer shall be deemed to be in default hereunder by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused
by the failure of the Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination or appointment of a successor to the Servicer,
the Trustee shall give prompt written notice thereof to Certificateholders,
the Insurer 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 notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge and after the
curing of all Events of Default 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 of which a Responsible Officer of
the Trustee shall have actual knowledge has occurred and remains uncured or
waived, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in 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; provided, however, that the Trustee
shall not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
Unless an Event of Default of which a Responsible Officer of the Trustee
shall have actual knowledge shall have occurred and be continuing, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and 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.
The Trustee shall not be liable for an error of judgment made in good
faith by a Responsible Officer or other officers of the Trustee, unless it
shall be finally proven that the Trustee was negligent in ascertaining the
pertinent facts.
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 this
Agreement or with the direction of the Insurer or Holders of Certificates
evidencing not less than 25% of the Voting Rights of the Certificates
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee under this Agreement.
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Subject to the other provisions of this Agreement and without limiting
the generality of this Section 8.01, the Trustee shall have no duty (A) to
see to any recording, filing, or depositing of this Agreement or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording or filing or depositing or to any re-recording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or
any lien or encumbrance of any kind owing with respect to, assessed or levied
against any part of the Trust Fund other than from funds available in the
Certificate Account or (D) to confirm or verify the contents of any reports
or certificates of the Servicer delivered to the Trustee pursuant to this
Agreement believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties; provided, however, that the
provisions of this Section 8.01(iv) shall not apply during any period during
which the Trustee is acting in the capacity of servicer.
Notwithstanding anything contained in this Section 8.01 to the contrary,
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.
SECTION 8.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) the Trustee (acting as Trustee, Tax Matters Person or as agent
of the Tax Matters Person for the REMIC) may request and rely upon and
shall be protected in acting or refraining from acting upon any
resolution, Officers' Certificate, Opinion of Counsel, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties and the Trustee shall have no
responsibility to ascertain or confirm the genuineness of any signature
of any such party or parties;
(ii) the Trustee (acting as Trustee, Tax Matters Person or as agent
of the Tax Matters Person for the REMIC) 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;
(iii) 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;
(iv) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion,
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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; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such
cost, expense or liability as a condition to taking any such action. The
reasonable expense of every such examination shall be paid by the
Servicer or if paid by the Trustee, shall be repaid by the Servicer upon
demand from the Servicer's own funds;
(v) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants, custodians or attorneys, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent, accountant, custodian or attorney appointed by the Trustee with
due care;
(vi) 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, and none of the provisions contained in
this Agreement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of
the Servicer under this Agreement except during such time, if any, as
the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of the Servicer in accordance with the
terms of this Agreement;
(vii) 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);
(viii) the Trustee shall not be required to take notice or be
deemed to have knowledge of any Event of Default (except an event of
nonpayment by the Servicer) until a Responsible Officer of the Trustee
shall have received written notice thereof, and in the absence of
receipt of such notice, the Trustee may conclusively assume that there
is no default or Event of Default;
(ix) 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 the provisions of 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;
72
(x) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act; and
(xi) the Trustee shall not be required to give any bond or surety
in respect of the execution of the Trust Fund created hereby or the
powers granted hereunder.
SECTION 8.03. Trustee Not Liable for Certificates or Loans.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor or the Sellers, as the case may be, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Loan or related document other than with respect to
the Trustee's execution and counter-signature of the Certificates. The
Trustee shall not be accountable for the use or application by the Depositor
or the Servicer of any of the Certificates or of the proceeds of such
Certificates or for the use and application of any funds paid to the
Depositor or the Servicer in respect of the Loans or deposited in or
withdrawn from the Certificate Account by the Depositor or the Servicer. The
Trustee shall not be responsible for the legality or validity of this
Agreement or the validity, priority, perfection or sufficiency of the
security for the Certificates issued or intended to be issued hereunder;
provided, however, that the foregoing language shall not apply to the
Trustee's obligations under this Agreement.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates, and may otherwise deal with the parties hereto
with the same rights as it would have if it were not the Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder, shall be
entitled to withdraw from the Distribution Account on each Distribution Date
an amount equal to the Trustee Fee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust) for such Distribution Date. The Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified by the Servicer and
held harmless against any loss, liability or expense (including reasonable
attorney's fees) (i) incurred in connection with any claim or legal action
relating to (a) this Agreement, (b) the Certificates or (c) in connection
with the performance of any of the Trustee's duties hereunder, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of any of the Trustee's duties
hereunder and (ii) resulting from any error in any tax
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or information return prepared by the Servicer. Such indemnity shall
survive the termination of this Agreement or the resignation or removal of
the Trustee hereunder. Without limiting the foregoing, the Servicer covenants
and agrees, except as otherwise agreed upon in writing by the Depositor and
the Trustee, and except for any such expense, disbursement or advance as may
arise from the Trustee's negligence, bad faith or willful misconduct, to pay
or reimburse the Trustee, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Agreement with respect to the following: (A) the
reasonable compensation and the 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 such persons to perform acts or services
hereunder and (C) printing and engraving expenses in connection with
preparing any Definitive Certificates. Except as otherwise provided herein,
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, Certificate Registrar, Tax Matters Person or Paying Agent
hereunder or for any other expenses.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or association
organized and doing business under the laws of a state or the United States
of America, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 subject to
supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) without
taking the Policy into account. 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
the provisions of this Section 8.06, the Trustee shall resign immediately in
the manner and with the effect specified in Section 8.07 hereof. The entity
serving as Trustee may have normal banking and trust relationships with the
Depositor and its affiliates or the Servicer and its affiliates; provided,
however, that such entity cannot be an affiliate of the Servicer other than
the Trustee in its role as successor to the Servicer.
SECTION 8.07. Resignation and Removal of 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
Insurer and the Servicer and 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
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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
the provisions of Section 8.06 hereof 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 shall, within 30 days after such
removal, appoint a successor trustee by written instrument, in triplicate,
one copy of which instrument shall be delivered to the Trustee, one copy of
which shall be delivered to the Servicer and one copy to the successor
trustee.
The Insurer or the Holders of Certificates entitled to at least 51% of
the Voting Rights may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by the
Insurer or such Holders or their attorneys-in-fact duly authorized, one
complete set of which instruments shall be delivered by the successor trustee
to the Servicer, one complete set to the Trustee so removed and one complete
set to the successor so appointed. Notice of any removal of the Trustee shall
be given to each Rating Agency by the successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.07 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 8.08 hereof.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Servicer an instrument accepting such appointment hereunder
and thereupon the resignation or removal of the predecessor trustee shall
become effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if
originally named as trustee herein. The Depositor, the Servicer and the
predecessor trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions
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of Section 8.06 hereof, is approved in writing by the Insurer and its
appointment shall 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 at their addresses as shown
in the Certificate Register. 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 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 the provisions of Section 8.06 hereof without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly
with the Trustee, or separate trustee or separate trustees, of all or any
part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Servicer and the Trustee may consider necessary or
desirable. If the Servicer shall not have joined in such appointment within
15 days after the receipt by it of a request to do so, or in the case an
Event of Default shall have occurred and be continuing, the Trustee alone
shall have the power to make such appointment. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.06 and no notice to Certificateholders of
the appointment of any co-trustee or separate trustee shall be required under
Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) to the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee under
this Agreement to advance funds on behalf of the Servicer, shall be
conferred or imposed upon and exercised or performed by the
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Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular
act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
applicable Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason
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;
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(iv) the Servicer, and not the Trustee, shall be 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 Servicer 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
is to be made, as set forth in the Preliminary Statement, shall constitute,
and that the conduct of matters
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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 REMIC and that in such capacity
it shall: (a) prepare and file, or cause to be prepared and filed, in a
timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax
Return (Form 1066 or any successor form adopted by the Internal Revenue
Service) and prepare and file or cause to be prepared and filed with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to the 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 or cause to be furnished to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby; (b) within thirty days of the Closing Date, furnish or cause to be
furnished to the Internal Revenue Service, on Forms 8811 or as otherwise may
be required by the Code, the name, title, address, and telephone number of
the person that the holders of the Certificates may contact for tax
information relating thereto, together with such additional information as
may be required by such Form, and update such information at the time or
times in the manner required by the Code; (c) make or cause to be made
elections that such assets 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, or cause to be prepared and forwarded, 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 without limitation, the calculation of any original issue discount
using the prepayment assumption described in the Prospectus Supplement; (e)
provide information necessary for the computation of tax imposed on the
transfer of a Class R Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
non-Permitted Transferee, or a pass-through entity in which a non-Permitted
Transferee is the record holder of an interest (the reasonable cost of
computing and furnishing such information may be charged to the Person liable
for such tax); (f) to the extent that they are under its control, conduct
matters relating to such assets at all times that any Certificates are
outstanding so as to maintain the status as a REMIC under the REMIC
Provisions; (g) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC status; (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 REMIC prior to 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) ensure that federal, state or local income tax or
information returns shall 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 REMIC, including,
but not limited to, the income, expenses, assets and liabilities thereof 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 REMIC
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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 REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of the REMIC, and otherwise act on
behalf of the REMIC in relation to any tax matter or controversy involving
it.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten (10) 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, without
limitation, the price, yield, prepayment assumption and projected cash flows
of the Certificates and the Loans. Thereafter, the Depositor shall provide to
the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, reasonably
request in order to enable the Trustee to perform its duties as set forth
herein. 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.
In the event that any tax is imposed on "prohibited transactions" of the
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the REMIC as defined in Section 860G(c) of the Code,
on any contribution to the REMIC after the Startup Day pursuant to Section
860G(d) of the Code, or any other tax is imposed, if not paid as otherwise
provided for herein, such tax shall be paid by (i) the Trustee, if such tax
arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) the Servicer, or if such tax arises
out of or results from a breach by the Servicer or a Seller of any of their
obligations under this Agreement, (iii) the Sellers, if any tax arises out of
or results from any Seller's obligation to repurchase a Loan pursuant to
Section 2.02 or 2.03 or (iv) in all other cases, or in the event that the
Trustee, the Servicer or a Seller fails to honor its obligations under the
preceding clause (i),(ii) or (iii), such tax will be paid with amounts
otherwise to be distributed to the Certificateholders, as provided in Section
3.08(b).
SECTION 8.12. Periodic Filings.
The Depositor shall prepare, execute and file all periodic reports
required under the Securities Exchange Act of 1934. In connection with the
preparation and filing of such periodic reports, the Servicer shall timely
provide to the Depositor all material information available to it which is
required to be included in such reports and not known to it to be in the
possession of the Depositor and such other information as the Depositor
reasonably may request from it and otherwise reasonably shall cooperate with
the Depositor. The Depositor shall have no liability with respect to any
failure to properly prepare or file such periodic reports resulting from or
relating to the Depositor's inability or failure to obtain any information
not resulting from its own negligence or willful misconduct.
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SECTION 8.13. Appointment of Custodians.
The Trustee may, with the consent of the Servicer, appoint one or more
Custodians to hold all or a portion of the Trustee's Mortgage Files as agent
for the Trustee, by entering into a Custodial Agreement. The Trustee agrees
to comply with the terms of each Custodial Agreement and to enforce the terms
and provisions thereof against the Custodian for the benefit of the
Certificateholders and the Insurer. The Trustee shall be liable for the fees
of any Custodian appointed hereunder. Each Custodian shall be a depository
institution subject to supervision by federal or state authority and shall be
qualified to do business in the jurisdiction in which it holds any Trustee's
Mortgage File.
SECTION 8.14. Trustee May Enforce Claims Without Possession of
Certificates.
All rights of action and claims under this Agreement or the Certificates
may be prosecuted and enforced by the Trustee without the possession of any
of the Certificates or the production thereof in any proceeding relating
thereto, any such proceeding instituted by the Trustee shall be brought in
its own name or in its capacity as Trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Insurer or the Certificateholders in respect of which
such judgment has been recovered.
SECTION 8.15. Suits for Enforcement.
In case an Event of Default or other default by the Servicer hereunder
shall occur and be continuing, the Trustee, in its discretion, may proceed to
protect and enforce its rights and the rights of the Insurer and the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution
of any power granted in this Agreement or for the enforcement of any other
legal, equitable or other remedy, as the Trustee, being advised by counsel,
shall deem most effectual to protect and enforce any of the rights of the
Trustee, the Insurer or the Certificateholders.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all Loans.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) subject to the last
sentence of this Section 9.01, the purchase by the Servicer of all Loans (and
REO Properties) remaining in the Trust Fund at a price equal to the sum of
(i) 100% of the Stated Principal Balance of each Loan plus accrued and unpaid
interest thereon at the
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applicable Pass-Through Rate and (ii) 100% of the Stated Principal
Balance of each Loan related to any REO Property plus accrued and unpaid
interest thereon at the applicable Pass-Through Rate or (b) the later of (i)
the maturity or other liquidation (or any Advance with respect thereto) of
the last 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 earlier of (i) the
expiration of 21 years from the death of the survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of
St. Xxxxx, living on the date hereof or (ii) the Latest Possible Maturity
Date. The right to purchase all Loans and REO Properties pursuant to clause
(a) above shall be conditioned upon the Pool Principal Balance, at the time
of any such repurchase, aggregating less than or equal to five percent (5%)
of the aggregate Cut-off Date Principal Balance of the Loans.
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, the Servicer determines that there are no
Outstanding Loans and no other funds or assets in the Trust Fund other than
the funds in the Certificate Account, the Servicer shall direct the Trustee
promptly to send a final distribution notice to each Certificateholder. If
the Servicer elects to terminate the Trust Fund pursuant to clause (a) of
Section 9.01, at least 20 days prior to the date notice is to be mailed to
the affected Certificateholders, the Servicer shall notify the Depositor, the
Insurer and the Trustee of the date the Servicer intends to terminate the
Trust Fund and of the applicable repurchase price of the Loans and REO
Properties.
Notice of any termination of the Trust Fund, 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 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 will give such
notice to each Rating Agency at the time such notice is given to
Certificateholders.
In the event such notice is given, the Servicer shall cause all funds in
the Certificate Account to be remitted to the Trustee for deposit in the
Distribution Account on the Business Day prior to the applicable Distribution
Date in an amount equal to the final distribution in respect of the
Certificates. Upon such final deposit with respect to the Trust Fund and the
receipt by the Trustee of a Request for Release therefor, the Trustee shall
promptly release to the Servicer the Mortgage Files for the Loans.
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Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class, in the order set
forth in Section 4.02 hereof, on the final Distribution Date and in
proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each Class
of Class A Certificates, the Certificate Balance thereof plus accrued
interest thereon, and (ii) as to the Class R 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.
(a) In the event the Servicer exercises its purchase option as provided
in Section 9.01, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Servicer, 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 the REMIC
as defined in section 860F of the Code, or (ii) cause the Trust Fund to fail
to qualify as a REMIC at any time that any Certificates are outstanding:
(1) Within 90 days prior to the final Distribution Date set forth
in the notice given by the Servicer under Section 9.02, the Servicer
shall prepare and the Trustee, at the expense of the Tax Matters Person,
shall adopt a plan of complete liquidation within the meaning of section
860F(a)(4) of the Code which, as evidenced by an Opinion of Counsel
(which opinion shall not be an expense of the Trustee or the Tax Matters
Person), meets the requirements of a qualified liquidation; and
(2) Within 90 days after the time of adoption of such a plan of
complete liquidation, the Trustee shall sell all of the assets of the
Trust Fund to the Servicer for cash in accordance with Section 9.01.
(b) The Trustee as agent for any REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Servicer,
and the receipt of the
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Opinion of Counsel referred to in Section 9.03(a)(1) and to take such
other action in connection therewith as may be reasonably requested by the
Servicer.
(c) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Servicer to prepare and the Trustee to adopt and sign a plan of
complete liquidation.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Sellers, the Servicer and the Trustee with the consent of the Insurer, but
without the consent of any of the Certificateholders, to cure any ambiguity,
or to correct or supplement any provisions herein, or to make such other
provisions with respect to matters or questions arising under this Agreement
as shall not be inconsistent with any other provisions herein; provided that
such action 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; provided, however, 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, the Sellers, and the
Servicer also may at any time and from time to time amend this Agreement
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
maintain the qualification of the Trust Fund as a REMIC under the Code or to
avoid or minimize the risk of the imposition of any tax on the REMIC pursuant
to the Code that would be a claim at any time prior to the final redemption
of the Certificates, 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 maintain such
qualification or to avoid or minimize the risk of the imposition of such a
tax.
This Agreement may be amended from time to time by the Seller, the
Servicer, the Depositor and the Trustee, without the consent of any of the
Certificateholders, to provide for termination of the Spread Account as
contemplated in Section 3A.01(e).
