EXHIBIT 4.1
POOLING AND SERVICING AGREEMENT
dated as of December 1, 2002
by and among
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
(Depositor)
AMERICAN BUSINESS CREDIT, INC.
(Servicer)
and
JPMORGAN CHASE BANK
(Trustee, Collateral Agent and Back-up Servicer)
ABFS MORTGAGE LOAN TRUST 2002-4
Mortgage Pass-Through Certificates, Series 2002-4,
Class A, Class A-IO,
Class M-1, Class M-2, Class B, Class X and Class R
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms .................................................................1
Section 1.02 Provisions of General Application..........................................................32
Section 1.03 Business Day Certificate...................................................................32
ARTICLE II
ESTABLISHMENT OF THE TRUST SALE AND CONVEYANCE OF THE TRUST FUND
Section 2.01 Establishment of the Trust.................................................................33
Section 2.02 Purchase and Sale of Initial Mortgage Loans................................................33
Section 2.03 Purchase and Sale of Subsequent Mortgage Loans.............................................33
Section 2.04 Possession of Mortgage Files; Access to Mortgage Files.....................................35
Section 2.05 Delivery of Mortgage Loan Documents........................................................36
Section 2.06 Acceptance by Trustee of the Trust Fund; Certain Substitutions; Certification by
Trustee....................................................................................39
Section 2.07 Designations under REMIC Provisions; Designation of Startup Day............................41
Section 2.08 Execution of Certificates..................................................................48
Section 2.09 Application of Principal and Interest......................................................49
Section 2.10 Grant of Security Interest.................................................................49
Section 2.11 Further Action Evidencing Assignments......................................................49
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations of the Servicer and the Unaffiliated Seller................................50
Section 3.02 Representations, Warranties and Covenants of the Depositor.................................52
Section 3.03 Purchase and Substitution..................................................................53
Section 3.04 Representations, Warranties and Covenants of the Trustee, the Collateral Agent and
the Back-up Servicer.......................................................................55
ARTICLE IV
THE CERTIFICATES
Section 4.01 The Certificates...........................................................................56
Section 4.02 Registration of Transfer and Exchange of Certificates......................................56
Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates..........................................62
Section 4.04 Persons Deemed Owners......................................................................62
Page
ARTICLE V
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 5.01 REMIC Matters; The Servicer................................................................63
Section 5.02 Collection of Certain Mortgage Loan Payments; Collection Account...........................64
Section 5.03 Permitted Withdrawals from the Collection Account..........................................65
Section 5.04 Hazard Insurance Policies; Property Protection Expenses....................................67
Section 5.05 Assumption and Modification Agreements.....................................................67
Section 5.06 Realization Upon Defaulted Mortgage Loans..................................................68
Section 5.07 Trustee to Cooperate.......................................................................69
Section 5.08 Servicing Compensation; Payment of Certain Expenses by Servicer............................70
Section 5.09 Annual Statement as to Compliance..........................................................70
Section 5.10 Annual Independent Public Accountants' Servicing Report....................................70
Section 5.11 Access to Certain Documentation............................................................71
Section 5.12 Maintenance of Fidelity Bond...............................................................71
Section 5.13 The Subservicers...........................................................................71
Section 5.14 Reports to the Trustee; Collection Account Statements......................................71
Section 5.15 Optional Purchase of Defaulted Mortgage Loans..............................................72
Section 5.16 Reports to be Provided by the Servicer.....................................................72
Section 5.17 Adjustment of Servicing Compensation in Respect of Prepaid Mortgage Loans..................73
Section 5.18 Periodic Advances; Special Advance.........................................................73
Section 5.19 Indemnification; Third Party Claims........................................................74
Section 5.20 Maintenance of Corporate Existence and Licenses; Merger or Consolidation of the
Servicer...................................................................................74
Section 5.21 Assignment of Agreement by Servicer; Servicer Not to Resign................................75
Section 5.22 Periodic Filings with the Securities and Exchange Commission; Additional
Information................................................................................75
ARTICLE VI
DISTRIBUTIONS AND PAYMENTS
Section 6.01 Establishment of Accounts; Withdrawals from Accounts; Deposits to the Distribution
Account....................................................................................76
Section 6.02 Permitted Withdrawals From the Distribution Account........................................78
Section 6.03 Collection of Money........................................................................78
Section 6.04 [RESERVED].................................................................................78
Section 6.05 Distributions..............................................................................78
Section 6.06 Investment of Accounts.....................................................................81
Section 6.07 Reports....................................................................................82
Section 6.08 Additional Reports by Trustee..............................................................85
Section 6.09 Compensating Interest......................................................................85
Section 6.10 Supplemental Interest Payment Account......................................................85
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Page
ARTICLE VII
DEFAULT
Section 7.01 Events of Default..........................................................................86
Section 7.02 Back-up Servicer to Act; Appointment of Successor..........................................88
Section 7.03 Waiver of Defaults.........................................................................90
ARTICLE VIII
TERMINATION
Section 8.01 Termination................................................................................90
Section 8.02 Additional Termination Requirements........................................................91
Section 8.03 Accounting Upon Termination of Servicer....................................................92
ARTICLE IX
THE TRUSTEE
Section 9.01 Duties of Trustee..........................................................................93