This Agreement may also be amended from time to time by the Depositor,
the Sellers, the Servicer and the Trustee with the consent of the Insurer and
the Holders of a Majority
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in Interest 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 (i), without the consent of the Holders
of Certificates of such Class evidencing, as to such Class, Percentage
Interests aggregating 66%, 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. Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
(which Opinion of Counsel shall not be at the expense of the Trustee or the
Trust Fund) stating that the execution of such amendment is authorized or
permitted by this Agreement. The Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's own rights, duties
or immunities under this Agreement.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have
first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on the REMIC or the Certificateholders or
cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders or the Insurer, the Trustee shall
furnish written notification of the substance or a copy of such amendment to
each Certificateholder, the Insurer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders or the
Insurer under this Section to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be
an expense of the Trustee or the Trust Fund) satisfactory to the Trustee that
(i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with and
(ii) either (A) the amendment does not adversely affect in any material
respect the interests of any Certificateholder or the Insurer or (B) the
conclusion set forth in the immediately preceding clause (A) is not required
to be reached pursuant to this Section 10.01.
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SECTION 10.02. Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages
are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Servicer at its expense,
but only upon direction by the Trustee accompanied by 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, taken together,
shall constitute 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 WITHOUT REGARD TO CONFLICT OF LAW
PRINCIPLES 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 of
the Loans by the Sellers to the Depositor pursuant to Article II of this
Agreement be, and be construed as, an absolute sale thereof to the Depositor.
It is, further, not the intention of the parties that such conveyance be
deemed a pledge thereof by the Sellers to the Depositor to secure a borrowing
by the Sellers from the Depositor. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Sellers or any one of them, or if this Agreement is held or
deemed to constitute or have created a loan, lending transaction or an
extension of credit by the Depositor to the Sellers or any one of them, then
and only then (i) this Agreement shall be deemed, effective as of ____, to be
a security agreement within the meaning of the Uniform Commercial Code of the
State of New York and (ii) the conveyance by the Sellers to the Depositor
provided for in this Agreement shall be deemed, effective as of ____, to be
an assignment and a grant by the Sellers to the Depositor, and each of the
Sellers does hereby grant and assign to the Depositor, a security interest
in, and lien upon, all of the assets that constitute the Mortgage Notes and
the Trust Fund, and all of the proceeds thereof, whether now owned or
hereafter acquired.
The Sellers, for the benefit of the Depositor, shall, in connection with
the perfection of the security interest described in the preceding paragraph
of this Section 10.04,
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deliver to the Depositor on the Closing Date the financing statements
described in Schedule IV. The Sellers shall also arrange for the delivery to
the Depositor of any appropriate Uniform Commercial Code continuation
statements as may be necessary or appropriate to continue the perfection of
the security interest of the Depositor in the Mortgage Notes and the Trust
Fund, and all of the proceeds thereof, whether now owned or hereafter
acquired. The Sellers, for the benefit of the Depositor, shall, to the extent
consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement is held or deemed to constitute or have
created a loan, lending transaction or an extension of credit by the
Depositor to the Sellers or any one of them, then and only then (i) this
Agreement shall be deemed, effective as of ____, to be a security agreement
within the meaning of the Uniform Commercial Code of the State of New York
and (ii) the conveyance by the Sellers to the Depositor provided for in this
Agreement shall be deemed, effective as of ____, to be an assignment and a
grant by the Sellers to the Depositor, and each of the Sellers does hereby
grant and assign to the Depositor, a security interest in, and lien upon, all
of the assets that constitute the Mortgage Notes and the Trust Fund, and all
of the proceeds thereof, whether now owned or hereafter acquired, such
security interest shall be deemed to be a perfected security interest of
first priority under applicable law, and will be maintained as such
throughout the term of this Agreement. The Sellers shall arrange for filing
any appropriate Uniform Commercial Code financing statements, continuation
statements or other appropriate forms, notices or documents in connection
with any security interest granted or assigned to the Depositor.
The Depositor does hereby assign the security interest in and lien on
the Mortgage Notes and the Trust Fund, and all proceeds thereof, whether now
owned or hereafter acquired, to the Trustee for the benefit of the
Certificateholders and the Insurer. The Depositor shall arrange for filing of
such Uniform Commercial Code financing statements as are necessary to effect
the assignment of the security interest and lien to the Trustee for the
benefit of the Certificateholders and the Insurer.
It is the express intent of the parties hereto that the conveyance of
the Trust Fund by the Depositor to the Trustee pursuant to Article II of this
Agreement be, and be construed as, an absolute sale thereof to the Trustee.
It is, further, not the intention of the parties that such conveyance be
deemed a pledge thereof by the Depositor to the Trustee to secure a borrowing
by the Depositor from the Trustee. However, in the event that,
notwithstanding the intent of the parties, the assets constituting the Trust
Fund are held to be the property of the Depositor, or if this Agreement is
held or deemed to constitute or have created a loan, lending transaction or
an extension of credit by the Trustee to the Depositor, then and only then
(i) this Agreement shall be deemed, effective as of ____, to be a security
agreement within the meaning of the Uniform Commercial Code of the State of
New York and (ii) the conveyance by the Depositor to the Trustee provided for
in this Agreement shall be deemed, effective as of ____, to be an assignment
and a grant by the Depositor to the Trustee, and the Depositor does hereby
grant and assign to the Trustee, for the benefit of the Certificateholders, a
security interest in, and lien upon, all of the assets that constitute the
Mortgage Notes and the Trust Fund, and all of the proceeds thereof, whether
now owned or hereafter acquired.
86
The Depositor, for the benefit of the Trustee, the Insurer and the
Certificateholders, shall, in connection with the perfection of the security
interest described in the preceding paragraph of this Section 10.04, deliver
to the Trustee on the Closing Date the financing statements described in
Schedule V. The Depositor shall also arrange for the delivery to the Trustee
of any appropriate Uniform Commercial Code continuation statements as may be
necessary or appropriate to continue the perfection of the security interest
of the Trustee in the Trust Fund, and all of the proceeds thereof, whether
now owned or hereafter acquired. The Depositor, for the benefit of the
Trustee and the Certificateholders, shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement is held or deemed to constitute or have created a loan, lending
transaction or an extension of credit by the Trustee to the Depositor, then
and only then (i) this Agreement shall be deemed, effective as of ____, to be
a security agreement within the meaning of the Uniform Commercial Code of the
State of New York and (ii) the conveyance by the Depositor to the Trustee
provided for in this Agreement shall be deemed, effective as of ____, to be
an assignment and a grant by the Depositor to the Trustee, and the Depositor
does hereby grant and assign to the Trustee, for the benefit of the
Certificateholders, a security interest in, and lien upon, all of the assets
that constitute the Mortgage Notes and the Trust Fund, and all of the
proceeds thereof, whether now owned or hereafter acquired, such security
interest shall be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the
term of this Agreement. The Servicer shall, within ten (10) days of the
Closing Date, present to the appropriate filing offices in the jurisdictions
set forth on Schedules IV and V all of the financing statements delivered on
the Closing Date by the Sellers to the Depositor, the assignments thereof
delivered by the Depositor to the Trustee on the Closing Date and the
financing statements delivered by the Depositor to the Trustee on the Closing
Date. The Servicer shall arrange for filing any appropriate Uniform
Commercial Code continuation statements or other appropriate forms, notices
or documents in connection with any security interest granted or assigned to
the Trustee.
SECTION 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide notice to
the Insurer and each Rating Agency with respect to each of the following of
which it has actual knowledge:
1. any material change or amendment to this Agreement;
2. the occurrence of any Event of Default that has not been cured;
3. the resignation or termination of the Servicer or the Trustee
and the appointment of any successor;
4. the repurchase or substitution of Loans pursuant to Section
2.03; and
87
5. the final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
1. each report to Certificateholders described in Section 4.03;
2. each annual statement as to compliance described in Section
3.16;
3. each annual independent public accountants' servicing report
described in Section 3.17; and
4. any notice of a purchase of a Loan pursuant to Section 2.02,
2.03 or 3.11.
(b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered to (a) in the case
of the Depositor, Equity One ABS, Inc., 000 Xxxxxxxx Xxxxxxxx, 0000
Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President, facsimile
number: (000) 000-0000, (b) in the case of the Servicer, Equity One, Inc.,
000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xx. Xxxxxx, Xxx Xxxxxx 00000, Attention:
President, facsimile number: (000) 000-0000, or such other address as may be
hereafter furnished to the Depositor and the Trustee by the Servicer in
writing, (c) in the case of Equity One-____, ____, Attention: President,
facsimile number: ____, (d) in the case of ____, ____, Attention: President,
facsimile number: ____, (e) in the case of ____, ____, Attention: President,
facsimile number: ____, (f) in the case of ____, ____, Attention: President,
facsimile number: ____, (g) in the case of ____, ____, Attention: President,
facsimile number: ____, (h) in the case of ____, ____, Attention: President,
facsimile number: ____, (i) in the case of ____, ____, Attention: President,
facsimile number: ____, (j) in the case of the Trustee____, ____, Attention:
____, facsimile number: ____, or such other address as the Trustee may
hereafter furnish to the Depositor or Servicer, (k) in the case of the
Insurer, ____, ____, Attention: ____, facsimile number: ____ and (l) in the
case 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.
88
Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.02, this Agreement may not be assigned by the Servicer
without the prior written consent of the Trustee, Insurer and Depositor.
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.
89
SECTION 10.09. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will permit and
will cause each Subservicer to permit any representative of the Depositor,
the Insurer or the Trustee during the Servicer's normal business hours, to
examine all the books of account, records, reports and other papers of the
Servicer relating to the 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 Loans with its officers, employees and
independent public accountants (and by this provision the Servicer hereby
authorizes said accountants to discuss with such representative such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested. Any out-of-pocket expense incident to the exercise by
the Depositor or the Trustee of any right under this Section 10.09 shall be
borne by the party requesting such inspection; all other such expenses shall
be borne by the Servicer or the related Subservicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof
by the Trustee pursuant to this Agreement, are and shall be deemed fully
paid.
SECTION 10.11. The Closing.
The closing of the transactions contemplated by this Agreement shall occur
at 10:00 a.m. Philadelphia Time on the Closing Date at the Closing Place.
SECTION 10.12. Interpretation.
Unless the context of this Agreement clearly requires otherwise, (a)
references to the plural include the singular, the singular the plural, the
part the whole, (b) references to one gender includes all genders, (c) "or"
has the inclusive meaning frequently identified with the phrase "and/or," (d)
"including" has the inclusive meaning frequently identified with the phrase
"but not limited to" and (e) references to "hereunder," "hereof" or "herein"
relate to this Agreement. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or affect the
construction of this Agreement or the interpretation thereof in any respect.
Section, subsection, schedule and exhibit references are to this Agreement
unless otherwise specified.
SECTION 10.13. Rights of the Insurer.
(a) The Insurer is an express third-party beneficiary of this Agreement.
90
(b) On each Distribution date the Trustee shall forward to the
Insurer a copy of the reports furnished to the Class A Certificateholders and
the Depositor on such Distribution Date.
(c) The Trustee shall provide to the Insurer copies of any report,
notice, Opinion of Counsel, Officer's Certificate, request for consent or
request for amendment to any document related hereto promptly upon the
Trustee's production or receipt thereof.
(d) Unless an Insurer Default exists, the Trustee and the Depositor
shall not agree to any amendment to this Agreement without first having
obtained the prior written consent of the Insurer, if such consent is not
unreasonably withheld.
(e) So long as there does not exist a failure by the Insurer to make a
required payment under the Policy, the Insurer shall have the right to
exercise all rights of the Holders of the Class A Certificates under this
Agreement without any consent of such Holders, and such Holders may exercise
such rights only with the prior written consent of the Insurer, except as
provided herein.
(f) The Insurer shall not be entitled to exercise any of its rights
hereunder so long as there exists a failure by the Insurer to make a required
payment under the Policy.
SECTION 10.14. No Partnership.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services
of the Trustee and the Servicer shall be rendered as an independent
contractor and not as agent for the Certificateholders.
* * * * * *
91
IN WITNESS WHEREOF, the Depositor, the Trustee, each of the Sellers and
the Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above
written.
Equity One ABS, Inc., as Depositor
By:
-------------------------------------------
Name:
Title:
__________, as Trustee
By:
-------------------------------------------
Name:
Title:
Equity One, Inc. (DE), as a Seller and Servicer
By:
-------------------------------------------
Name:
Title:
__________, as a Seller
By:
-------------------------------------------
Name:
Title:
__________, as a Seller
By:
-------------------------------------------
Name:
Title:
92
__________, as a Seller
By:
-------------------------------------------
Name:
Title:
__________, as a Seller
By:
-------------------------------------------
Name:
Title:
__________, as a Seller
By:
-------------------------------------------
Name:
Title:
__________, as a Seller
By:
-------------------------------------------
Name:
Title:
__________, as a Seller
By:
-------------------------------------------
Name:
Title:
93
SCHEDULE I
Loan Schedule
[SEE ATTACHED]
S-I-1
SCHEDULE IIA
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Representations and Warranties of Equity One-Delaware
Equity One-Delaware ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIA to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans related to Seller as set forth in
Schedule I. Capitalized terms used but not otherwise defined in this Schedule
IIA shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series, among Seller, the other Sellers and the Servicer
identified therein, Equity One ABS, Inc., as depositor, and ________, as
trustee.
(11) Seller is duly organized as a Delaware corporation and is
validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and all
business contemplated by the Pooling and Servicing Agreement to be
conducted by Seller in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Loan and to perform any of its other obligations
under the Pooling and Servicing Agreement in accordance with the terms
thereof.
(12) Seller has the full corporate power and authority to sell each
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by the Pooling and Servicing
Agreement and has duly authorized by all necessary corporate action on
the part of Seller the execution, delivery and performance of the
Pooling and Servicing Agreement; and the Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance
with its terms, except 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 equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
(13) The execution and delivery of the Pooling and Servicing Agreement
by Seller, the sale of the Loans by Seller under the Pooling and Servicing
Agreement, the consummation of any other of the transactions contemplated
by the Pooling and Servicing Agreement, and the fulfillment of or
compliance with the terms thereof are in the ordinary course of business of
Seller and will not (a) result in a material breach of any term or
provision of the charter or by-laws of Seller or (b) materially
S-IIA-1
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to which Seller is a party or by which it may be
bound or (c) constitute a material violation of any statute, order or
regulation applicable to Seller of any court, regulatory body,
administrative agency or governmental body having jurisdiction over Seller;
and Seller is not in breach or violation of any material indenture or other
material agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation may
materially impair Seller's ability to perform or meet any of its
obligations under the Pooling and Servicing Agreement.
(14) No litigation is pending or, to the best of Seller's
knowledge, threatened, against Seller that would materially and
adversely affect the execution, delivery or enforceability of the
Pooling and Servicing Agreement or the ability of Seller to sell the
Loans or to perform any of its other obligations under the Pooling and
Servicing Agreement in accordance with the terms thereof.
(15) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Pooling and
Servicing Agreement or the consummation of the transactions contemplated
thereby, or if any such consent, approval, authorization or order is
required, Seller has obtained the same.
(16) Seller intends to treat the conveyance of the Loans to the
Depositor as a sale of the Loans for all tax, accounting and regulatory
purposes.
(17) Seller is not insolvent nor is Seller aware of any pending
insolvency, and Seller will not become insolvent as a result of its sale
of the Loans under the Pooling and Servicing Agreement, and Seller's
sale of the Loans to the Depositor under the Pooling and Servicing
Agreement will not be made with any intent to hinder, delay or defraud
any of its creditors.
S-IIA-2
SCHEDULE IIB
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Representations and Warranties of Equity One-________
Equity One-________ ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIB to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans related to Seller as set forth in
Schedule I. Capitalized terms used but not otherwise defined in this Schedule
IIB shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series, among Seller, the other Sellers and the Servicer
identified therein, Equity One ABS, Inc., as depositor, and _________, as
trustee.
(1) Seller is duly organized as a ________corporation and is
validly existing and in good standing under the laws of the State of
________ and is duly authorized and qualified to transact any and all
business contemplated by the Pooling and Servicing Agreement to be
conducted by Seller in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Loan and to perform any of its other obligations
under the Pooling and Servicing Agreement in accordance with the terms
thereof.
(2) Seller has the full corporate power and authority to sell each
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by the Pooling and Servicing
Agreement and has duly authorized by all necessary corporate action on
the part of Seller the execution, delivery and performance of the
Pooling and Servicing Agreement; and the Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance
with its terms, except 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 equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Seller, the sale of the Loans by Seller under the Pooling
and Servicing Agreement, the consummation of any other of the
transactions contemplated by the Pooling and Servicing Agreement, and
the fulfillment of or compliance with the terms
S-IIB-1
thereof are in the ordinary course of business of Seller and will not
(a) result in a material breach of any term or provision of the charter
or by-laws of Seller or (b) materially conflict with, result in a
material breach, violation or acceleration of, or result in a material
default under, the terms of any other material agreement or instrument
to which Seller is a party or by which it may be bound or (c) constitute
a material violation of any statute, order or regulation applicable to
Seller of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Seller; and Seller is not in
breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair Seller's ability to perform or meet any of its
obligations under the Pooling and Servicing Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Pooling and Servicing
Agreement or the ability of Seller to sell the Loans or to perform any
of its other obligations under the Pooling and Servicing Agreement in
accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Pooling and
Servicing Agreement or the consummation of the transactions contemplated
thereby, or if any such consent, approval, authorization or order is
required, Seller has obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the
Depositor as a sale of the Loans for all tax, accounting and regulatory
purposes.
(7) Seller is not insolvent nor is Seller aware of any pending
insolvency, and Seller will not become insolvent as a result of its sale
of the Loans under the Pooling and Servicing Agreement, and Seller's
sale of the Loans to the Depositor under the Pooling and Servicing
Agreement will not be made with any intent to hinder, delay or defraud
any of its creditors.
S-IIB-2
SCHEDULE IIC
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Representations and Warranties of Equity One-________
Equity One-________ ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIC to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans related to Seller as set forth in
Schedule I. Capitalized terms used but not otherwise defined in this Schedule
IIC shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series, among Seller, the other Sellers and the Servicer
identified therein, Equity One ABS, Inc., as depositor, and ________, as
trustee.
(1) Seller is duly organized as a ________corporation and is
validly existing and in good standing under the laws of the State of
________and is duly authorized and qualified to transact any and all
business contemplated by the Pooling and Servicing Agreement to be
conducted by Seller in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Loan and to perform any of its other obligations
under the Pooling and Servicing Agreement in accordance with the terms
thereof.
(2) Seller has the full corporate power and authority to sell each
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by the Pooling and Servicing
Agreement and has duly authorized by all necessary corporate action on
the part of Seller the execution, delivery and performance of the
Pooling and Servicing Agreement; and the Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance
with its terms, except 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 equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Seller, the sale of the Loans by Seller under the Pooling
and Servicing Agreement, the consummation of any other of the
transactions contemplated by the Pooling and Servicing Agreement, and
the fulfillment of or compliance with the terms thereof are in the
ordinary course of business of Seller and will not (a) result in a
material
S-IIC-1
breach of any term or provision of the charter or by-laws of Seller or
(b) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which Seller is a party or by
which it may be bound or (c) constitute a material violation of any
statute, order or regulation applicable to Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Seller; and Seller is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Seller's ability
to perform or meet any of its obligations under the Pooling and
Servicing Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Pooling and Servicing
Agreement or the ability of Seller to sell the Loans or to perform any
of its other obligations under the Pooling and Servicing Agreement in
accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Pooling and
Servicing Agreement or the consummation of the transactions contemplated
thereby, or if any such consent, approval, authorization or order is
required, Seller has obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the
Depositor as a sale of the Loans for all tax, accounting and regulatory
purposes.
(7) Seller is not insolvent nor is Seller aware of any pending
insolvency, and Seller will not become insolvent as a result of its sale
of the Loans under the Pooling and Servicing Agreement, and Seller's
sale of the Loans to the Depositor under the Pooling and Servicing
Agreement will not be made with any intent to hinder, delay or defraud
any of its creditors.
S-IIC-2
SCHEDULE IID
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Representations and Warranties of Equity One-________
Equity One-________ ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IID to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans related to Seller as set forth in
Schedule I. Capitalized terms used but not otherwise defined in this Schedule
IID shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series, among Seller, the other Sellers and the Servicer
identified therein, Equity One ABS, Inc., as depositor, and ________, as
trustee.
(1) Seller is duly organized as a ________corporation and is
validly existing and in good standing under the laws of the State of
________and is duly authorized and qualified to transact any and all
business contemplated by the Pooling and Servicing Agreement to be
conducted by Seller in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Loan and to perform any of its other obligations
under the Pooling and Servicing Agreement in accordance with the terms
thereof.
(2) Seller has the full corporate power and authority to sell each
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by the Pooling and Servicing
Agreement and has duly authorized by all necessary corporate action on
the part of Seller the execution, delivery and performance of the
Pooling and Servicing Agreement; and the Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance
with its terms, except 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 equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Seller, the sale of the Loans by Seller under the Pooling
and Servicing Agreement, the consummation of any other of the
transactions contemplated by the Pooling and Servicing Agreement, and
the fulfillment of or compliance with the terms thereof are in the
ordinary course of business of Seller and will not (a) result in a
material
S-IID-1
breach of any term or provision of the charter or by-laws of Seller or
(b) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which Seller is a party or by
which it may be bound or (c) constitute a material violation of any
statute, order or regulation applicable to Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Seller; and Seller is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Seller's ability
to perform or meet any of its obligations under the Pooling and
Servicing Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Pooling and Servicing
Agreement or the ability of Seller to sell the Loans or to perform any
of its other obligations under the Pooling and Servicing Agreement in
accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Pooling and
Servicing Agreement or the consummation of the transactions contemplated
thereby, or if any such consent, approval, authorization or order is
required, Seller has obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the
Depositor as a sale of the Loans for all tax, accounting and regulatory
purposes.
(7) Seller is not insolvent nor is Seller aware of any pending
insolvency, and Seller will not become insolvent as a result of its sale
of the Loans under the Pooling and Servicing Agreement, and Seller's
sale of the Loans to the Depositor under the Pooling and Servicing
Agreement will not be made with any intent to hinder, delay or defraud
any of its creditors.
S-IID-2
SCHEDULE IIE
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Representations and Warranties of Equity One-________
Equity One-________ ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIE to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans related to Seller as set forth in
Schedule I. Capitalized terms used but not otherwise defined in this Schedule
IIE shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series, among Seller, the other Sellers and the Servicer
identified therein, Equity One ABS, Inc., as depositor, and ________, as
trustee.
(1) Seller is duly organized as a ________corporation and is
validly existing and in good standing under the laws of the State of
________and is duly authorized and qualified to transact any and all
business contemplated by the Pooling and Servicing Agreement to be
conducted by Seller in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Loan and to perform any of its other obligations
under the Pooling and Servicing Agreement in accordance with the terms
thereof.
(2) Seller has the full corporate power and authority to sell each
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by the Pooling and Servicing
Agreement and has duly authorized by all necessary corporate action on
the part of Seller the execution, delivery and performance of the
Pooling and Servicing Agreement; and the Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance
with its terms, except 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 equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Seller, the sale of the Loans by Seller under the Pooling
and Servicing Agreement, the consummation of any other of the
transactions contemplated by the Pooling and Servicing Agreement, and
the fulfillment of or compliance with the terms thereof are in the
ordinary course of business of Seller and will not (a) result in a
material
S-IIE-1
breach of any term or provision of the charter or by-laws of Seller or
(b) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which Seller is a party or by
which it may be bound or (c) constitute a material violation of any
statute, order or regulation applicable to Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Seller; and Seller is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Seller's ability
to perform or meet any of its obligations under the Pooling and
Servicing Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Pooling and Servicing
Agreement or the ability of Seller to sell the Loans or to perform any
of its other obligations under the Pooling and Servicing Agreement in
accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Pooling and
Servicing Agreement or the consummation of the transactions contemplated
thereby, or if any such consent, approval, authorization or order is
required, Seller has obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the
Depositor as a sale of the Loans for all tax, accounting and regulatory
purposes.
(7) Seller is not insolvent nor is Seller aware of any pending
insolvency, and Seller will not become insolvent as a result of its sale
of the Loans under the Pooling and Servicing Agreement, and Seller's
sale of the Loans to the Depositor under the Pooling and Servicing
Agreement will not be made with any intent to hinder, delay or defraud
any of its creditors.
S-IIE-2
SCHEDULE IIF
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Representations and Warranties of Equity One-________
Equity One-________ ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIF to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans related to Seller as set forth in
Schedule I. Capitalized terms used but not otherwise defined in this Schedule
IIF shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series, among Seller, the other Sellers and the Servicer
identified therein, Equity One ABS, Inc., as depositor, and ________, as
trustee.
(1) Seller is duly organized as a ________corporation and is
validly existing and in good standing under the laws of the State of
________and is duly authorized and qualified to transact any and all
business contemplated by the Pooling and Servicing Agreement to be
conducted by Seller in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Loan and to perform any of its other obligations
under the Pooling and Servicing Agreement in accordance with the terms
thereof.
(2) Seller has the full corporate power and authority to sell each
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by the Pooling and Servicing
Agreement and has duly authorized by all necessary corporate action on
the part of Seller the execution, delivery and performance of the
Pooling and Servicing Agreement; and the Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance
with its terms, except 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 equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and Servicing Agreement
by Seller, the sale of the Loans by Seller under the Pooling and Servicing
Agreement, the consummation of any other of the transactions contemplated
by the Pooling and Servicing Agreement, and the fulfillment of or
compliance with the terms thereof are in the ordinary course of business of
Seller and will not (a) result in a material breach of any term or
provision of the charter or by-laws of Seller or (b) materially
S-IIF-1
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to which Seller is a party or by which it may be
bound or (c) constitute a material violation of any statute, order or
regulation applicable to Seller of any court, regulatory body,
administrative agency or governmental body having jurisdiction over Seller;
and Seller is not in breach or violation of any material indenture or other
material agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation may
materially impair Seller's ability to perform or meet any of its
obligations under the Pooling and Servicing Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Pooling and Servicing
Agreement or the ability of Seller to sell the Loans or to perform any
of its other obligations under the Pooling and Servicing Agreement in
accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Pooling and
Servicing Agreement or the consummation of the transactions contemplated
thereby, or if any such consent, approval, authorization or order is
required, Seller has obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the
Depositor as a sale of the Loans for all tax, accounting and regulatory
purposes.
(7) Seller is not insolvent nor is Seller aware of any pending
insolvency, and Seller will not become insolvent as a result of its sale
of the Loans under the Pooling and Servicing Agreement, and Seller's
sale of the Loans to the Depositor under the Pooling and Servicing
Agreement will not be made with any intent to hinder, delay or defraud
any of its creditors.
S-IIF-2
SCHEDULE IIG
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Representations and Warranties of Equity One-________
Equity One-________ ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIG to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans related to Seller as set forth in
Schedule I. Capitalized terms used but not otherwise defined in this Schedule
IIG shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series, among Seller, the other Sellers and the Servicer
identified therein, Equity One ABS, Inc., as depositor, and ________, as
trustee.
(1) Seller is duly organized as a ________corporation and is
validly existing and in good standing under the laws of the Commonwealth
of ________and is duly authorized and qualified to transact any and all
business contemplated by the Pooling and Servicing Agreement to be
conducted by Seller in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Loan and to perform any of its other obligations
under the Pooling and Servicing Agreement in accordance with the terms
thereof.
(2) Seller has the full corporate power and authority to sell each
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by the Pooling and Servicing
Agreement and has duly authorized by all necessary corporate action on
the part of Seller the execution, delivery and performance of the
Pooling and Servicing Agreement; and the Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance
with its terms, except 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 equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Seller, the sale of the Loans by Seller under the Pooling
and Servicing Agreement, the consummation of any other of the
transactions contemplated by the Pooling and Servicing Agreement, and
the fulfillment of or compliance with the terms thereof are in the
ordinary course of business of Seller and will not (a) result in a
material
S-IIG-1
breach of any term or provision of the charter or by-laws of Seller or
(b) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which Seller is a party or by
which it may be bound or (c) constitute a material violation of any
statute, order or regulation applicable to Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Seller; and Seller is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Seller's ability
to perform or meet any of its obligations under the Pooling and
Servicing Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Pooling and Servicing
Agreement or the ability of Seller to sell the Loans or to perform any
of its other obligations under the Pooling and Servicing Agreement in
accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Pooling and
Servicing Agreement or the consummation of the transactions contemplated
thereby, or if any such consent, approval, authorization or order is
required, Seller has obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the
Depositor as a sale of the Loans for all tax, accounting and regulatory
purposes.
(7) Seller is not insolvent nor is Seller aware of any pending
insolvency, and Seller will not become insolvent as a result of its sale
of the Loans under the Pooling and Servicing Agreement, and Seller's
sale of the Loans to the Depositor under the Pooling and Servicing
Agreement will not be made with any intent to hinder, delay or defraud
any of its creditors.
S-IIG-2
SCHEDULE IIH
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Representations and Warranties of Equity One-________
Equity One-________ ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIH to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans related to Seller as set forth in
Schedule I. Capitalized terms used but not otherwise defined in this Schedule
IIH shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series, among Seller, the other Sellers and the Servicer
identified therein, Equity One ABS, Inc., as depositor, and ________, as
trustee.
(1) Seller is duly organized as a ________corporation and is
validly existing and in good standing under the laws of the State of
________and is duly authorized and qualified to transact any and all
business contemplated by the Pooling and Servicing Agreement to be
conducted by Seller in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Loan and to perform any of its other obligations
under the Pooling and Servicing Agreement in accordance with the terms
thereof.
(2) Seller has the full corporate power and authority to sell each
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by the Pooling and Servicing
Agreement and has duly authorized by all necessary corporate action on
the part of Seller the execution, delivery and performance of the
Pooling and Servicing Agreement; and the Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance
with its terms, except 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 equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Seller, the sale of the Loans by Seller under the Pooling
and Servicing Agreement, the consummation of any other of the
transactions contemplated by the Pooling and Servicing Agreement, and
the fulfillment of or compliance with the terms thereof are in the
ordinary course of business of Seller and will not (a) result in a
material
S-IIH-1
breach of any term or provision of the charter or by-laws of Seller or
(b) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which Seller is a party or by
which it may be bound or (c) constitute a material violation of any
statute, order or regulation applicable to Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Seller; and Seller is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Seller's ability
to perform or meet any of its obligations under the Pooling and
Servicing Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Pooling and Servicing
Agreement or the ability of Seller to sell the Loans or to perform any
of its other obligations under the Pooling and Servicing Agreement in
accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Pooling and
Servicing Agreement or the consummation of the transactions contemplated
thereby, or if any such consent, approval, authorization or order is
required, Seller has obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the
Depositor as a sale of the Loans for all tax, accounting and regulatory
purposes.
(7) Seller is not insolvent nor is Seller aware of any pending
insolvency, and Seller will not become insolvent as a result of its sale
of the Loans under the Pooling and Servicing Agreement, and Seller's
sale of the Loans to the Depositor under the Pooling and Servicing
Agreement will not be made with any intent to hinder, delay or defraud
any of its creditors.
S-IIH-2
SCHEDULE IIX
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Representations and Warranties of the Servicer
Equity-One Delaware, in its capacity as Servicer, hereby makes the
representations and warranties set forth in this Schedule IIX to the
Depositor, and the Trustee, as of the Closing Date, or if so specified
herein, as of the Cut-off Date with respect to the Loans set forth in
Schedule I. Capitalized terms used but not otherwise defined in this Schedule
IIX shall have the meanings ascribed thereto in the Pooling and Servicing
Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series, among Servicer, the Sellers identified therein,
Equity One ABS, Inc., as depositor, and ________, as trustee.
(1) Servicer is duly organized as a Delaware corporation and is
validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and all
business contemplated by the Pooling and Servicing Agreement to be
conducted by Servicer in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to service the Loans in accordance with the terms of the Pooling
and Servicing Agreement and to perform any of its other obligations
under the Pooling and Servicing Agreement in accordance with the terms
thereof.
(2) Servicer has the full corporate power and authority to service
each Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by the Pooling and Servicing
Agreement and has duly authorized by all necessary corporate action on
the part of Servicer the execution, delivery and performance of the
Pooling and Servicing Agreement; and the Pooling and Servicing
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Servicer, enforceable against Servicer in
accordance with its terms, except 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 equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of the Pooling and Servicing
Agreement by Servicer, the servicing of the Loans by Servicer under the
Pooling and Servicing Agreement, the consummation of any other of the
transactions contemplated by the Pooling and Servicing Agreement, and
the fulfillment of or compliance with the terms
S-IIX-1
thereof are in the ordinary course of business of Servicer and will not (a)
result in a material breach of any term or provision of the charter or
by-laws of Servicer or (b) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument to which
Servicer is a party or by which it may be bound or (c) constitute a
material violation of any statute, order or regulation applicable to
Servicer of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Servicer; and Servicer is not in
breach or violation of any material indenture or other material agreement
or instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair
Servicer's ability to perform or meet any of its obligations under the
Pooling and Servicing Agreement.