Section 9.02 Certain Matters Affecting the Trustee......................................................94
Section 9.03 Trustee Not Liable for Certificates or Mortgage Loans......................................96
Section 9.04 Trustee May Own Certificates...............................................................96
Section 9.05 Trustee's Fees and Expenses; Indemnity.....................................................96
Section 9.06 Eligibility Requirements for Trustee.......................................................97
Section 9.07 Resignation and Removal of the Trustee.....................................................97
Section 9.08 Successor Trustee..........................................................................98
Section 9.09 Merger or Consolidation of Trustee.........................................................99
Section 9.10 Appointment of Co-Trustee or Separate Trustee..............................................99
Section 9.11 Tax Returns...............................................................................100
Section 9.12 Retirement of Certificates................................................................100
Section 9.13 Trustee May Enforce Claims Without Possession of Certificates.............................100
Section 9.14 Suits for Enforcement.....................................................................100
ARTICLE X
THE COLLATERAL AGENT
Section 10.01 Duties of the Collateral Agent............................................................100
Section 10.02 Certain Matters Affecting the Collateral Agent............................................102
Section 10.03 Collateral Agent Not Liable for Certificates or Mortgage Loans............................103
Section 10.04 Collateral Agent May Own Certificates.....................................................103
Section 10.05 Collateral Agent's Fees and Expenses; Indemnity...........................................103
Section 10.06 Eligibility Requirements for Collateral Agent.............................................104
Section 10.07 Resignation and Removal of the Collateral Agent...........................................104
Section 10.08 Successor Collateral Agent................................................................105
Section 10.09 Merger or Consolidation of Collateral Agent...............................................105
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Page
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Limitation on Liability of the Depositor, the Back-up Servicer and the Servicer...........106
Section 11.02 Acts of Certificateholders................................................................106
Section 11.03 Amendment.................................................................................107
Section 11.04 Recordation of Agreement..................................................................107
Section 11.05 Duration of Agreement.....................................................................107
Section 11.06 Notices...................................................................................108
Section 11.07 Severability of Provisions................................................................108
Section 11.08 No Partnership............................................................................108
Section 11.09 Counterparts..............................................................................108
Section 11.10 Successors and Assigns....................................................................108
Section 11.11 Headings..................................................................................108
Section 11.12 [RESERVED]................................................................................108
Section 11.13 Third Party Beneficiary...................................................................109
Section 11.14 [RESERVED]................................................................................109
Section 11.15 Appointment of Tax Matters Person; Certain Taxes..........................................109
Section 11.16 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL..............................112
EXHIBITS
EXHIBIT A Class A Certificates
EXHIBIT B Class A-IO Certificate
EXHIBIT C Class M-1 and Class M-2 Certificates
EXHIBIT D Class B Certificate
EXHIBIT E Class R Certificate
EXHIBIT F Class X Certificate
EXHIBIT G Contents of the Mortgage File
EXHIBIT H Certificate Re: Prepaid Loans
EXHIBIT I [Reserved]
EXHIBIT J Initial Certification of Collateral Agent
EXHIBIT K Final Certification of Collateral Agent
EXHIBIT L Request for Release of Documents
EXHIBIT M Transfer Affidavit and Agreement
EXHIBIT N Transferor's Certificate
EXHIBIT O ERISA Investment Representation Letter
EXHIBIT P Resale Certification
EXHIBIT Q Assignment
EXHIBIT R Wiring Instruction Form
EXHIBIT S Collateral Agent's Acknowledgment of Receipt
EXHIBIT T Form of Subsequent Transfer Agreement
SCHEDULES
SCHEDULE I Mortgage Loan Schedule
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POOLING AND SERVICING AGREEMENT, relating to ABFS MORTGAGE
LOAN TRUST 2002-4, dated as of December 1, 2002 (this "Agreement"), by and among
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP., a Delaware corporation, in
its capacity as depositor (the "Depositor"), AMERICAN BUSINESS CREDIT, INC., a
Pennsylvania corporation, in its capacity as servicer (the "Servicer"), and
JPMORGAN CHASE BANK, a New York banking corporation, in its capacity as trustee,
collateral agent and back-up servicer (the "Trustee", the "Collateral Agent" and
the "Back-up Servicer", respectively).
WHEREAS, the Depositor wishes to establish a trust which
provides for the allocation and sale of the beneficial interests therein and the
maintenance and distribution of the trust estate;
WHEREAS, the Servicer has agreed to service the Mortgage
Loans, which constitute the principal assets of the trust estate; and
WHEREAS, JPMorgan Chase Bank is willing to serve in the
capacities of Trustee, Collateral Agent and Back-up Servicer hereunder.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the Depositor, the Servicer, the Trustee,
the Collateral Agent and the Back-up Servicer hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. Whenever used herein, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings.
ABFS: American Business Financial Services, Inc.
ACCEPTED SERVICING PRACTICES: The Servicer's normal servicing
practices including practices regarding reconciliation of bank accounts,
processing of mortgage payments, processing of disbursements for tax and
insurance payments, maintenance of mortgage loan records, performance of
collection efforts including disposition of delinquent loans, foreclosure
activities and disposition of real estate owned and performance of investor
accounting and reporting processes. Such practices will conform to the mortgage
servicing practices of prudent mortgage lending institutions which service, for
their own account, mortgage loans of the same type as the Mortgage Loans in the
jurisdiction in which the related Mortgaged Properties are located, which may
change from time to time; provided, that such practices shall at all times
conform to the Credit and Servicing Policy Manuals.
ACCOUNT: Any of the Collection Account, the Distribution
Account, the Interest Reserve Account, the Capitalized Interest Account, the
Pre-Funding Account or the Supplemental Interest Payment Account.
ACCRUAL PERIOD: With respect to the Offered Certificates and
any Distribution Date, the prior calendar month.
ADDITION NOTICE: A written notice from the Unaffiliated Seller
to the Trustee and the Rating Agencies that the Unaffiliated Seller desires to
make a Subsequent Transfer.
ADJUSTED PASS-THROUGH RATE: With respect to any Distribution
Date, the weighted average (weighted by Certificate Principal Balance or Class
A-IO Notional Balance, as applicable) of (a) the Class A Pass-through Rate, (b)
the Class A-IO Pass-through Rate (c) the Class M-1 Pass-through Rate, (d) the
Class M-2 Pass-through Rate, and (e) the Class B Pass-through Rate.
AFFILIATE: With respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
AGGREGATE PRINCIPAL BALANCE: With respect to the Mortgage
Loans and any date of determination, the aggregate Principal Balance of the
Mortgage Loans as of such date of determination.
AGREEMENT: This Pooling and Servicing Agreement, including the
Exhibits hereto, and all amendments hereof and supplements hereto.
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution
Date, the amount, if any, by which the aggregate Certificate Principal Balance
of the Offered Certificates after distributions of principal on such
Distribution Date exceeds the Current Pool Principal Balance for that
Distribution Date.
APPRAISED VALUE: As to any Mortgaged Property and time
referred to herein, the appraised value of the Mortgaged Property based upon the
appraisal made by or on behalf of the related Originator at the time referred to
herein or, in the case of a Mortgage Loan that is a purchase money mortgage
loan, the sales price of the Mortgaged Property, if such sales price is less
than such appraised value.
ASSIGNMENT OF MORTGAGE: With respect to each Mortgage Loan, an
assignment of the Mortgage, notice of transfer or equivalent instrument
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage to the Trustee
for the benefit of the Certificateholders.
AUTHORIZED DENOMINATIONS: Each of the Offered Certificates is
issuable only in the minimum Percentage Interest corresponding to a minimum
denomination of $1,000 or integral multiples of $1,000 in excess thereof, in
each case of Certificate Principal Balance; provided, however, that one
Certificate of each Class is issuable in a denomination equal to any such
multiple plus an additional amount such that the aggregate denomination of each
Class of Offered Certificates shall be equal to the applicable Original
Certificate Principal Balance or the Class A-IO Notional Balance, as applicable.
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BACK-UP SERVICER: JPMorgan Chase Bank, a New York banking
corporation, its successors and assigns.
BACK-UP SERVICING FEE: As to any Distribution Date, the fee
payable to the Back-up Servicer in respect of its services as Back-up Servicer
that accrues at a monthly rate equal to one-twelfth of 0.01125% on the Principal
Balance of each Mortgage Loan as of the immediately preceding Due Date.
BANKRUPTCY CODE: The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.
BASIC DOCUMENTS: This Agreement, the Unaffiliated Seller's
Agreement, the Indemnification Agreement and the Underwriting Agreement.
BASIC PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the positive excess, if any, of (x) the Principal Remittance
Amount for such Distribution Date over (y) the Excess Overcollateralized Amount
for such Distribution Date.
BUSINESS DAY: Any day other than (a) a Saturday or Sunday, or
(b) a day on which banking institutions in the States of Pennsylvania, New York,
Delaware or New Jersey are authorized or obligated by law or executive order to
be closed.
BUSINESS PURPOSE PROPERTY: Any mixed-use property, commercial
property, or four or more unit multifamily property.
CAPITALIZED INTEREST ACCOUNT: The Capitalized Interest Account
established in accordance with Section 6.01(a) hereof and maintained by the
Trustee.
CAPITALIZED INTEREST REQUIREMENT: With respect to the
Distribution Dates occurring in January, February and March 2003, an amount
equal to (A) the product of (i) one-twelfth of the Adjusted Pass-Through Rate as
calculated as of such Distribution Date and (ii) the Pre-Funding Amount as of
the first day of the related Due Period, minus (B) 30 days' interest, at the
related Mortgage Interest Rate, on the Subsequent Mortgage Loans transferred to
the Trust during the related Due Period which had a Due Date after the related
Subsequent Cut-Off Date during the related Due Period, minus (C) the amount of
any Pre-Funding Earnings earned from the last Distribution Date (or the Closing
Date with respect to the January 2003 Distribution Date). In no event will the
Capitalized Interest Requirement be less than zero.
CAPPED CERTIFICATES: The Class A, Class M-1, Class M-2 and
Class B Certificates.
CERCLA: The Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
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CERTIFICATE: Any Class A, Class A-IO, Class M-1, Class M-2,
Class B, Class X or Class R Certificate executed by the Trustee on behalf of the
Trust Fund and authenticated by the Trustee.
CERTIFICATEHOLDER or HOLDER: Each Person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purposes of giving any consent, waiver, request or demand pursuant to this
Agreement, any Certificate registered in the name of the Servicer or any
Subservicer or the Unaffiliated Seller, or any Affiliate of any of them, shall
be deemed not to be outstanding and the undivided Percentage Interest evidenced
thereby shall not be taken into account in determining whether the requisite
percentage of Certificates necessary to effect any such consent, waiver, request
or demand has been obtained. For purposes of any consent, waiver, request or
demand of Certificateholders pursuant to this Agreement, upon the Trustee's
request, the Servicer and the Unaffiliated Seller shall provide to the Trustee a
notice identifying any of their respective Affiliates or the Affiliates of any
Subservicer that is a Certificateholder as of the date(s) specified by the
Trustee in such request.