(4) No litigation is pending or, to the best of Servicer's
knowledge, threatened, against Servicer that would materially and
adversely affect the execution, delivery or enforceability of the
Pooling and Servicing Agreement or the ability of Servicer to service
the Loans or to perform any of its other obligations under the Pooling
and Servicing Agreement in accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Servicer of, or compliance by Servicer with, the Pooling
and Servicing Agreement or the consummation of the transactions
contemplated thereby, or if any such consent, approval, authorization or
order is required, Servicer has obtained the same.
S-IIX-2
SCHEDULE IIIA
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Loan Representations and Warranties of Equity One-Delaware
Equity One-Delaware ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIIA to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans, Mortgages, Mortgage Notes and
Mortgaged Properties related to Seller set forth or referenced on Schedule I.
Capitalized terms used but not otherwise defined in this Schedule IIIA shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement
(the "POOLING AND SERVICING AGREEMENT") relating to the above-referenced
Series, among Seller, the other Sellers and the Servicer identified therein,
Equity One ABS, Inc., as depositor, and ________, as trustee.
(1) The information set forth on Schedule I to the Pooling and
Servicing Agreement with respect to the Loans is true and correct in all
material respects as of the Closing Date.
(2) As of the Cut-off Date, (i) no Loan was contractually
delinquent for 60 or more days and (ii) not more than ________% (by
principal balance) of the Loans set forth on Schedule I were between 30
and 59 days contractually delinquent.
(3) No Loan had a Combined Loan-to-Value Ratio at origination in
excess of ________%. For purposes of determining the date of origination
on which each Loan's Combined Loan-to-Value Ratio is measured, no Loan
has been significantly modified within the meaning of Treasury
Regulation 1.860G-2(b) as of the Closing Date.
(4) Each Mortgage is a valid and enforceable first or second lien
on the referenced Mortgaged Property subject only to (a) the lien of non
delinquent current real property taxes and assessments, (b) covenants,
conditions and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Loan and (c) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage.
(5) Immediately prior to the assignment of the Loans to the
Depositor, the Seller had good title to, and was the sole owner of, each
such Loan free and clear of any pledge, lien (except in the case of a
Second Lien Loan, which shall be subject to prior liens approved by
Seller), encumbrance or security interest and had full right and
S-IIIA-1
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to the
Pooling and Servicing Agreement.
(6) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(7) There is no valid right of rescission, offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those which
are insured against by the title insurance policy referred to in item
(12) below.
(9) To the best of the Seller's knowledge, each Mortgaged Property
is free of material damage and in good repair.
(10) Each Loan at origination complied in all material respects
with applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(11) As of the Closing Date, neither the Seller nor any prior
holder of any Mortgage has modified the Mortgage in any material respect
(except that a Loan may have been modified by a written instrument which
has been recorded or submitted for recordation, if necessary, to protect
the interests of the Certificateholders and the original or a copy of
which has been or shall be delivered to the Trustee); satisfied,
canceled or subordinated such Mortgage in whole or in part; released the
related Mortgaged Property in whole or in part from the lien of such
Mortgage; or executed any instrument of release, cancellation,
modification or satisfaction with respect thereto.
(12) For each Loan, a lender's policy of title insurance together
with a condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Loan, each
such policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in paragraph (4) above;
to the best of the Seller's knowledge, no claims have been made under
such mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has
S-IIIA-2
done, by act or omission, anything which would impair the coverage of
such mortgage title insurance policy.
(13) To the best of the Seller's knowledge, all of the improvements
which were included for the purpose of determining the appraised value
of each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(14) To the best of the Seller's knowledge, no improvement located
on or being part of any Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of such Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
such Mortgaged Property is lawfully occupied under applicable law.
(15) Each Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(16) The proceeds of each Loan have been fully disbursed, there is
no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making, or closing or
recording such Loans were paid.
(17) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for
the realization against the related Mortgaged Property of the benefits
of the security, including, (a) in the case of a Mortgage designated as
a deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(18) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
S-IIIA-3
(19) Each Mortgage Note and each Mortgage is in substantially one
of the forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(20) The origination, underwriting and collection practices used by
the Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(21) There is no pledged account or other security other than any
Escrow Account and real estate securing the Mortgagor's obligations.
(22) No Loan has a shared appreciation feature, or other contingent
interest feature.
(23) Each Loan contains a customary "due on sale" clause.
(24) At the Cut-off Date, the improvements on each Mortgaged
Property were covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the
area where such Mortgaged Property is located in an amount at least
equal to the lesser of (a) the maximum insurable value of the
improvements on such Mortgaged Property or (b) (i) in the case of a Loan
secured by a Mortgage creating a first lien on such Mortgaged Property,
the original principal balance of such Loan, or (ii) in the case of a
Loan which is subject to a prior loan or prior loans, the combined
principal balances of such Loan and the prior loan(s). If such Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the condominium unit. For all Mortgages
creating a first lien on the related Mortgaged Property, all such
individual insurance policies and all flood policies referred to in item
(25) below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(25) If a Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended, and if Seller has received
S-IIIA-4
any notice of non-payment of any premium or cancellation of any such
policy, Seller has required or is in the process of requiring the
reinstatement of such insurance.
(26) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation
of any Mortgaged Property.
(27) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material 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 of acceleration under
such Mortgage or related Mortgage Note; and the Seller has not waived
any default, breach, violation or event of acceleration.
(28) Each Mortgaged Property is improved by a mixed use building or
a one- to four-family residential dwelling including condominium units,
which, to the best of Seller's knowledge, does not include cooperatives
or mobile homes and does not constitute other than real property under
state law.
(29) Each Loan is being serviced by the Servicer.
(30) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related Loan Schedule. The consolidated principal amount does not exceed
the original principal amount of such Loan. No Mortgage Note permits or
obligates the Servicer to make future advances to the Mortgagor at the
option of the Mortgagor.
(31) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, except for items
which have been assessed, but are not yet due and payable. Except for
(a) payments in the nature of escrow payments, and (b) interest accruing
from the date of any Mortgage Note or date of disbursement of the
related Mortgage proceeds, whichever is later, to the day which precedes
by one month the Due Date of the first installment of principal and
interest, including without limitation, taxes and insurance payments,
the Servicer has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the
related Mortgage.
(32) Each Loan was underwritten in all material respects in
accordance with the Seller's underwriting guidelines as set forth in the
Prospectus Supplement.
S-IIIA-5
(33) An appraisal of each Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(34) No Loan is a graduated payment mortgage loan or a growing
equity mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
(35) The Loans were selected from among the outstanding fixed-rate
residential mortgage or mixed use loans in Seller's portfolio at the
Closing Date as to which the representations and warranties made as to
such Loans set forth in this Schedule IIIA can be made. Such selection
was not made in a manner that would adversely affect the interests of
Certificateholders or the Insurer.
(36) Each Loan has a payment date on or before its Due Date in the
month of the first Distribution Date.
(37) Approximately (a) ________% of the Group I Loans and (b)
________% of the Group II Loans are balloon loans as described in the
Prospectus Supplement.
(38) No Loan is subject to negative amortization or deferred
interest payments.
(39) No Mortgagor has requested relief under the Relief Act.
(40) None of the Loans are retail installment contracts for goods
or services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans" as
such terms are defined in 16 C.F.R. ss.433.1.
(41) No Mortgagor has or will have a claim or defense against
Seller or any assignor or assignee of Seller under any express or
implied warranty with respect to goods or services provided in
connection with any Loan.
(42) Each Loan is a "qualified mortgage" for purposes of Section
860G(a)(3) of the Code.
(43) The Loans, individually and in the aggregate, conform in all
material respects to the descriptions thereof in the Prospectus
Supplement.
(44) There exist no deficiencies with respect to escrow deposits
and payments, if such are required, for which customary arrangements for
repayment thereof
S-IIIA-6
have not been made, and no escrow deposits or payments of other charges
or payments due the Seller have been capitalized under any Mortgage or
related Mortgage Note.
(45) Each Group I Loan conforms to the following guidelines of FNMA
and FHLMC: at origination (i) each Loan in a first lien position had a
principal balance not exceeding (a) $________in the case of a one-family
dwelling, (b) $________in the case of a two-family dwelling, (c)
$________in the case of a three-family dwelling and (d) $________in the
case of a four-family dwelling, and (ii) each Second Lien Loan (a) had a
principal balance not exceeding $________and (b) had a principal balance
which, when added to the principal balance of the related senior loan at
such time, did not exceed $________in the aggregate.
S-IIIA-7
SCHEDULE IIIB
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Loan Representations and Warranties of Equity One-Florida
Equity One-Florida ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIIB to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans, Mortgages, Mortgage Notes and
Mortgaged Properties related to Seller set forth or referenced on Schedule I.
Capitalized terms used but not otherwise defined in this Schedule IIIB shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement
(the "POOLING AND SERVICING AGREEMENT") relating to the above-referenced
Series, among Seller, the other Sellers and the Servicer identified therein,
Equity One ABS, Inc., as depositor, and ________, as trustee.
(1) The information set forth on Schedule I to the Pooling and
Servicing Agreement with respect to the Loans is true and correct in all
material respects as of the Closing Date.
(2) As of the Cut-off Date, (i) no Loan was contractually
delinquent for 60 or more days and (ii) not more than ________% (by
principal balance) of the Loans were between 30 and 59 days
contractually delinquent.
(3) No Loan had a Combined Loan-to-Value Ratio at origination in
excess of ________%. For purposes of determining the date of origination
on which each Loan's Combined Loan-to-Value Ratio is measured, no Loan
has been significantly modified within the meaning of Treasury
Regulation 1.860G-2(b) as of the Closing Date.
(4) Each Mortgage is a valid and enforceable first or second lien
on the referenced Mortgaged Property subject only to (a) the lien of non
delinquent current real property taxes and assessments, (b) covenants,
conditions and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Loan and (c) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage.
(5) Immediately prior to the assignment of the Loans to the
Depositor, the Seller had good title to, and was the sole owner of, each
such Loan free and clear of any pledge, lien (except in the case of a
Second Lien Loan, which shall be subject to prior liens approved by
Seller), encumbrance or security interest and had full right and
S-IIIB-1
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to the
Pooling and Servicing Agreement.
(6) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(7) There is no valid right of rescission, offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those which
are insured against by the title insurance policy referred to in item
(12) below.
(9) To the best of the Seller's knowledge, each Mortgaged Property
is free of material damage and in good repair.
(10) Each Loan at origination complied in all material respects
with applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(11) As of the Closing Date, neither the Seller nor any prior
holder of any Mortgage has modified the Mortgage in any material respect
(except that a Loan may have been modified by a written instrument which
has been recorded or submitted for recordation, if necessary, to protect
the interests of the Certificateholders and the original or a copy of
which has been or shall be delivered to the Trustee); satisfied,
canceled or subordinated such Mortgage in whole or in part; released the
related Mortgaged Property in whole or in part from the lien of such
Mortgage; or executed any instrument of release, cancellation,
modification or satisfaction with respect thereto.
(12) For each Loan, a lender's policy of title insurance together
with a condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Loan, each
such policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in paragraph (4) above;
to the best of the Seller's knowledge, no claims have been made under
such mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has
S-IIIB-2
done, by act or omission, anything which would impair the coverage of
such mortgage title insurance policy.
(13) To the best of the Seller's knowledge, all of the improvements
which were included for the purpose of determining the appraised value
of each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(14) To the best of the Seller's knowledge, no improvement located
on or being part of any Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of such Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
such Mortgaged Property is lawfully occupied under applicable law.
(15) Each Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(16) The proceeds of each Loan have been fully disbursed, there is
no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making, or closing or
recording such Loans were paid.
(17) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for
the realization against the related Mortgaged Property of the benefits
of the security, including, (a) in the case of a Mortgage designated as
a deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(18) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
S-IIIB-3
(19) Each Mortgage Note and each Mortgage is in substantially one
of the forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(20) The origination, underwriting and collection practices used by
the Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(21) There is no pledged account or other security other than any
Escrow Account and real estate securing the Mortgagor's obligations.
(22) No Loan has a shared appreciation feature, or other contingent
interest feature.
(23) Each Loan contains a customary "due on sale" clause.
(24) At the Cut-off Date, the improvements on each Mortgaged
Property were covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the
area where such Mortgaged Property is located in an amount at least
equal to the lesser of (a) the maximum insurable value of the
improvements on such Mortgaged Property or (b) (i) in the case of a Loan
secured by a Mortgage creating a first lien on such Mortgaged Property,
the original principal balance of such Loan, or (ii) in the case of a
Loan which is subject to a prior loan or prior loans, the combined
principal balances of such Loan and the prior loan(s). If such Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the condominium unit. For all Mortgages
creating a first lien on the related Mortgaged Property, all such
individual insurance policies and all flood policies referred to in item
(25) below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(25) If a Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended, and if Seller has received
S-IIIB-4
any notice of non-payment of any premium or cancellation of any such
policy, Seller has required or is in the process of requiring the
reinstatement of such insurance.
(26) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation
of any Mortgaged Property.
(27) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material 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 of acceleration under
such Mortgage or related Mortgage Note; and the Seller has not waived
any default, breach, violation or event of acceleration.
(28) Each Mortgaged Property is improved by a mixed use building or
a one- to four-family residential dwelling including condominium units,
which, to the best of Seller's knowledge, does not include cooperatives
or mobile homes and does not constitute other than real property under
state law.
(29) Each Loan is being serviced by the Servicer.
(30) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related Loan Schedule. The consolidated principal amount does not exceed
the original principal amount of such Loan. No Mortgage Note permits or
obligates the Servicer to make future advances to the Mortgagor at the
option of the Mortgagor.
(31) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, except for items
which have been assessed, but are not yet due and payable. Except for
(a) payments in the nature of escrow payments, and (b) interest accruing
from the date of any Mortgage Note or date of disbursement of the
related Mortgage proceeds, whichever is later, to the day which precedes
by one month the Due Date of the first installment of principal and
interest, including without limitation, taxes and insurance payments,
the Servicer has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the
related Mortgage.
(32) Each Loan was underwritten in all material respects in
accordance with the Seller's underwriting guidelines as set forth in the
Prospectus Supplement.
S-IIIB-5
(33) An appraisal of each Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(34) No Loan is a graduated payment mortgage loan or a growing
equity mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
(35) The Loans were selected from among the outstanding fixed-rate
residential mortgage or mixed use loans in Seller's portfolio at the
Closing Date as to which the representations and warranties made as to
such Loans set forth in this Schedule IIIA can be made. Such selection
was not made in a manner that would adversely affect the interests of
Certificateholders or the Insurer.
(36) Each Loan has a payment date on or before its Due Date in the
month of the first Distribution Date.
(37) Approximately (a) ________% of the Group I Loans and (b)
________% of the Group II Loans are balloon loans as described in the
Prospectus Supplement.
(38) No Loan is subject to negative amortization or deferred
interest payments.
(39) No Mortgagor has requested relief under the Relief Act.
(40) None of the Loans are retail installment contracts for goods
or services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans" as
such terms are defined in 16 C.F.R. ss.433.1.
(41) No Mortgagor has or will have a claim or defense against
Seller or any assignor or assignee of Seller under any express or
implied warranty with respect to goods or services provided in
connection with any Loan.
(42) Each Loan is a "qualified mortgage" for purposes of Section
860G(a)(3) of the Code.
(43) The Loans, individually and in the aggregate, conform in all
material respects to the descriptions thereof in the Prospectus
Supplement.
(44) There exist no deficiencies with respect to escrow deposits
and payments, if such are required, for which customary arrangements for
repayment thereof
S-IIIB-6
have not been made, and no escrow deposits or payments of other charges
or payments due the Seller have been capitalized under any Mortgage or
related Mortgage Note.
(1) Each Group I Loan conforms to the following guidelines of FNMA
and FHLMC: at origination (i) each Loan in a first lien position had a
principal balance not exceeding (a) $________in the case of a one-family
dwelling, (b) $________in the case of a two-family dwelling, (c)
$________in the case of a three-family dwelling and (d) $________in the
case of a four-family dwelling, and (ii) each Second Lien Loan (a) had a
principal balance not exceeding $________and (b) had a principal balance
which, when added to the principal balance of the related senior loan at
such time, did not exceed $________in the aggregate.
S-IIIB-7
SCHEDULE IIIC
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Loan Representations and Warranties of Equity One-Minnesota
Equity One-Minnesota ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIIC to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans, Mortgages, Mortgage Notes and
Mortgaged Properties related to Seller set forth or referenced on Schedule I.
Capitalized terms used but not otherwise defined in this Schedule IIIC shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement
(the "POOLING AND SERVICING AGREEMENT") relating to the above-referenced
Series, among Seller, the other Sellers and the Servicer identified therein,
Equity One ABS, Inc., as depositor, and ________, as trustee.