CERTIFICATE PRINCIPAL BALANCE: With respect to any Class of
Certificates, other than the Class A-IO, Class X or Class R Certificates, as of
any date of determination, the maximum dollar amount of principal to which the
Holders thereof are then entitled hereunder, such amount being equal to the
Original Certificate Principal Balance of such Class minus (i) the amount of all
distributions of principal previously made with respect thereto and (ii) in the
case of any Subordinate Certificates, reduced by any Applied Realized Loss
Amounts applicable to such Class of Subordinate Certificates. The Class A-IO,
Class X and Class R Certificates do not have a "Certificate Principal Balance".
CERTIFICATE REGISTER: As defined in Section 4.02.
CERTIFICATE REGISTRAR: As defined in Section 4.02.
CHANGE OF CONTROL: Any of the following: (a) ABFS shall cease
to own, beneficially and of record, 100% of the issued and outstanding Stock of
the Servicer; (b) the consummation of a merger or consolidation of ABFS with or
into another entity or any other corporate reorganization, if more that 50% of
the combined voting power of the continuing or surviving entity's Stock
outstanding immediately after such merger, consolidation or such other
reorganization is owned by persons who were not stockholders of ABFS immediately
prior to such merger, consolidation or other reorganization; or (c) the sale,
transfer, or other disposition of all or substantially all of ABFS's assets. For
purposes of the foregoing, "Stock" means all shares, options, warrants,
interests, participation or other equivalents (regardless of how designated) of
or in a corporation or equivalent entity, whether voting or nonvoting, including
common stock, preferred stock, convertible debentures and all agreements,
instruments and documents convertible, in whole or in part, into any one or more
or all of the foregoing.
CIVIL RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act
of 1940, as amended or similar state statutes.
CIVIL RELIEF ACT INTEREST SHORTFALL: With respect to any
Distribution Date, for any Mortgage Loan as to which there has been a reduction
in the amount of interest collectible thereon for the most recently ended Due
Period as a result of the application of the Civil Relief Act, the amount, if
any, by which (a) interest collectible on such Mortgage Loan during the most
recently ended calendar month is less than (b) the sum of one month's interest
on the Principal Balance of such Mortgage Loan, calculated at a rate equal to
the Mortgage Interest Rate.
4
CLASS: Each class of Certificates designated as the Class A,
Class A-IO, Class M-1, Class M-2, Class B, Class X or Class R Certificates and,
for the purposes of Section 2.07, any class of interests referenced in Section
2.07.
CLASS A CERTIFICATE: Any Certificate designated as a "Class A
Certificate" on the face thereof, in the form of Exhibit A hereto. The Class A
Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS A PASS-THROUGH RATE: With respect to any Distribution
Date, the lesser of (1) for any Distribution Date which occurs on or prior to
the Clean-Up Call Date, the per annum rate equal to 4.428%, and for any
Distribution Date thereafter, the per annum rate equal to 4.928% and (2) the Net
WAC Cap for such Distribution Date.
CLASS A-IO CERTIFICATE: Any Certificate designated as a "Class
A-IO Certificate" on the face thereof, in the form of Exhibit B hereto.
CLASS A-IO NOTIONAL BALANCE: With respect to any Distribution
Date (i) prior to the Distribution Date occurring in July 2005, an amount equal
to the lesser of (x) the Class A-IO Scheduled Notional Balance and (y) the
Aggregate Principal Balance of the Mortgage Loans as of the first day of the
related Due Period and (ii) on and after the Distribution Date occurring in July
2005, $0.
CLASS A-IO PASS-THROUGH RATE: With respect to any Distribution
Date, a per annum rate equal to 4.00%.
CLASS A-IO SCHEDULED NOTIONAL BALANCE: With respect to any
Distribution Date, the applicable amount set forth in the following schedule:
Class A-IO
Scheduled
Distribution Date Notional Balance
----------------- ----------------
January 2003 $99,800,000
February 2003 $99,800,000
March 2003 $99,800,000
April 2003 $98,300,000
May 2003 $98,300,000
June 2003 $98,300,000
July 2003 $94,700,000
August 2003 $94,700,000
September 2003 $94,700,000
October 2003 $89,500,000
November 2003 $89,500,000
December 2003 $89,500,000
January 2004 $83,500,000
February 2004 $83,500,000
March 2004 $83,500,000
April 2004 $78,000,000
May 2004 $78,000,000
June 2004 $78,000,000
July 2004 $77,200,000
August 2004 $77,200,000
September 2004 $77,200,000
October 2004 $61,100,000
November 2004 $61,100,000
December 2004 $61,100,000
January 2005 $48,500,000
February 2005 $48,500,000
March 2005 $48,500,000
April 2005 $41,500,000
May 2005 $41,500,000
June 2005 $41,500,000
July 2005
and thereafter $0
--------------------------------------------------------------------------------
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CLASS B CERTIFICATE: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit D hereto. The Class B
Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS B PASS-THROUGH RATE: With respect to any Distribution
Date, the lesser of (1) for any Distribution Date which occurs on or prior to
the Clean-Up Call Date, the per annum rate equal to 8.612%, and for any
Distribution Date thereafter, the per annum rate equal to 9.112% and (2) the Net
WAC Cap for such Distribution Date.
CLASS B PRINCIPAL DISTRIBUTION AMOUNT: On any Distribution
Date (x) prior to the Stepdown Date and on any Distribution Date thereafter on
which a Trigger Event is in effect, (i) if any of the Class A, Class M-1 or
Class M-2 Certificates remain outstanding, zero or (ii) if the aggregate
Certificate Principal Balance of the Class A, Class M-1 and Class M-2
Certificates has been reduced to zero, the lesser of (a) the Certificate
Principal Balance of the Class B Certificates immediately prior to such
Distribution Date and (b) 100% of the Principal Distribution Amount and (y)
following the Stepdown Date and to the extent a Trigger Event is not in effect,
the least of (1) the Principal Distribution Amount remaining after distribution
of the Senior, Class M-1 and Class M-2 Principal Distribution Amounts on the
related Distribution Date, (2) the excess of (i) the sum of (a) the aggregate
Certificate Principal Balance of the Class A, Class M-1 and Class M-2
Certificates after distribution of the Senior, Class M-1 and Class M-2 Principal
Distribution Amounts on the related Distribution Date and (b) the Certificate
Principal Balance of the Class B Certificates immediately prior to the related
Distribution Date over (ii) the lesser of (x) 88.50% of the Current Pool
Principal Balance for that Distribution Date and (y) the Current Pool Principal
Balance for that Distribution Date minus the OC Floor (but not less than zero)
and (3) the Certificate Principal Balance of the Class B Certificates
immediately prior to the related Distribution Date.
CLASS INTEREST CARRYOVER SHORTFALL: With respect to any Class
of Offered Certificates and any Distribution Date, an amount equal to the sum of
(a) the excess, if any, of the Class Monthly Interest Amount for such Class (the
amount to which the Class is entitled in the absence of any shortfall but after
giving effect to the Net WAC Cap, if applicable) for the preceding Distribution
Date and any outstanding Class Interest Carryover Shortfall with respect to that
Class from any preceding Distribution Dates, over the amount in respect of
interest that is actually distributed to the Holders of that Class on the
preceding Distribution Date, plus (b) one-month's interest on the amount
described in clause (a), to the extent permitted by law, at the related
Pass-Through Rate.
6
CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class
M-1 Certificate" on the face thereof, in the form of Exhibit C hereto. The Class
M-1 Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS M-1 PASS-THROUGH RATE: With respect to any Distribution
Date, the lesser of (1) for any Distribution Date which occurs on or prior to
the Clean-Up Call Date, the per annum rate equal to 6.442%, and for any
Distribution Date thereafter, the per annum rate equal to 6.942% and (2) the Net
WAC Cap for such Distribution Date.
CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: On any Distribution
Date (x) prior to the Stepdown Date and on any Distribution Date thereafter on
which a Trigger Event is in effect, (i) if any Class A Certificates remain
outstanding, zero or (ii) if the Certificate Principal Balance of the Class A
Certificates has been reduced to zero, the lesser of (a) the Certificate
Principal Balance of the Class M-1 Certificates immediately prior to such
Distribution Date and (b) 100% of the Principal Distribution Amount and (y)
following the Stepdown Date and to the extent a Trigger Event is not in effect,
the least of (1) the Principal Distribution Amount remaining after distribution
of the Senior Principal Distribution Amount on the related Distribution Date,
(2) the excess of (i) the sum of (a) the Certificate Principal Balance of the
Class A Certificates after distribution of the Senior Principal Distribution
Amount on the related Distribution Date and (b) the Certificate Principal
Balance of the Class M-1 Certificates immediately prior to the related
Distribution Date over (ii) the lesser of (x) 76.00% of the Current Pool
Principal Balance for that Distribution Date and (y) the Current Pool Principal
Balance for that Distribution Date minus the OC Floor (but not less than zero)
and (3) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to the related Distribution Date.
CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class
M-2 Certificate" on the face thereof, in the form of Exhibit C hereto. The Class
M-2 Certificates shall be issued with an initial aggregate Certificate Principal
Balance equal to the Original Certificate Principal Balance therefor.
CLASS M-2 PASS-THROUGH RATE: With respect to any Distribution
Date, the lesser of (1) for any Distribution Date which occurs on or prior to
the Clean-Up Call Date, the per annum rate equal to 7.423%, and for any
Distribution Date thereafter, the per annum rate equal to 7.923% and (2) the Net
WAC Cap for such Distribution Date.
CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: On any Distribution
Date (x) prior to the Stepdown Date and on any Distribution Date thereafter on
which a Trigger Event is in effect, (i) if any of the Class A and Class M-1
Certificates remain outstanding, zero or (ii) if the aggregate Certificate
Principal Balance of the Class A Certificates and Class M-1 Certificates has
been reduced to zero, the lesser of (a) the Certificate Principal Balance of the
Class M-2 Certificates immediately prior to such Distribution Date and (b) 100%
of the Principal Distribution Amount and (y) following the Stepdown Date and to
the extent a Trigger Event is not in effect, the least of (1) the Principal
Distribution Amount remaining after distribution of the Senior and Class M-1
Principal Distribution Amounts on the related Distribution Date, (2) the excess
of (i) the sum of (a) the aggregate Certificate Principal Balance of the Class A
and Class M-1 Certificates after distribution of the Senior and Class M-1
Principal Distribution Amounts, on the related Distribution Date and (b) the
Certificate Principal Balance of the Class M-2 Certificates immediately prior to
the related Distribution Date over (ii) the lesser of (x) 85.50% of the Current
Pool Principal Balance for that Distribution Date and (y) the Current Pool
Principal Balance for that Distribution Date minus the OC Floor and (3) the
Certificate Principal Balance of the Class M-2 Certificates immediately prior to
the related Distribution Date.
7
CLASS MONTHLY INTEREST AMOUNT: With respect to any Class of
Offered Certificates and any Distribution Date, the amount of interest accrued
during the related Accrual Period on the Certificate Principal Balance of such
Class immediately prior to such Distribution Date at the related Pass-Through
Rate, as reduced by that Class's pro rata share of Mortgage Loan Interest
Shortfalls for such Distribution Date allocated to such Class pursuant to
Section 6.05(c) of this Agreement.