(1) The information set forth on Schedule I to the Pooling and
Servicing Agreement with respect to the Loans is true and correct in all
material respects as of the Closing Date.
(2) As of the Cut-off Date, (i) no Loan was contractually
delinquent for 60 or more days and (ii) not more than ________% (by
principal balance) of the Loans were between 30 and 59 days
contractually delinquent.
(3) No Loan had a Combined Loan-to-Value Ratio at origination in
excess of ________%. For purposes of determining the date of origination
on which each Loan's Combined Loan-to-Value Ratio is measured, no Loan
has been significantly modified within the meaning of Treasury
Regulation 1.860G-2(b) as of the Closing Date.
(4) Each Mortgage is a valid and enforceable first or second lien
on the referenced Mortgaged Property subject only to (a) the lien of non
delinquent current real property taxes and assessments, (b) covenants,
conditions and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Loan and (c) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage.
(5) Immediately prior to the assignment of the Loans to the
Depositor, the Seller had good title to, and was the sole owner of, each
such Loan free and clear of any pledge, lien (except in the case of a
Second Lien Loan, which shall be subject to prior liens approved by
Seller), encumbrance or security interest and had full right and
S-IIIC-1
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to the
Pooling and Servicing Agreement.
(6) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(7) There is no valid right of rescission, offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those which
are insured against by the title insurance policy referred to in item
(12) below.
(9) To the best of the Seller's knowledge, each Mortgaged Property
is free of material damage and in good repair.
(10) Each Loan at origination complied in all material respects
with applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(11) As of the Closing Date, neither the Seller nor any prior
holder of any Mortgage has modified the Mortgage in any material respect
(except that a Loan may have been modified by a written instrument which
has been recorded or submitted for recordation, if necessary, to protect
the interests of the Certificateholders and the original or a copy of
which has been or shall be delivered to the Trustee); satisfied,
canceled or subordinated such Mortgage in whole or in part; released the
related Mortgaged Property in whole or in part from the lien of such
Mortgage; or executed any instrument of release, cancellation,
modification or satisfaction with respect thereto.
(12) For each Loan, a lender's policy of title insurance together
with a condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Loan, each
such policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in paragraph (4) above;
to the best of the Seller's knowledge, no claims have been made under
such mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has
S-IIIC-2
done, by act or omission, anything which would impair the coverage of
such mortgage title insurance policy.
(13) To the best of the Seller's knowledge, all of the improvements
which were included for the purpose of determining the appraised value
of each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(14) To the best of the Seller's knowledge, no improvement located
on or being part of any Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of such Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
such Mortgaged Property is lawfully occupied under applicable law.
(15) Each Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(16) The proceeds of each Loan have been fully disbursed, there is
no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making, or closing or
recording such Loans were paid.
(17) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for
the realization against the related Mortgaged Property of the benefits
of the security, including, (a) in the case of a Mortgage designated as
a deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(18) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
S-IIIC-3
(19) Each Mortgage Note and each Mortgage is in substantially one
of the forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(20) The origination, underwriting and collection practices used by
the Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(21) There is no pledged account or other security other than any
Escrow Account and real estate securing the Mortgagor's obligations.
(22) No Loan has a shared appreciation feature, or other contingent
interest feature.
(23) Each Loan contains a customary "due on sale" clause.
(24) At the Cut-off Date, the improvements on each Mortgaged
Property were covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the
area where such Mortgaged Property is located in an amount at least
equal to the lesser of (a) the maximum insurable value of the
improvements on such Mortgaged Property or (b) (i) in the case of a Loan
secured by a Mortgage creating a first lien on such Mortgaged Property,
the original principal balance of such Loan, or (ii) in the case of a
Loan which is subject to a prior loan or prior loans, the combined
principal balances of such Loan and the prior loan(s). If such Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the condominium unit. For all Mortgages
creating a first lien on the related Mortgaged Property, all such
individual insurance policies and all flood policies referred to in item
(25) below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(25) If a Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended, and if Seller has received
S-IIIC-4
any notice of non-payment of any premium or cancellation of any such
policy, Seller has required or is in the process of requiring the
reinstatement of such insurance.
(26) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation
of any Mortgaged Property.
(27) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material 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 of acceleration under
such Mortgage or related Mortgage Note; and the Seller has not waived
any default, breach, violation or event of acceleration.
(28) Each Mortgaged Property is improved by a mixed use building or
a one- to four-family residential dwelling including condominium units,
which, to the best of Seller's knowledge, does not include cooperatives
or mobile homes and does not constitute other than real property under
state law.
(29) Each Loan is being serviced by the Servicer.
(30) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related Loan Schedule. The consolidated principal amount does not exceed
the original principal amount of such Loan. No Mortgage Note permits or
obligates the Servicer to make future advances to the Mortgagor at the
option of the Mortgagor.
(31) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, except for items
which have been assessed, but are not yet due and payable. Except for
(a) payments in the nature of escrow payments, and (b) interest accruing
from the date of any Mortgage Note or date of disbursement of the
related Mortgage proceeds, whichever is later, to the day which precedes
by one month the Due Date of the first installment of principal and
interest, including without limitation, taxes and insurance payments,
the Servicer has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the
related Mortgage.
(32) Each Loan was underwritten in all material respects in
accordance with the Seller's underwriting guidelines as set forth in the
Prospectus Supplement.
S-IIIC-5
(33) An appraisal of each Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(34) No Loan is a graduated payment mortgage loan or a growing
equity mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
(35) The Loans were selected from among the outstanding fixed-rate
residential mortgage or mixed use loans in Seller's portfolio at the
Closing Date as to which the representations and warranties made as to
such Loans set forth in this Schedule IIIA can be made. Such selection
was not made in a manner that would adversely affect the interests of
Certificateholders or the Insurer.
(36) Each Loan has a payment date on or before its Due Date in the
month of the first Distribution Date.
(37) Approximately (a) ________% of the Group I Loans and (b)
________% of the Group II Loans are balloon loans as described in the
Prospectus Supplement.
(38) No Loan is subject to negative amortization or deferred
interest payments.
(39) No Mortgagor has requested relief under the Relief Act.
(40) None of the Loans are retail installment contracts for goods
or services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans" as
such terms are defined in 16 C.F.R. ss.433.1.
(41) No Mortgagor has or will have a claim or defense against
Seller or any assignor or assignee of Seller under any express or
implied warranty with respect to goods or services provided in
connection with any Loan.
(42) Each Loan is a "qualified mortgage" for purposes of Section
860G(a)(3) of the Code.
(43) The Loans, individually and in the aggregate, conform in all
material respects to the descriptions thereof in the Prospectus
Supplement.
(44) There exist no deficiencies with respect to escrow deposits
and payments, if such are required, for which customary arrangements for
repayment thereof
S-IIIC-6
have not been made, and no escrow deposits or payments of other charges
or payments due the Seller have been capitalized under any Mortgage or
related Mortgage Note.
(1) Each Group I Loan conforms to the following guidelines of FNMA
and FHLMC: at origination (i) each Loan in a first lien position had a
principal balance not exceeding (a) $________in the case of a one-family
dwelling, (b) $________in the case of a two-family dwelling, (c)
$________in the case of a three-family dwelling and (d) $________in the
case of a four-family dwelling, and (ii) each Second Lien Loan (a) had a
principal balance not exceeding $________and (b) had a principal balance
which, when added to the principal balance of the related senior loan at
such time, did not exceed $________in the aggregate.
S-IIIC-7
SCHEDULE IIID
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Loan Representations and Warranties of Equity One-New Hampshire
Equity One-New Hampshire ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIID to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans, Mortgages, Mortgage Notes and
Mortgaged Properties related to Seller set forth or referenced on Schedule I.
Capitalized terms used but not otherwise defined in this Schedule IIID shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement
(the "POOLING AND SERVICING AGREEMENT") relating to the above-referenced
Series, among Seller, the other Sellers and the Servicer identified therein,
Equity One ABS, Inc., as depositor, and ________, as trustee.
(1) The information set forth on Schedule I to the Pooling and
Servicing Agreement with respect to the Loans is true and correct in all
material respects as of the Closing Date.
(2) As of the Cut-off Date, (i) no Loan was contractually
delinquent for 60 or more days and (ii) not more than ________% (by
principal balance) of the Loans were between 30 and 59 days
contractually delinquent.
(3) No Loan had a Combined Loan-to-Value Ratio at origination in
excess of ________%. For purposes of determining the date of origination
on which each Loan's Combined Loan-to-Value Ratio is measured, no Loan
has been significantly modified within the meaning of Treasury
Regulation 1.860G-2(b) as of the Closing Date.
(4) Each Mortgage is a valid and enforceable first or second lien
on the referenced Mortgaged Property subject only to (a) the lien of non
delinquent current real property taxes and assessments, (b) covenants,
conditions and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Loan and (c) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage.
(5) Immediately prior to the assignment of the Loans to the
Depositor, the Seller had good title to, and was the sole owner of, each
such Loan free and clear of any pledge, lien (except in the case of a
Second Lien Loan, which shall be subject to prior liens approved by
Seller), encumbrance or security interest and had full right and
S-IIID-1
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to the
Pooling and Servicing Agreement.
(6) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(7) There is no valid right of rescission, offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those which
are insured against by the title insurance policy referred to in item
(12) below.
(9) To the best of the Seller's knowledge, each Mortgaged Property
is free of material damage and in good repair.
(10) Each Loan at origination complied in all material respects
with applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(11) As of the Closing Date, neither the Seller nor any prior
holder of any Mortgage has modified the Mortgage in any material respect
(except that a Loan may have been modified by a written instrument which
has been recorded or submitted for recordation, if necessary, to protect
the interests of the Certificateholders and the original or a copy of
which has been or shall be delivered to the Trustee); satisfied,
canceled or subordinated such Mortgage in whole or in part; released the
related Mortgaged Property in whole or in part from the lien of such
Mortgage; or executed any instrument of release, cancellation,
modification or satisfaction with respect thereto.
(12) For each Loan, a lender's policy of title insurance together
with a condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Loan, each
such policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in paragraph (4) above;
to the best of the Seller's knowledge, no claims have been made under
such mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has
S-IIID-2
done, by act or omission, anything which would impair the coverage of
such mortgage title insurance policy.
(13) To the best of the Seller's knowledge, all of the improvements
which were included for the purpose of determining the appraised value
of each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(14) To the best of the Seller's knowledge, no improvement located
on or being part of any Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of such Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
such Mortgaged Property is lawfully occupied under applicable law.
(15) Each Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(16) The proceeds of each Loan have been fully disbursed, there is
no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making, or closing or
recording such Loans were paid.
(17) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for
the realization against the related Mortgaged Property of the benefits
of the security, including, (a) in the case of a Mortgage designated as
a deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(18) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
S-IIID-3
(19) Each Mortgage Note and each Mortgage is in substantially one
of the forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(20) The origination, underwriting and collection practices used by
the Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(21) There is no pledged account or other security other than any
Escrow Account and real estate securing the Mortgagor's obligations.
(22) No Loan has a shared appreciation feature, or other contingent
interest feature.
(23) Each Loan contains a customary "due on sale" clause.
(24) At the Cut-off Date, the improvements on each Mortgaged
Property were covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the
area where such Mortgaged Property is located in an amount at least
equal to the lesser of (a) the maximum insurable value of the
improvements on such Mortgaged Property or (b) (i) in the case of a Loan
secured by a Mortgage creating a first lien on such Mortgaged Property,
the original principal balance of such Loan, or (ii) in the case of a
Loan which is subject to a prior loan or prior loans, the combined
principal balances of such Loan and the prior loan(s). If such Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the condominium unit. For all Mortgages
creating a first lien on the related Mortgaged Property, all such
individual insurance policies and all flood policies referred to in item
(25) below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(25) If a Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended, and if Seller has received
S-IIID-4
any notice of non-payment of any premium or cancellation of any such
policy, Seller has required or is in the process of requiring the
reinstatement of such insurance.
(26) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation
of any Mortgaged Property.
(27) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material 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 of acceleration under
such Mortgage or related Mortgage Note; and the Seller has not waived
any default, breach, violation or event of acceleration.
(28) Each Mortgaged Property is improved by a mixed use building or
a one- to four-family residential dwelling including condominium units,
which, to the best of Seller's knowledge, does not include cooperatives
or mobile homes and does not constitute other than real property under
state law.
(29) Each Loan is being serviced by the Servicer.
(30) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related Loan Schedule. The consolidated principal amount does not exceed
the original principal amount of such Loan. No Mortgage Note permits or
obligates the Servicer to make future advances to the Mortgagor at the
option of the Mortgagor.
(31) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, except for items
which have been assessed, but are not yet due and payable. Except for
(a) payments in the nature of escrow payments, and (b) interest accruing
from the date of any Mortgage Note or date of disbursement of the
related Mortgage proceeds, whichever is later, to the day which precedes
by one month the Due Date of the first installment of principal and
interest, including without limitation, taxes and insurance payments,
the Servicer has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the
related Mortgage.
(32) Each Loan was underwritten in all material respects in
accordance with the Seller's underwriting guidelines as set forth in the
Prospectus Supplement.
S-IIID-5
(33) An appraisal of each Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(34) No Loan is a graduated payment mortgage loan or a growing
equity mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
(35) The Loans were selected from among the outstanding fixed-rate
residential mortgage or mixed use loans in Seller's portfolio at the
Closing Date as to which the representations and warranties made as to
such Loans set forth in this Schedule IIIA can be made. Such selection
was not made in a manner that would adversely affect the interests of
Certificateholders or the Insurer.
(36) Each Loan has a payment date on or before its Due Date in the
month of the first Distribution Date.
(37) Approximately (a) ________% of the Group I Loans and (b)
________% of the Group II Loans are balloon loans as described in the
Prospectus Supplement.
(38) No Loan is subject to negative amortization or deferred
interest payments.
(39) No Mortgagor has requested relief under the Relief Act.
(40) None of the Loans are retail installment contracts for goods
or services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans" as
such terms are defined in 16 C.F.R. ss.433.1.
(41) No Mortgagor has or will have a claim or defense against
Seller or any assignor or assignee of Seller under any express or
implied warranty with respect to goods or services provided in
connection with any Loan.
(42) Each Loan is a "qualified mortgage" for purposes of Section
860G(a)(3) of the Code.
(43) The Loans, individually and in the aggregate, conform in all
material respects to the descriptions thereof in the Prospectus
Supplement.
(44) There exist no deficiencies with respect to escrow deposits
and payments, if such are required, for which customary arrangements for
repayment thereof
S-IIID-6
have not been made, and no escrow deposits or payments of other charges
or payments due the Seller have been capitalized under any Mortgage or
related Mortgage Note.
(1) Each Group I Loan conforms to the following guidelines of FNMA
and FHLMC: at origination (i) each Loan in a first lien position had a
principal balance not exceeding (a) $________in the case of a one-family
dwelling, (b) $________in the case of a two-family dwelling, (c)
$________in the case of a three-family dwelling and (d) $________in the
case of a four-family dwelling, and (ii) each Second Lien Loan (a) had a
principal balance not exceeding $________and (b) had a principal balance
which, when added to the principal balance of the related senior loan at
such time, did not exceed $________in the aggregate.
S-IIID-7
SCHEDULE IIIE
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Loan Representations and Warranties of Equity One-New York
Equity One-New York ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIIE to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans, Mortgages, Mortgage Notes and
Mortgaged Properties related to Seller set forth or referenced on Schedule I.
Capitalized terms used but not otherwise defined in this Schedule IIIE shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement
(the "POOLING AND SERVICING AGREEMENT") relating to the above-referenced
Series, among Seller, the other Sellers and the Servicer identified therein,
Equity One ABS, Inc., as depositor, and ________, as trustee.
(1) The information set forth on Schedule I to the Pooling and
Servicing Agreement with respect to the Loans is true and correct in all
material respects as of the Closing Date.
(2) As of the Cut-off Date, (i) no Loan was contractually
delinquent for 60 or more days and (ii) not more than ________% (by
principal balance) of the Loans were between 30 and 59 days
contractually delinquent.
(3) No Loan had a Combined Loan-to-Value Ratio at origination in
excess of ________%. For purposes of determining the date of origination
on which each Loan's Combined Loan-to-Value Ratio is measured, no Loan
has been significantly modified within the meaning of Treasury
Regulation 1.860G-2(b) as of the Closing Date.
(4) Each Mortgage is a valid and enforceable first or second lien
on the referenced Mortgaged Property subject only to (a) the lien of non
delinquent current real property taxes and assessments, (b) covenants,
conditions and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Loan and (c) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage.
(5) Immediately prior to the assignment of the Loans to the
Depositor, the Seller had good title to, and was the sole owner of, each
such Loan free and clear of any pledge, lien (except in the case of a
Second Lien Loan, which shall be subject to prior liens approved by
Seller), encumbrance or security interest and had full right and
S-IIIE-1
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to the
Pooling and Servicing Agreement.
(6) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(7) There is no valid right of rescission, offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those which
are insured against by the title insurance policy referred to in item
(12) below.
(9) To the best of the Seller's knowledge, each Mortgaged Property
is free of material damage and in good repair.
(10) Each Loan at origination complied in all material respects
with applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(11) As of the Closing Date, neither the Seller nor any prior
holder of any Mortgage has modified the Mortgage in any material respect
(except that a Loan may have been modified by a written instrument which
has been recorded or submitted for recordation, if necessary, to protect
the interests of the Certificateholders and the original or a copy of
which has been or shall be delivered to the Trustee); satisfied,
canceled or subordinated such Mortgage in whole or in part; released the
related Mortgaged Property in whole or in part from the lien of such
Mortgage; or executed any instrument of release, cancellation,
modification or satisfaction with respect thereto.
(12) For each Loan, a lender's policy of title insurance together
with a condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Loan, each
such policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in paragraph (4) above;
to the best of the Seller's knowledge, no claims have been made under
such mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has
S-IIIE-2
done, by act or omission, anything which would impair the coverage of
such mortgage title insurance policy.
(13) To the best of the Seller's knowledge, all of the improvements
which were included for the purpose of determining the appraised value
of each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(14) To the best of the Seller's knowledge, no improvement located
on or being part of any Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of such Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
such Mortgaged Property is lawfully occupied under applicable law.
(15) Each Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(16) The proceeds of each Loan have been fully disbursed, there is
no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making, or closing or
recording such Loans were paid.
(17) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for
the realization against the related Mortgaged Property of the benefits
of the security, including, (a) in the case of a Mortgage designated as
a deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(18) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
S-IIIE-3
(19) Each Mortgage Note and each Mortgage is in substantially one
of the forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(20) The origination, underwriting and collection practices used by
the Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(21) There is no pledged account or other security other than any
Escrow Account and real estate securing the Mortgagor's obligations.
(22) No Loan has a shared appreciation feature, or other contingent
interest feature.
(23) Each Loan contains a customary "due on sale" clause.
(24) At the Cut-off Date, the improvements on each Mortgaged
Property were covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the
area where such Mortgaged Property is located in an amount at least
equal to the lesser of (a) the maximum insurable value of the
improvements on such Mortgaged Property or (b) (i) in the case of a Loan
secured by a Mortgage creating a first lien on such Mortgaged Property,
the original principal balance of such Loan, or (ii) in the case of a
Loan which is subject to a prior loan or prior loans, the combined
principal balances of such Loan and the prior loan(s). If such Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the condominium unit. For all Mortgages
creating a first lien on the related Mortgaged Property, all such
individual insurance policies and all flood policies referred to in item
(25) below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(25) If a Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended, and if Seller has received
S-IIIE-4
any notice of non-payment of any premium or cancellation of any such
policy, Seller has required or is in the process of requiring the
reinstatement of such insurance.
(26) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation
of any Mortgaged Property.
(27) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material 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 of acceleration under
such Mortgage or related Mortgage Note; and the Seller has not waived
any default, breach, violation or event of acceleration.
(28) Each Mortgaged Property is improved by a mixed use building or
a one- to four-family residential dwelling including condominium units,
which, to the best of Seller's knowledge, does not include cooperatives
or mobile homes and does not constitute other than real property under
state law.
(29) Each Loan is being serviced by the Servicer.
(30) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related Loan Schedule. The consolidated principal amount does not exceed
the original principal amount of such Loan. No Mortgage Note permits or
obligates the Servicer to make future advances to the Mortgagor at the
option of the Mortgagor.
(31) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, except for items
which have been assessed, but are not yet due and payable. Except for
(a) payments in the nature of escrow payments, and (b) interest accruing
from the date of any Mortgage Note or date of disbursement of the
related Mortgage proceeds, whichever is later, to the day which precedes
by one month the Due Date of the first installment of principal and
interest, including without limitation, taxes and insurance payments,
the Servicer has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the
related Mortgage.
(32) Each Loan was underwritten in all material respects in
accordance with the Seller's underwriting guidelines as set forth in the
Prospectus Supplement.
S-IIIE-5
(33) An appraisal of each Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(34) No Loan is a graduated payment mortgage loan or a growing
equity mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
(35) The Loans were selected from among the outstanding fixed-rate
residential mortgage or mixed use loans in Seller's portfolio at the
Closing Date as to which the representations and warranties made as to
such Loans set forth in this Schedule IIIA can be made. Such selection
was not made in a manner that would adversely affect the interests of
Certificateholders or the Insurer.
(36) Each Loan has a payment date on or before its Due Date in the
month of the first Distribution Date.
(37) Approximately ________% of the Group I Loans and (b) ________%
of the Group II Loans are balloon loans as described in the Prospectus
Supplement.
(38) No Loan is subject to negative amortization or deferred
interest payments.
(39) No Mortgagor has requested relief under the Relief Act.
(40) None of the Loans are retail installment contracts for goods
or services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans" as
such terms are defined in 16 C.F.R. ss.433.1.
(41) No Mortgagor has or will have a claim or defense against
Seller or any assignor or assignee of Seller under any express or
implied warranty with respect to goods or services provided in
connection with any Loan.
(42) Each Loan is a "qualified mortgage" for purposes of Section
860G(a)(3) of the Code.
(43) The Loans, individually and in the aggregate, conform in all
material respects to the descriptions thereof in the Prospectus
Supplement.
(44) There exist no deficiencies with respect to escrow deposits
and payments, if such are required, for which customary arrangements for
repayment thereof
S-IIIE-6
have not been made, and no escrow deposits or payments of other charges
or payments due the Seller have been capitalized under any Mortgage or
related Mortgage Note.
(1) Each Group I Loan conforms to the following guidelines of FNMA
and FHLMC: at origination (i) each Loan in a first lien position had a
principal balance not exceeding (a) $________in the case of a one-family
dwelling, (b) $________in the case of a two-family dwelling, (c)
$________in the case of a three-family dwelling and (d) $________in the
case of a four-family dwelling, and (ii) each Second Lien Loan (a) had a
principal balance not exceeding $________and (b) had a principal balance
which, when added to the principal balance of the related senior loan at
such time, did not exceed $________in the aggregate.
S-IIIE-7
SCHEDULE IIIF
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Loan Representations and Warranties of Equity One-North Carolina
Equity One-North Carolina ("SELLER") hereby makes the representations
and warranties set forth in this Schedule IIIF to the Depositor, the Insurer
and the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans, Mortgages, Mortgage Notes and
Mortgaged Properties related to Seller set forth or referenced on Schedule I.
Capitalized terms used but not otherwise defined in this Schedule IIIF shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement
(the "POOLING AND SERVICING AGREEMENT") relating to the above-referenced
Series, among Seller, the other Sellers and the Servicer identified therein,
Equity One ABS, Inc., as depositor, and ________, as trustee.
(1) The information set forth on Schedule I to the Pooling and
Servicing Agreement with respect to the Loans is true and correct in all
material respects as of the Closing Date.
(2) As of the Cut-off Date, (i) no Loan was contractually
delinquent for 60 or more days and (ii) not more than ________% (by
principal balance) of the Loans were between 30 and 59 days
contractually delinquent.
(3) No Loan had a Combined Loan-to-Value Ratio at origination in
excess of ________%. For purposes of determining the date of origination
on which each Loan's Combined Loan-to-Value Ratio is measured, no Loan
has been significantly modified within the meaning of Treasury
Regulation 1.860G-2(b) as of the Closing Date.
(4) Each Mortgage is a valid and enforceable first or second lien
on the referenced Mortgaged Property subject only to (a) the lien of non
delinquent current real property taxes and assessments, (b) covenants,
conditions and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Loan and (c) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage.
(5) Immediately prior to the assignment of the Loans to the
Depositor, the Seller had good title to, and was the sole owner of, each
such Loan free and clear of any pledge, lien (except in the case of a
Second Lien Loan, which shall be subject to prior liens approved by
Seller), encumbrance or security interest and had full right and
S-IIIF-1
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to the
Pooling and Servicing Agreement.
(6) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(7) There is no valid right of rescission, offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those which
are insured against by the title insurance policy referred to in item
(12) below.
(9) To the best of the Seller's knowledge, each Mortgaged Property
is free of material damage and in good repair.
(10) Each Loan at origination complied in all material respects
with applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(11) As of the Closing Date, neither the Seller nor any prior
holder of any Mortgage has modified the Mortgage in any material respect
(except that a Loan may have been modified by a written instrument which
has been recorded or submitted for recordation, if necessary, to protect
the interests of the Certificateholders and the original or a copy of
which has been or shall be delivered to the Trustee); satisfied,
canceled or subordinated such Mortgage in whole or in part; released the
related Mortgaged Property in whole or in part from the lien of such
Mortgage; or executed any instrument of release, cancellation,
modification or satisfaction with respect thereto.
(12) For each Loan, a lender's policy of title insurance together
with a condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Loan, each
such policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in paragraph (4) above;
to the best of the Seller's knowledge, no claims have been made under
such mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has
S-IIIF-2
done, by act or omission, anything which would impair the coverage of
such mortgage title insurance policy.
(13) To the best of the Seller's knowledge, all of the improvements
which were included for the purpose of determining the appraised value
of each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(14) To the best of the Seller's knowledge, no improvement located
on or being part of any Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of such Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
such Mortgaged Property is lawfully occupied under applicable law.
(15) Each Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(16) The proceeds of each Loan have been fully disbursed, there is
no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making, or closing or
recording such Loans were paid.
(17) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for
the realization against the related Mortgaged Property of the benefits
of the security, including, (a) in the case of a Mortgage designated as
a deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(18) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
S-IIIF-3
(19) Each Mortgage Note and each Mortgage is in substantially one
of the forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(20) The origination, underwriting and collection practices used by
the Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(21) There is no pledged account or other security other than any
Escrow Account and real estate securing the Mortgagor's obligations.
(22) No Loan has a shared appreciation feature, or other contingent
interest feature.
(23) Each Loan contains a customary "due on sale" clause.
(24) At the Cut-off Date, the improvements on each Mortgaged
Property were covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the
area where such Mortgaged Property is located in an amount at least
equal to the lesser of (a) the maximum insurable value of the
improvements on such Mortgaged Property or (b) (i) in the case of a Loan
secured by a Mortgage creating a first lien on such Mortgaged Property,
the original principal balance of such Loan, or (ii) in the case of a
Loan which is subject to a prior loan or prior loans, the combined
principal balances of such Loan and the prior loan(s). If such Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the condominium unit. For all Mortgages
creating a first lien on the related Mortgaged Property, all such
individual insurance policies and all flood policies referred to in item
(25) below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(25) If a Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended, and if Seller has received
S-IIIF-4
any notice of non-payment of any premium or cancellation of any such
policy, Seller has required or is in the process of requiring the
reinstatement of such insurance.
(26) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation
of any Mortgaged Property.
(27) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material 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 of acceleration under
such Mortgage or related Mortgage Note; and the Seller has not waived
any default, breach, violation or event of acceleration.
(28) Each Mortgaged Property is improved by a mixed use building or
a one- to four-family residential dwelling including condominium units,
which, to the best of Seller's knowledge, does not include cooperatives
or mobile homes and does not constitute other than real property under
state law.
(29) Each Loan is being serviced by the Servicer.
(30) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related Loan Schedule. The consolidated principal amount does not exceed
the original principal amount of such Loan. No Mortgage Note permits or
obligates the Servicer to make future advances to the Mortgagor at the
option of the Mortgagor.
(31) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, except for items
which have been assessed, but are not yet due and payable. Except for
(a) payments in the nature of escrow payments, and (b) interest accruing
from the date of any Mortgage Note or date of disbursement of the
related Mortgage proceeds, whichever is later, to the day which precedes
by one month the Due Date of the first installment of principal and
interest, including without limitation, taxes and insurance payments,
the Servicer has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the
related Mortgage.
(32) Each Loan was underwritten in all material respects in
accordance with the Seller's underwriting guidelines as set forth in the
Prospectus Supplement.
S-IIIF-5
(33) An appraisal of each Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(34) No Loan is a graduated payment mortgage loan or a growing
equity mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
(35) The Loans were selected from among the outstanding fixed-rate
residential mortgage or mixed use loans in Seller's portfolio at the
Closing Date as to which the representations and warranties made as to
such Loans set forth in this Schedule IIIA can be made. Such selection
was not made in a manner that would adversely affect the interests of
Certificateholders or the Insurer.
(36) Each Loan has a payment date on or before its Due Date in the
month of the first Distribution Date.
(37) Approximately (a) ________% of the Group I Loans and (b)
________% of the Group II Loans are balloon loans as described in the
Prospectus Supplement.
(38) No Loan is subject to negative amortization or deferred
interest payments.
(39) No Mortgagor has requested relief under the Relief Act.
(40) None of the Loans are retail installment contracts for goods
or services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans" as
such terms are defined in 16 C.F.R. ss.433.1.
(41) No Mortgagor has or will have a claim or defense against
Seller or any assignor or assignee of Seller under any express or
implied warranty with respect to goods or services provided in
connection with any Loan.
(42) Each Loan is a "qualified mortgage" for purposes of Section
860G(a)(3) of the Code.
(43) The Loans, individually and in the aggregate, conform in all
material respects to the descriptions thereof in the Prospectus
Supplement.
(44) There exist no deficiencies with respect to escrow deposits
and payments, if such are required, for which customary arrangements for
repayment thereof
S-IIIF-6
have not been made, and no escrow deposits or payments of other charges
or payments due the Seller have been capitalized under any Mortgage or
related Mortgage Note.
(1) Each Group I Loan conforms to the following guidelines of FNMA
and FHLMC: at origination (i) each Loan in a first lien position had a
principal balance not exceeding (a) $________in the case of a one-family
dwelling, (b) $________in the case of a two-family dwelling, (c)
$________in the case of a three-family dwelling and (d) $________in the
case of a four-family dwelling, and (ii) each Second Lien Loan (a) had a
principal balance not exceeding $________and (b) had a principal balance
which, when added to the principal balance of the related senior loan at
such time, did not exceed $________in the aggregate.
S-IIIF-7
SCHEDULE IIIG
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Loan Representations and Warranties of Equity One-Pennsylvania
Equity One-Pennsylvania ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIIG to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans, Mortgages, Mortgage Notes and
Mortgaged Properties related to Seller set forth or referenced on Schedule I.
Capitalized terms used but not otherwise defined in this Schedule IIIG shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement
(the "POOLING AND SERVICING AGREEMENT") relating to the above-referenced
Series, among Seller, the other Sellers and the Servicer identified therein,
Equity One ABS, Inc., as depositor, and ________, as trustee.
(1) The information set forth on Schedule I to the Pooling and
Servicing Agreement with respect to the Loans is true and correct in all
material respects as of the Closing Date.
(2) As of the Cut-off Date, (i) no Loan was contractually
delinquent for 60 or more days and (ii) not more than ________% (by
principal balance) of the Loans were between 30 and 59 days
contractually delinquent.
(3) No Loan had a Combined Loan-to-Value Ratio at origination in
excess of ________%. For purposes of determining the date of origination
on which each Loan's Combined Loan-to-Value Ratio is measured, no Loan
has been significantly modified within the meaning of Treasury
Regulation 1.860G-2(b) as of the Closing Date.
(4) Each Mortgage is a valid and enforceable first or second lien
on the referenced Mortgaged Property subject only to (a) the lien of non
delinquent current real property taxes and assessments, (b) covenants,
conditions and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Loan and (c) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage.
(5) Immediately prior to the assignment of the Loans to the
Depositor, the Seller had good title to, and was the sole owner of, each
such Loan free and clear of any pledge, lien (except in the case of a
Second Lien Loan, which shall be subject to prior liens approved by
Seller), encumbrance or security interest and had full right and
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authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to the
Pooling and Servicing Agreement.
(6) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(7) There is no valid right of rescission, offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those which
are insured against by the title insurance policy referred to in item
(12) below.
(9) To the best of the Seller's knowledge, each Mortgaged Property
is free of material damage and in good repair.
(10) Each Loan at origination complied in all material respects
with applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(11) As of the Closing Date, neither the Seller nor any prior
holder of any Mortgage has modified the Mortgage in any material respect
(except that a Loan may have been modified by a written instrument which
has been recorded or submitted for recordation, if necessary, to protect
the interests of the Certificateholders and the original or a copy of
which has been or shall be delivered to the Trustee); satisfied,
canceled or subordinated such Mortgage in whole or in part; released the
related Mortgaged Property in whole or in part from the lien of such
Mortgage; or executed any instrument of release, cancellation,
modification or satisfaction with respect thereto.