CLASS PRINCIPAL CARRYOVER SHORTFALL: With respect to any Class
of Subordinate Certificates and any Distribution Date, the excess, if any, of
(a) the sum of (x) the amount of the reduction in the Certificate Principal
Balance of that Class of Subordinate Certificates on such Distribution Date as a
result of Applied Realized Loss Amounts and (y) the amount of such reductions on
prior Distribution Dates, over (b) the amount distributed in respect of the
Class Principal Carryover Shortfall to such Class of Subordinate Certificates on
prior Distribution Dates. Any amounts distributed to a Class of Subordinate
Certificates in respect of any Class Principal Carryover Shortfalls shall not be
applied to reduce the Certificate Principal Balance of that Class.
CLASS R CERTIFICATE: Any Certificate designated as a "Class R
Certificate" on the face thereof, in the form of Exhibit E hereto.
CLASS R CERTIFICATEHOLDER: A Holder of a Class R Certificate.
CLASS X CERTIFICATE: Any Certificate designated as a "Class X
Certificate" on the face thereof, in the form of Exhibit F hereto.
CLASS X CERTIFICATEHOLDER: A Holder of a Class X Certificate.
CLASS X DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the sum of (i) the Overcollateralization Reduction Amount and (ii) the
product of the notional principal balance of the Class X Certificate and the
Pass-Through Rate of the Class X Certificate each as described in footnotes (7)
and (8), respectively, of Section 2.07(b) hereof for the current and for all
prior Distribution Dates less amounts distributed to the Class X Certificates on
prior Distribution Dates pursuant to Sections 6.05(c)(viii) and (xii) hereof.
CLEAN-UP CALL DATE: As defined in Section 8.01(b).
CLOSING DATE: December 23, 2002.
8
CODE: The Internal Revenue Code of 1986, as amended.
COLLATERAL AGENT: JPMorgan Chase Bank, its successors and
assigns.
COLLECTION ACCOUNT: The Eligible Account established and
maintained by the Servicer pursuant to Section 5.02(b).
COMBINED LOAN-TO-VALUE RATIO or CLTV: As to any Mortgage Loan
at any time, the fraction, expressed as a percentage, the numerator of which is
the sum of (i) the Principal Balance thereof at such time and (ii) if such
Mortgage Loan is subject to a second mortgage, the unpaid principal balance of
any related first mortgage loan or loans, if any, as of such time, and the
denominator of which is the Appraised Value of any related Mortgaged Property or
Properties as of the date of the appraisal used by or on behalf of the
Unaffiliated Seller to underwrite such Mortgage Loan.
COMMISSION: The Securities and Exchange Commission.
COMPENSATING INTEREST: As defined in Section 6.09 hereof.
CONTROLLING PARTY: The Trustee, acting at the direction of the
Majority Certificateholders.
CORRESPONDING CLASS: Means the Class of Master REMIC Regular
Interests as used in the Table in Section 2.07.
CREDIT AND SERVICING POLICY MANUALS: With respect to an
Originator, its written policies and procedures regarding underwriting,
origination and servicing of mortgage loans, as delivered to the Rating Agencies
on or prior to the Closing Date, with such changes notified to the Rating
Agencies (a) that do not have a material adverse effect on such policies and
procedures, or (b) that satisfy the Rating Agency Condition, or (c) that the
Servicer does not apply to the Mortgage Loans.
CUMULATIVE LOSS PERCENTAGE: As of any date of determination
thereof, the percentage obtained by dividing (x) the aggregate of all Liquidated
Loan Losses incurred since the Closing Date through the last day of the related
Due Period by (y) the Maximum Pool Principal Balance.
CUMULATIVE LOSS TRIGGER EVENT: With respect to any
Distribution Date, the event that occurs if the Cumulative Loss Percentage for
such Distribution Date exceeds the following percentages with respect to the
applicable Distribution Date specified below:
Distribution Date Loss Percentage
----------------- ---------------
January 2006 - December 2006 2.75% for the first month, plus an additional 1/12
of 1.75% for each month thereafter
January 2007 - December 2007 4.50% for the first month, plus an additional 1/12
of 1.50% for each month thereafter
January 2008 - December 2008 6.00% for the first month, plus an additional 1/12
of 1.00% for each month thereafter
January 2009 - December 2009 7.00% for the first month, plus an additional 1/12
of 0.25% for each month thereafter
January 2010 and thereafter 7.25%
9
CURRENT POOL PRINCIPAL BALANCE: With respect to any
Distribution Date, the sum of (i) the Aggregate Principal Balance of the
Mortgage Loans on the last day of the related Due Period, and (ii) the
Pre-Funding Amount (net of Pre-Funding Earnings) immediately prior to the
Distribution Date.
CUT-OFF DATE: With respect to Initial Mortgage Loans, the
Initial Cut-Off Date, and, with respect to Subsequent Mortgage Loans, the
Subsequent Cut-Off Date.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction of the Monthly Payment due on
such Mortgage Loan in a proceeding under the United States Bankruptcy Code,
except such a reduction that constitutes a Deficient Valuation or a permanent
forgiveness of principal.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the United
States Bankruptcy Code.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced by or to be
replaced by a Qualified Substitute Mortgage Loan.
DELINQUENCY RATIO: With respect to any Distribution Date, the
percentage equivalent of a fraction (a) the numerator of which equals the
aggregate Principal Balances of all Mortgage Loans that are 60 or more days
Delinquent, in foreclosure, converted to REO Property or in bankruptcy and are
60 or more days Delinquent, as of the last day of the related Due Period and (b)
the denominator of which is the Current Pool Principal Balance for that
Distribution Date.
DELINQUENCY TRIGGER EVENT: The event that occurs when the
Rolling Three Month Delinquency Rate exceeds 45% of the Senior Enhancement
Percentage.
DELINQUENT: A Mortgage Loan is "delinquent" if any payment due
thereon is not made by the close of business on the day such payment is
scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has
not been received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on.
10
DEPOSITOR: Credit Suisse First Boston Mortgage Securities
Corp., a Delaware corporation, and any successor thereto.
DEPOSITORY: The Depository Trust Company, 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 and any successor Depository hereafter named.
DIRECT PARTICIPANT: Any broker-dealer, bank or other financial
institution for which the Depository holds Offered Certificates from time to
time as a securities depository.
DISTRIBUTION ACCOUNT: The Distribution Account established in
accordance with Section 6.01(a) hereof and maintained by the Trustee.
DISTRIBUTION DATE: The 15th day of any month or if such 15th
day is not a Business Day, the first Business Day immediately following,
commencing on January 15, 2003.
DUE DATE: With respect to each Mortgage Loan and any
Distribution Date, the day of the calendar month preceding the calendar month in
which such Distribution Date occurs on which the Monthly Payment for such
Mortgage Loan was due.
DUE PERIOD: With respect to each Distribution Date, the
calendar month preceding the related Distribution Date.
ELIGIBLE ACCOUNT: Either (A) an account or accounts maintained
with an institution (which may include the Trustee, provided such institution
otherwise meets these requirements) whose deposits are insured by the FDIC, the
unsecured and uncollateralized debt obligations of which institution shall be
rated "AA" or better by S&P and "Aa2" or better by Moody's and in the highest
short term rating category by S&P and Moody's, and which is (i) a federal
savings and loan association duly organized, validly existing and in good
standing under the federal banking laws, (ii) an institution (including the
Trustee) duly organized, validly existing and in good standing under the
applicable banking laws of any state, (iii) a national banking association duly
organized, validly existing and in good standing under the federal banking laws,
(iv) a principal subsidiary of a bank holding company, or (v) approved in
writing by the Rating Agencies or (B) a trust account or accounts maintained
with the trust department of a federal or state chartered depository institution
or trust company (which may include the Trustee, provided that the Trustee
otherwise meets these requirements), having capital and surplus of not less than
$50,000,000, acting in its fiduciary capacity.
ERISA: As defined in Section 4.02(n) hereof.
EVENT OF DEFAULT: As described in Section 7.01.
EXCESS INTEREST: For any Distribution Date, the sum of (x) the
amount, if any, specified in Section 6.05(a)(viii) hereof for such Distribution
Date and (y) the Excess Overcollateralized Amount for such Distribution Date.
11
EXCESS OVERCOLLATERALIZED AMOUNT: With respect to any
Distribution Date, the excess, if any, of (a) the Overcollateralized Amount that
would apply on such Distribution Date after taking into account all
distributions that would be made on such Distribution Date (other than the
Overcollateralization Reduction Amounts) over (b) the Specified
Overcollateralization Amount.
FDIC: The Federal Deposit Insurance Corporation, and any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, and any
successor thereto.
FINAL CERTIFICATION: As defined in Section 2.06(b) hereof.
FINAL SCHEDULED MATURITY DATE: With respect to any Class of
Offered Certificates (other than the Class A-IO Certificates), the Distribution
Date occurring in the month specified below:
Final Scheduled
Class Maturity Date
----- -------------
A December 2033
M-1 December 2033
M-2 December 2033
B December 2033
FNMA: The Federal National Mortgage Association, and any
successor thereto.
FORECLOSURE PROFITS: As to any Servicer Remittance Date, the
excess, if any, of (i) Net Liquidation Proceeds in respect of each Mortgage Loan
that became a Liquidated Mortgage Loan during the related Due Period over (ii)
the sum of the unpaid Principal Balance of each such Liquidated Mortgage Loan
plus accrued and unpaid interest at the applicable Mortgage Interest Rate on the
unpaid Principal Balance thereof from the Due Date to which interest was last
paid by the Mortgagor (or, in the case of a Liquidated Mortgage Loan that had
been an REO Mortgage Loan, from the Due Date to which interest was last deemed
to have been paid pursuant to Section 5.06 to the first day of the month
following the month in which such Mortgage Loan became a Liquidated Mortgage
Loan).
GAAP: Generally accepted accounting principles, consistently
applied, as of the date of such application.
INDEMNIFICATION AGREEMENT: The Indemnification Agreement,
dated December 18, 2002, among the Representative, the Depositor, the
Unaffiliated Seller and the Originators.
INDIRECT PARTICIPANT: Any financial institution for whom any
Direct Participant holds an interest in an Offered Certificate.
INITIAL CERTIFICATION: As defined in Section 2.06(a) hereof.
12
INITIAL CUT-OFF DATE: With respect to any Initial Mortgage
Loan, the close of business on November 30, 2002, or, if such Initial Mortgage
Loan was originated or otherwise acquired by an Originator after November 30,
2002, the date of origination or acquisition of such Initial Mortgage Loan.
INITIAL MORTGAGE LOANS: The Mortgage Loans delivered by the
Depositor on the Closing Date.
INITIAL OVERCOLLATERALIZED AMOUNT: An amount equal to 1.00% of
the Maximum Pool Principal Balance.