(12) For each Loan, a lender's policy of title insurance together
with a condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Loan, each
such policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in paragraph (4) above;
to the best of the Seller's knowledge, no claims have been made under
such mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has
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done, by act or omission, anything which would impair the coverage of
such mortgage title insurance policy.
(13) To the best of the Seller's knowledge, all of the improvements
which were included for the purpose of determining the appraised value
of each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(14) To the best of the Seller's knowledge, no improvement located
on or being part of any Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of such Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
such Mortgaged Property is lawfully occupied under applicable law.
(15) Each Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(16) The proceeds of each Loan have been fully disbursed, there is
no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making, or closing or
recording such Loans were paid.
(17) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for
the realization against the related Mortgaged Property of the benefits
of the security, including, (a) in the case of a Mortgage designated as
a deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(18) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
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(19) Each Mortgage Note and each Mortgage is in substantially one
of the forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(20) The origination, underwriting and collection practices used by
the Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(21) There is no pledged account or other security other than any
Escrow Account and real estate securing the Mortgagor's obligations.
(22) No Loan has a shared appreciation feature, or other contingent
interest feature.
(23) Each Loan contains a customary "due on sale" clause.
(24) At the Cut-off Date, the improvements on each Mortgaged
Property were covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the
area where such Mortgaged Property is located in an amount at least
equal to the lesser of (a) the maximum insurable value of the
improvements on such Mortgaged Property or (b) (i) in the case of a Loan
secured by a Mortgage creating a first lien on such Mortgaged Property,
the original principal balance of such Loan, or (ii) in the case of a
Loan which is subject to a prior loan or prior loans, the combined
principal balances of such Loan and the prior loan(s). If such Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the condominium unit. For all Mortgages
creating a first lien on the related Mortgaged Property, all such
individual insurance policies and all flood policies referred to in item
(25) below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(25) If a Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended, and if Seller has received
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any notice of non-payment of any premium or cancellation of any such
policy, Seller has required or is in the process of requiring the
reinstatement of such insurance.
(26) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation
of any Mortgaged Property.
(27) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material 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 of acceleration under
such Mortgage or related Mortgage Note; and the Seller has not waived
any default, breach, violation or event of acceleration.
(28) Each Mortgaged Property is improved by a mixed use building or
a one- to four-family residential dwelling including condominium units,
which, to the best of Seller's knowledge, does not include cooperatives
or mobile homes and does not constitute other than real property under
state law.
(29) Each Loan is being serviced by the Servicer.
(30) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related Loan Schedule. The consolidated principal amount does not exceed
the original principal amount of such Loan. No Mortgage Note permits or
obligates the Servicer to make future advances to the Mortgagor at the
option of the Mortgagor.
(31) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, except for items
which have been assessed, but are not yet due and payable. Except for
(a) payments in the nature of escrow payments, and (b) interest accruing
from the date of any Mortgage Note or date of disbursement of the
related Mortgage proceeds, whichever is later, to the day which precedes
by one month the Due Date of the first installment of principal and
interest, including without limitation, taxes and insurance payments,
the Servicer has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the
related Mortgage.
(32) Each Loan was underwritten in all material respects in
accordance with the Seller's underwriting guidelines as set forth in the
Prospectus Supplement.
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(33) An appraisal of each Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(34) No Loan is a graduated payment mortgage loan or a growing
equity mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
(35) The Loans were selected from among the outstanding fixed-rate
residential mortgage or mixed use loans in Seller's portfolio at the
Closing Date as to which the representations and warranties made as to
such Loans set forth in this Schedule IIIA can be made. Such selection
was not made in a manner that would adversely affect the interests of
Certificateholders or the Insurer.
(36) Each Loan has a payment date on or before its Due Date in the
month of the first Distribution Date.
(37) Approximately ________% of the Group I Loans and ________% of
the Group II Loans are balloon loans as described in the Prospectus
Supplement.
(38) No Loan is subject to negative amortization or deferred
interest payments.
(39) No Mortgagor has requested relief under the Relief Act.
(40) None of the Loans are retail installment contracts for goods
or services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans" as
such terms are defined in 16 C.F.R. ss.433.1.
(41) No Mortgagor has or will have a claim or defense against
Seller or any assignor or assignee of Seller under any express or
implied warranty with respect to goods or services provided in
connection with any Loan.
(42) Each Loan is a "qualified mortgage" for purposes of Section
860G(a)(3) of the Code.
(43) The Loans, individually and in the aggregate, conform in all
material respects to the descriptions thereof in the Prospectus
Supplement.
(44) There exist no deficiencies with respect to escrow deposits
and payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or payments
of other charges or payments due the Seller have been capitalized under
any Mortgage or related Mortgage Note.
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(1) Each Group I Loan conforms to the following guidelines of FNMA
and FHLMC: at origination (i) each Loan in a first lien position had a
principal balance not exceeding (a) $________in the case of a one-family
dwelling, (b) $________in the case of a two-family dwelling, (c)
$________in the case of a three-family dwelling and (d) $________in the
case of a four-family dwelling, and (ii) each Second Lien Loan (a) had a
principal balance not exceeding $________and (b) had a principal balance
which, when added to the principal balance of the related senior loan at
such time, did not exceed $________in the aggregate.
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SCHEDULE IIIH
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
Loan Representations and Warranties of Equity One-West Virginia
Equity One-West Virginia ("SELLER") hereby makes the representations and
warranties set forth in this Schedule IIIH to the Depositor, the Insurer and
the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans, Mortgages, Mortgage Notes and
Mortgaged Properties related to Seller set forth or referenced on Schedule I.
Capitalized terms used but not otherwise defined in this Schedule IIIH shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement
(the "POOLING AND SERVICING AGREEMENT") relating to the above-referenced
Series, among Seller, the other Sellers and the Servicer identified therein,
Equity One ABS, Inc., as depositor, and ________, as trustee.
(1) The information set forth on Schedule I to the Pooling and
Servicing Agreement with respect to the Loans is true and correct in all
material respects as of the Closing Date.
(2) As of the Cut-off Date, (i) no Loan was contractually
delinquent for 60 or more days and (ii) not more than ________% (by
principal balance) of the Loans were between 30 and 59 days
contractually delinquent.
(3) No Loan had a Combined Loan-to-Value Ratio at origination in
excess of ________%. For purposes of determining the date of origination
on which each Loan's Combined Loan-to-Value Ratio is measured, no Loan
has been significantly modified within the meaning of Treasury
Regulation 1.860G-2(b) as of the Closing Date.
(4) Each Mortgage is a valid and enforceable first or second lien
on the referenced Mortgaged Property subject only to (a) the lien of non
delinquent current real property taxes and assessments, (b) covenants,
conditions and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Loan and (c) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage.
(5) Immediately prior to the assignment of the Loans to the
Depositor, the Seller had good title to, and was the sole owner of, each
such Loan free and clear of any pledge, lien (except in the case of a
Second Lien Loan, which shall be subject to prior liens approved by
Seller), encumbrance or security interest and had full right and
S-IIIH-1
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to the
Pooling and Servicing Agreement.
(6) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(7) There is no valid right of rescission, offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.
(8) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those which
are insured against by the title insurance policy referred to in item
(12) below.
(9) To the best of the Seller's knowledge, each Mortgaged Property
is free of material damage and in good repair.
(10) Each Loan at origination complied in all material respects
with applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(11) As of the Closing Date, neither the Seller nor any prior
holder of any Mortgage has modified the Mortgage in any material respect
(except that a Loan may have been modified by a written instrument which
has been recorded or submitted for recordation, if necessary, to protect
the interests of the Certificateholders and the original or a copy of
which has been or shall be delivered to the Trustee); satisfied,
canceled or subordinated such Mortgage in whole or in part; released the
related Mortgaged Property in whole or in part from the lien of such
Mortgage; or executed any instrument of release, cancellation,
modification or satisfaction with respect thereto.
(12) For each Loan, a lender's policy of title insurance together
with a condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Loan, each
such policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in paragraph (4) above;
to the best of the Seller's knowledge, no claims have been made under
such mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has
S-IIIH-2
done, by act or omission, anything which would impair the coverage of
such mortgage title insurance policy.
(13) To the best of the Seller's knowledge, all of the improvements
which were included for the purpose of determining the appraised value
of each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(14) To the best of the Seller's knowledge, no improvement located
on or being part of any Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of the Seller's
knowledge, all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of such Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless the lack thereof would not have a
material adverse effect on the value of such Mortgaged Property, and
such Mortgaged Property is lawfully occupied under applicable law.
(15) Each Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(16) The proceeds of each Loan have been fully disbursed, there is
no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in making, or closing or
recording such Loans were paid.
(17) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for
the realization against the related Mortgaged Property of the benefits
of the security, including, (a) in the case of a Mortgage designated as
a deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(18) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
S-IIIH-3
(19) Each Mortgage Note and each Mortgage is in substantially one
of the forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(20) The origination, underwriting and collection practices used by
the Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(21) There is no pledged account or other security
other than any Escrow Account and real estate securing the Mortgagor's
obligations.
(22) No Loan has a shared appreciation feature, or other contingent
interest feature.
(23) Each Loan contains a customary "due on sale" clause.
(24) At the Cut-off Date, the improvements on each Mortgaged
Property were covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the
area where such Mortgaged Property is located in an amount at least
equal to the lesser of (a) the maximum insurable value of the
improvements on such Mortgaged Property or (b) (i) in the case of a Loan
secured by a Mortgage creating a first lien on such Mortgaged Property,
the original principal balance of such Loan, or (ii) in the case of a
Loan which is subject to a prior loan or prior loans, the combined
principal balances of such Loan and the prior loan(s). If such Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the condominium unit. For all Mortgages
creating a first lien on the related Mortgaged Property, all such
individual insurance policies and all flood policies referred to in item
(25) below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(25) If a Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended, and if Seller has received
S-IIIH-4
any notice of non-payment of any premium or cancellation of any such
policy, Seller has required or is in the process of requiring the
reinstatement of such insurance.
(26) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation
of any Mortgaged Property.
(27) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material 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 of acceleration under
such Mortgage or related Mortgage Note; and the Seller has not waived
any default, breach, violation or event of acceleration.
(28) Each Mortgaged Property is improved by a mixed use building or
a one- to four-family residential dwelling including condominium units,
which, to the best of Seller's knowledge, does not include cooperatives
or mobile homes and does not constitute other than real property under
state law.
(29) Each Loan is being serviced by the Servicer.
(30) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related Loan Schedule. The consolidated principal amount does not exceed
the original principal amount of such Loan. No Mortgage Note permits or
obligates the Servicer to make future advances to the Mortgagor at the
option of the Mortgagor.
(31) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, except for items
which have been assessed, but are not yet due and payable. Except for
(a) payments in the nature of escrow payments, and (b) interest accruing
from the date of any Mortgage Note or date of disbursement of the
related Mortgage proceeds, whichever is later, to the day which precedes
by one month the Due Date of the first installment of principal and
interest, including without limitation, taxes and insurance payments,
the Servicer has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the
related Mortgage.
(32) Each Loan was underwritten in all material respects in
accordance with the Seller's underwriting guidelines as set forth in the
Prospectus Supplement.
S-IIIH-5
(33) An appraisal of each Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(34) No Loan is a graduated payment mortgage loan or a growing
equity mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
(35) The Loans were selected from among the outstanding fixed-rate
residential mortgage or mixed use loans in Seller's portfolio at the
Closing Date as to which the representations and warranties made as to
such Loans set forth in this Schedule IIIA can be made. Such selection
was not made in a manner that would adversely affect the interests of
Certificateholders or the Insurer.
(36) Each Loan has a payment date on or before its Due Date in the
month of the first Distribution Date.
(37) Approximately ________% of the Group I Loans and (b) ________%
of the Group II Loans are balloon loans as described in the Prospectus
Supplement.
(38) No Loan is subject to negative amortization or deferred
interest payments.
(39) No Mortgagor has requested relief under the Relief Act.
(40) None of the Loans are retail installment contracts for goods
or services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans" as
such terms are defined in 16 C.F.R. ss.433.1.
(41) No Mortgagor has or will have a claim or defense
against Seller or any assignor or assignee of Seller under any express
or implied warranty with respect to goods or services provided in
connection with any Loan.
(42) Each Loan is a "qualified mortgage" for purposes of Section
860G(a)(3) of the Code.
(43) The Loans, individually and in the aggregate, conform in all
material respects to the descriptions thereof in the Prospectus
Supplement.
(44) There exist no deficiencies with respect to escrow deposits
and payments, if such are required, for which customary arrangements for
repayment thereof
S-IIIH-6
have not been made, and no escrow deposits or payments of other charges
or payments due the Seller have been capitalized under any Mortgage or
related Mortgage Note.
(1) Each Group I Loan conforms to the following guidelines of FNMA
and FHLMC: at origination (i) each Loan in a first lien position had a
principal balance not exceeding (a) $________in the case of a one-family
dwelling, (b) $________in the case of a two-family dwelling, (c)
$________in the case of a three-family dwelling and (d) $________in the
case of a four-family dwelling, and (ii) each Second Lien Loan (a) had a
principal balance not exceeding $________and (b) had a principal balance
which, when added to the principal balance of the related senior loan at
such time, did not exceed $________in the aggregate.
S-IIIH-7
SCHEDULE IV
LIST OF FINANCING STATEMENTS:
PERFECTION OF GRANT OF SECURITY INTEREST
BY SELLERS TO DEPOSITOR
================================================================================
SELLER LOCATION
================================================================================
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
S-IV-1
SCHEDULE V
LIST OF FINANCING STATEMENTS:
PERFECTION OF GRANT OF SECURITY INTEREST
BY DEPOSITOR TO TRUSTEE
================================================================================
DEPOSITOR LOCATION
================================================================================
--------------------------------------------------------------------------------
S-V-1
EXHIBIT A
Form Of Class A 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 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").
Certificate No. :
Cut-off Date: : _______
First Distribution Date: : _______
Initial Certificate Balance
of this Certificate
("DENOMINATION") : $
Initial Class Certificate Balance
of all Certificates of
this Class: : $
CUSIP :
Equity One ABS, Inc.
Mortgage Pass-Through Certificates, Series _____
Class A- [ ]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed rate mortgage loans divided into
two groups, Group I and Group II (collectively, the "LOANS"). Mortgage
loans in both groups are secured by first or second liens on one- to
four-family residential properties and Group II also includes mortgage
loans secured by first liens on mixed commercial/residential use
properties. Subject to certain cross-
A-1
collateralization provisions contained in the Agreement (as defined
below), the Class A - [ ] Certificates represent an interest in the
mortgage loans in Group [ ].
Equity One ABS, Inc., as Depositor
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 Sellers, the Servicer or the Trustee referred to below or any
of their respective affiliates. Neither this Certificate nor the Group [ ]
Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that ________ is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination
of this Certificate by the aggregate Initial Certificate Balances of all
Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of
the Loans deposited by Equity One ABS, Inc. (the "DEPOSITOR"). The Trust Fund
was created pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "AGREEMENT") among the Depositor, Equity
One, Inc. (DE), _______, _______, _______, _______, _______, _______, and
_______ (in such capacity, collectively, the "SELLERS") and Equity One, Inc.
(DE) as servicer (in such capacity, the "SERVICER"), and ________, 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 , 19 , as Trustee
------------ ----- --------
Countersigned:
By:
----------------------------
By:
-----------------------------
Authorized Signatory of
, as Trustee
--------
A-2
EXHIBIT B
Form Of Class R Certificate
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE REPRESENTS THE "TAX MATTERS PERSON RESIDUAL INTEREST" ISSUED
UNDER THE AGREEMENT REFERRED TO BELOW AND MAY NOT BE TRANSFERRED TO ANY PERSON
EXCEPT IN CONNECTION WITH THE ASSUMPTION BY THE TRANSFEREE OF THE DUTIES OF THE
SERVICER UNDER SUCH AGREEMENT.]
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION
4975 OF THE CODE, 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 OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
B-1
Certificate No. :
Cut-off Date : _______
Equity One ABS, Inc.
Mortgage Pass-Through Certificates, Series _____
evidencing the distributions allocable to the Class R Certificates with
respect to a Trust Fund consisting primarily of a pool of fixed rate
mortgage loans divided into two groups, Group I and Group II
(collectively, the "Loans"). Mortgage loans in both groups are secured
by first or second liens on one- to four-family residential properties
and Group II also includes mortgage loans secured by first liens on
mixed commercial/residential use properties.
Equity One ABS, Inc., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Sellers, the Servicer or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that _________ is the registered owner of the Percentage
Interest (set forth on the face hereof) in certain monthly distributions with
respect to a Trust Fund consisting of the Loans deposited by Equity One ABS,
Inc. (the "DEPOSITOR"). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"AGREEMENT") among the Depositor, Equity One, Inc. (DE), _______, _______,
_______, _______, _______, _______, and _______ (in such capacity,
collectively, the "SELLERS") and Equity One, Inc. (DE) as servicer (in such
capacity, the "SERVICER"), and ________, 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 Corporate Trust Office or the office or agency maintained
by the Trustee in New York, New York.
Any proposed transfer of a Class R Certificate shall be subject to the
restrictions on transfer described in Section 5.02 of the Agreement.
No transfer of a Class R Certificate 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, nor a person
acting on behalf of any such plan, which representation letter shall not be
an expense of the Trustee or the Servicer, or (ii) in the case of any such
Class R Certificate presented for registration in the name
B-2
of an employee benefit plan subject to ERISA, or Section 4975 of the Code
(or comparable provisions of any subsequent enactment), or a trustee of
any such plan or any other person acting on behalf of any such plan, an
Opinion of Counsel satisfactory to the Trustee and the Servicer to the effect
that the purchase or holding of such Class R 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
undertaken in the Agreement, which Opinion of Counsel shall not be an expense
of the Trustee or the Servicer. Notwithstanding anything else to the contrary
herein, any purported transfer of a Class R Certificate to or on behalf of an
employee benefit plan subject to ERISA or to the Code without the opinion of
counsel satisfactory to the Trustee as described above shall be void and of
no effect.
Each Holder of this Class R Certificate will be deemed to have agreed to
be bound by the restrictions of the Agreement, including but not limited to
the restrictions that (i) each person holding or acquiring any Ownership
Interest in this Class R Certificate must be a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be transferred without
delivery to the Trustee of (a) a transfer affidavit of the proposed
transferee and (b) a transfer certificate of the transferor, each of such
documents to be in the form described in the Agreement, (iii) each person
holding or acquiring any Ownership Interest in this Class R Certificate must
agree to require a transfer affidavit and to deliver a transfer certificate
to the Trustee as required pursuant to the Agreement, (iv) each person
holding or acquiring an Ownership Interest in this Class R Certificate must
agree not to transfer an Ownership Interest in this Class R Certificate if it
has actual knowledge that the proposed transferee is not a Permitted
Transferee and (v) any attempted or purported transfer of any Ownership
Interest in this Class R Certificate in violation of such restrictions will
be absolutely null and void and will 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.
* * *
B-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: , 19
-------- --
--------,
as Trustee
By:
--------------------------
Countersigned:
By:
-------------------------
Authorized Signatory of
--------,
as Trustee
B-4
EXHIBIT C
Form of Reverse of Certificates
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Equity One ABS, Inc. 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 Business Day immediately
preceding 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 Corporate Trust Office
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 Servicer 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
C-1
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 Corporate Trust Office or the office or agency maintained
by the Trustee in New York, New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar
duly executed by the Holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Sellers 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 Pool Principal Balance is less
than ________% of the aggregate Cut-off Date Principal Balance of the Loans,
the Servicer will have the option to repurchase, in whole, from the Trust
Fund all remaining Loans and all property acquired in respect of the Loans at
a purchase price determined as provided in the Agreement. In the event that
no such optional termination occurs, the obligations and responsibilities
created by the Agreement will terminate upon the later of the maturity or
other liquidation (or any advance with respect thereto) of the last Loan
remaining in the Trust Fund or the disposition of all property in respect
thereof and the distribution to Certificateholders of all amounts required to
be distributed pursuant to the Agreement. In no event, however, will the
trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of
the Agreement of a certain person named in the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-2
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.
C-3
EXHIBIT D
Form Of Initial Certification Of Trustee
[date]
[Depositor]
[Servicer]
[Sellers]
---------------------
---------------------
Re: The Pooling & Servicing Agreement dated as of ________ among
Equity One, Inc. (DE), ________, ________, ________, ________,
________ ________, as Sellers, Equity One, Inc. (DE) as
Servicer, and Equity One ABS, Inc. as Depositor and ________
as Trustee, Mortgage Pass-Through Certificates, Series
_________
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 Loan listed in the Loan
Schedule (other than any Loan paid in full or listed on the attached
schedule) it has received the original Mortgage Note and confirms that the
name on the Mortgage Note matches that on the Loan Schedule, except as set
forth on the Exception Report attached hereto.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
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 Loans
identified on the Loan Schedule, or (ii) the collectability, insurability,
effectiveness or suitability of any such Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
--------,
as Trustee
By:
----------------------------------
Name:
Title:
D-1
EXHIBIT E
Form Of Final Certification Of Trustee
[date]
[Depositor]
[Servicer]
[Seller]
---------------------
---------------------
Re: The Pooling & Servicing Agreement dated as of ________ among
Equity One, Inc. (DE), ________, ________, ________, ________,
________ ________, as Sellers, Equity One, Inc. (DE) as
Servicer, and Equity One ABS, Inc. as Depositor and ________
as Trustee, Mortgage Pass-Through Certificates, Series
_________
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 Loan listed in the Loan Schedule
(other than any Loan paid in full or listed on the attached Document
Exception Report), except as set forth on the Exception Report attached
hereto, it has received:
(i) the original Mortgage Note and confirms that the name on the
Mortgage Note matches that on the Loan Schedule;
(ii) the original recorded Mortgage (unless such Mortgage has not yet
been returned by the relevant recording office, as certified by the
Depositor;
(iii) the original recorded assignment of the Mortgage in the form
provided in Section 2.01(c) of the Pooling and Servicing Agreement;
(iv) the original or duplicate original recorded assignment or
assignments of the Mortgage necessary to show a complete chain of assignment
from the originator to the Seller, unless the Depositor has certified that
the related assignment has not been returned from the applicable recording
office; and
(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
E-1
commitment, or a copy thereof certified by the title company, unless the
Depositor has certified that such title policy has not yet been received from
the applicable title insurance 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 Loan, and (b) the information set forth in items (i), (ii), (iii) and
(vii) of the definition of the "Loan Schedule" in Section 1.01 of the Pooling
and Servicing Agreement accurately reflects information set forth in the
Mortgage File.
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 Loans
identified on the Loan Schedule, or (ii) the collectability, insurability,
effectiveness or suitability of any such Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
--------,
as Trustee
By:
----------------------------------
Name:
Title:
E-2
EXHIBIT F
Form Of Transfer Affidavit
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
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 Equity
One ABS, Inc., as depositor (the "DEPOSITOR"), Equity One, Inc. (DE),
_____________, _____________, _____________, _____________, _____________,
_____________, and _____________, as sellers, Equity One, Inc. (DE) as
servicer and ________, as Trustee. Capitalized terms used, but not defined
herein or in Exhibit 1 hereto, shall have the meanings ascribed to such terms
in the Agreement. The Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee.
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 either (i) for its own account or (ii)
as nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit.
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
F-1
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 (attached hereto as Exhibit 2 and incorporated herein by reference)
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 G to the Agreement (a "TRANSFEROR CERTIFICATE")
to the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is ______________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, and the
Transferee is not acting on behalf of such a plan.
* * *
F-2
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 __________, 19__.
---------------------------------
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 __________, 19__.
NOTARY PUBLIC
My Commission expires the ___
day of _________, 19__.
F-3
EXHIBIT 1
to EXHIBIT F
Certain Definitions
"OWNERSHIP INTEREST": As to any Class R 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.
"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)(l) of
the Code) with respect to any Class R Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate whose income
from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with
the conduct of a trade or business within the United States, or a trust if a
court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States Persons have
authority to control all substantial decisions of the trust, unless such
Person has furnished the transferor and the Trustee with a duly completed
Internal Revenue Service Form 4224, and (vi) any other Person so designated
by the Depositor based upon an Opinion of Counsel that the Transfer of an
Ownership Interest in a Class R Certificate to such Person may cause the
REMIC hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section
7701 of the Code or successor provisions. A corporation will not be treated
as an instrumentality of the United States or of any State or political
subdivision thereof for these purposes if all of its activities are subject
to tax and, with the exception of the Federal Home Loan Mortgage Corporation,
a majority of its board of directors is not selected by such government unit.
"PERSON": Any individual, corporation, partnership, joint venture, bank,
joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political
subdivision thereof.
"TRANSFER": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"TRANSFEREE": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
F-4
EXHIBIT 2
to EXHIBIT F
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
a. Each Person holding or acquiring any Ownership Interest in a
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.
b. No Ownership Interest in a Class R Certificate may be registered
on the Closing Date or thereafter transferred, and the Trustee shall not
register the Transfer of any Class R 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 F.
c. Each Person holding or acquiring any Ownership Interest in a
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 in a 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 a Class R Certificate and (C)
not to Transfer its Ownership Interest in a Class R Certificate or to
cause the Transfer of an Ownership Interest in a Class R Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee.
d. Any attempted or purported Transfer of any Ownership Interest in
a Class R Certificate in violation of the provisions of this Section
5.02(b) shall be absolutely null and void and shall vest no rights in
the purported Transferee. If any purported transferee shall become a
Holder of a Class R Certificate in violation of the provisions of this
Section 5.02(b), then the last preceding Permitted Transferee shall be
restored to all rights as Holder thereof retroactive to the date of
registration of Transfer of such Class R Certificate. The Trustee shall
be under no liability to any Person for any registration of Transfer of
a Class R Certificate that is in fact not permitted by this Section 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 either the
Rule 144A Letter or the Investment Letter. The Trustee shall be entitled
but not obligated to recover from any Holder of a Class R Certificate
that was in fact not a Permitted Transferee at the time it became a
Holder or, at such subsequent time as it became other than a Permitted
Transferee, all payments
F-5
made on such Class R 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.
e. 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 Class R Certificate to any
Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class R Certificate set forth in this
Section 5.02(b) shall cease to apply (and the applicable portions of the
legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee,
the Sellers or the Servicer, to the effect that the elimination of such
restrictions will not cause the Trust Fund hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Class R
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
Class R Certificate is not transferred, directly or indirectly, to a Person
that is not a Permitted Transferee and (b) to provide for a means to compel
the Transfer of a Class R Certificate which is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.
F-6
EXHIBIT G
Form Of Transferor Certificate
---------------------
Date
Equity One ABS, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: _______________
--------
---------------------------
---------------------------
Attention:
----------------------------
---------------
Re: Equity One ABS, Inc. Mortgage Pass-Through Certificates,
Series _____, 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 Class R Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
--------------------------------
Print Name of Transferor
By:
----------------------------
Authorized Officer
G-1
EXHIBIT H
Form Of Investment Letter (Non Rule 144A)
---------------------
Date
Equity One ABS, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: _______________
--------
---------------------------
---------------------------
Attention:
----------------------------
---------------
Re: Equity One ABS, Inc. Mortgage Pass-Through Certificates,
Series _____, 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 are an
"accredited investor," as defined in Regulation D under the Act, and have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and
all matters relating thereto or any additional information deemed necessary
to our decision to purchase the Certificates, (d) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act
of 1974, as amended, or a plan or arrangement that is subject to Section 4975
of the Internal Revenue Code of 1986, as amended, nor are we acting on behalf
of any such plan or arrangement, nor are we using the assets of any such plan
or arrangement to effect such acquisition, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with
clause (g) below), (f) 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, or taken any
other action which would result in a violation of Section 5 of the Act, and
(g) we will not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made
H-1
pursuant to an effective registration statement under the Act or is
exempt from such registration requirements, and if requested, we will at our
expense provide an opinion of counsel satisfactory to the addressees of this
Certificate that such sale, transfer or other disposition may be made
pursuant to an exemption from the Act, (2) the purchaser or transferee of
such Certificate has executed and delivered to you a certificate to
substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth
in the Pooling and Servicing Agreement.
Very truly yours,
----------------------------------
Print Name of Transferee
By:
------------------------------
Authorized Officer
H-2
EXHIBIT I
Form Of Rule 144A Letter
---------------------
Date
Equity One ABS, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: _______________
--------
---------------------------
---------------------------
Attention:
----------------------------
---------------
Re: Equity One ABS, Inc. Mortgage Pass-Through Certificates,
Series _____, Class _________________________________________,
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under
the Securities Act of 1933, as amended (the "ACT"), or any state securities
laws and are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and
all matters relating thereto or any additional information deemed necessary
to our decision to purchase the Certificates, (d) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act
of 1974, as amended, or a plan or arrangement that is subject to Section 4975
of the Internal Revenue Code of 1986, as amended, nor are we acting on behalf
of any such plan or arrangement, nor are we using the assets of any such plan
or arrangement to effect such acquisition, (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 Act or that would render the disposition of the
Certificates a violation of Section 5 of the Act or require registration
pursuant thereto, nor will act, nor has authorized or will authorize any
person to act, in such manner with
I-1
respect to the Certificates, (f) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the 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
Act.
I-2
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 either at least $100,000 in
securities or, if Buyer is a dealer, Buyer must own and/or invest on a
discretionary basis at least $10,000,000 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies and
which is
I-3
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of
Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a) (22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part
of an unsold allotment to or subscription by the Buyer, if the Buyer is a
dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the Buyer
reports its securities holdings in its financial statements on the basis of
their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in
accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule
144A.
I-4
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 Buyer
By:
---------------------------
Name:
Title:
Date:
-------------------------
I-5
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.
I-6
5. The Buyer is familiar with Rule 144A and under-stands 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 Buyer or Adviser
By:
---------------------------
Name:
Title:
IF AN ADVISER:
-------------------------------
Print Name of Buyer
Date:
-------------------------
I-7
EXHIBIT J
Form Of Request For Release of Documents
Equity One ABS, Inc.
Mortgage Pass-Through Certificates
Series _____
To: Attn:
----------------------------- -----------------------------
-----------------------------
Re: The Pooling & Servicing Agreement dated as of ________
among Equity One, Inc. (DE), ________, ________,
________, ________, ________ ________, as Sellers, Equity
One, Inc. (DE) as Servicer, and Equity One ABS, Inc. as
Depositor and ________as Trustee _____________
Ladies and Gentlemen:
In connection with the administration of the Loans held by you as
Trustee for Equity One ABS, Inc., we request the release of the Loan File for
the Loan(s) described below, for the reason indicated.
FT Account #: Pool #:
Mortgagor's Name, Address and Zip Code:
Loan Number:
Reason for Requesting Documents (check one)
1. Loan paid in full (_______________________ hereby certifies that
all amounts have been received.)
2. Loan Liquidated (___________________________ hereby certifies that
all proceeds of foreclosure, insurance, or other liquidation have
been finally received.)
3. Loan in Foreclosure.
4. Other (explain):
The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Servicer shall be
deposited into the Certificate Account, and the Servicer shall keep the
Documents and any proceeds separate and distinct from all other property in
the Servicer's possession, custody or control.
J-1
If item 1 or 2 above is checked, and if all or part of the Mortgage
File was previously released to us, please release to us our previous receipt on
file with you, as well as any additional documents in your possession relating
to the above-specified Loan. If item 3 or 4 is checked, upon return of all of
the above documents to you as Trustee, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
--------------------------------
--------------------------------
--------------------------------
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
Date:
------------------------------
TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGEMENT OF RECEIPT
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
Date:
------------------------------
J-2
EXHIBIT K
Copy of Certificate Guarantee Insurance Policy
[SEE ATTACHED]
K-1
SCHEDULES
SCHEDULE I.................................................................S-I-1
SCHEDULE IIA.............................................................S-IIA-1
SCHEDULE IIB.............................................................S-IIB-1
SCHEDULE IIC.............................................................S-IIC-1
SCHEDULE IID.............................................................S-IID-1
SCHEDULE IIE.............................................................S-IIE-1
SCHEDULE IIF.............................................................S-IIF-1
SCHEDULE IIG.............................................................S-IIG-1
SCHEDULE IIH.............................................................S-IIH-1
SCHEDULE IIX.............................................................S-IIX-1
SCHEDULE IIIA...........................................................S-IIIA-1
SCHEDULE IIIB...........................................................S-IIIB-1
SCHEDULE IIIC...........................................................S-IIIC-1
SCHEDULE IIID...........................................................S-IIID-1
SCHEDULE IIIE..........................................................S-III-E-1
SCHEDULE IIIF..........................................................S-III-F-1
SCHEDULE IIIG..........................................................S-III-G-1
SCHEDULE IIIH..........................................................S-III-H-1
SCHEDULE IV...............................................................S-IV-1
SCHEDULE V.................................................................S-V-1
viii
EXHIBITS
EXHIBIT A....................................................................A-1
EXHIBIT B....................................................................B-1
EXHIBIT C....................................................................C-1
EXHIBIT D....................................................................D-1
EXHIBIT E....................................................................E-1
EXHIBIT F....................................................................F-1
EXHIBIT G....................................................................G-1
EXHIBIT H....................................................................H-1
EXHIBIT I....................................................................I-1
EXHIBIT J....................................................................J-1
EXHIBIT K....................................................................K-1
ix