INSURANCE POLICIES: All insurance policies insuring any
Mortgage Loan or Mortgaged Property to the extent the Trust or the Trustee has
any interest therein.
INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to
any insurance policy covering a Mortgage Loan to the extent such proceeds are
not applied to the restoration of the related Mortgaged Property or released to
the related Mortgagor in accordance with Accepted Servicing Practices.
INTEREST REMITTANCE AMOUNT: With respect to any Distribution
Date, the sum, without duplication, of:
(i) all scheduled installments of interest due (or advanced by
the Servicer) on the Mortgage Loans during the related Due Period; plus
(ii) Compensating Interest paid by the Servicer on the related
Servicer Remittance Date; plus
(iii) the interest component of all related Substitution
Adjustments and Loan Repurchase Prices; plus
(iv) the interest component, if any, of all Insurance Proceeds
and Liquidation Proceeds received by the Servicer during the related
Due Period (in each case, net (but not to be reduced below zero) of
unreimbursed expenses incurred in connection with a liquidation or
foreclosure and unreimbursed Periodic Advances and Servicing Advances,
if any); plus
(v) the interest component of the proceeds of any termination
of the Trust Fund; plus
(vi) any Special Advance amounts transferred to the
Distribution Account pursuant to Section 5.18(b) hereof; plus
(vii) on the January 2003, February 2003, and March 2003
Distribution Dates, the Capitalized Interest Requirement for such
Distribution Date, if any; plus
(viii) on the January 2003, February 2003, and March 2003
Distribution Dates, the Pre-Funding Earnings, if any; minus
13
(xi) to the extent previously retained by the Servicer, the
Servicing Fee for the related Due Period, together with amounts in
reimbursement for Periodic Advances or Servicing Advances previously
made with respect to the Mortgage Loans and other amounts as to which
the Servicer is entitled to be reimbursed pursuant to this Agreement.
INTEREST RESERVE ACCOUNT: The Interest Reserve Account
established in accordance with Section 6.01(a) hereof and maintained by the
Trustee.
LIQUIDATED LOAN LOSS: With respect to any Servicer Remittance
Date as of the related Due Date, an amount equal to the excess of (i) the unpaid
principal balance of a Liquidated Mortgage Loan, plus accrued interest thereon
in accordance with the amortization schedule at the time applicable thereto at
the applicable Mortgage Interest Rate from the Due Date as to which interest was
last paid with respect thereto through the last day of the month in which such
Mortgage Loan became a Liquidated Mortgage Loan, over (ii) Net Liquidation
Proceeds with respect to such Liquidated Mortgage Loan.
LIQUIDATED MORTGAGE LOAN: A Mortgage Loan with respect to
which the related Mortgaged Property has been acquired, liquidated or foreclosed
and with respect to which the Servicer determines that all Liquidation Proceeds
which it expects to recover have been recovered.
LIQUIDATION EXPENSES: Without limitation, expenses incurred by
the Servicer in connection with the liquidation of any Liquidated Mortgage Loan
or property acquired in respect thereof (including, without limitation, legal
fees and expenses, committee or referee fees, and, if applicable, brokerage
commissions and conveyance taxes), any unreimbursed amount expended by the
Servicer pursuant to Sections 5.04 and 5.06 hereof in respect of the related
Mortgage Loan and any unreimbursed expenditures for real property taxes or for
property restoration or preservation of the related Mortgaged Property.
Liquidation Expenses shall not include any previously incurred expenses in
respect of an REO Mortgage Loan which have been netted against related REO
Proceeds. In no event may Liquidation Expenses with respect to a Liquidated
Mortgage Loan exceed the related Liquidation Proceeds.
LIQUIDATION PROCEEDS: The amount (other than Insurance
Proceeds) received by the Servicer in connection with (i) the taking of all or a
part of Mortgaged Property by exercise of the power of eminent domain or
condemnation, (ii) the liquidation of a defaulted Mortgage Loan through a
trustee's sale, foreclosure sale, REO Disposition or otherwise or (iii) the
liquidation of any other security for such Mortgage Loan, including, without
limitation, pledged equipment, inventory and working capital and assignments of
rights and interests made by the related mortgagor.
LOAN REPURCHASE PRICE: As defined in Section 2.06(c).
MAJORITY CERTIFICATEHOLDERS: For so long as any of the Offered
Certificates are outstanding, the Holder or Holders of Offered Certificates
evidencing Percentage Interests in excess of 51% in the aggregate, and
thereafter, the Holder or Holders of Class R Certificates evidencing Percentage
Interests in excess of 51% in the aggregate.
MASTER REMIC: As defined in Section 2.07.
14
MASTER REMIC REGULAR INTERESTS: As defined in Section 2.07.
MAXIMUM POOL PRINCIPAL BALANCE: The sum of (i) the Aggregate
Principal Balance of the Initial Mortgage Loans as of their respective Initial
Cut-Off Dates and (ii) the Original Pre-Funded Amount.
MONTHLY PAYMENT: As to any Mortgage Loan (including any REO
Mortgage Loan) and any Due Date, the payment of principal and interest due
thereon as specified for such Due Date in the related amortization schedule at
the time applicable thereto (after adjustment for any Deficient Valuations
occurring prior to such Due Date but before any adjustment to such amortization
schedule by reason of any bankruptcy, other than Deficient Valuations or similar
proceeding or any moratorium or similar waiver or grace period).
MONTHLY SERVICING FEE: As defined in Section 5.08 hereof.
MOODY'S: Xxxxx'x Investors Service, Inc., a corporation
organized and existing under Delaware law, or any successor thereto and if such
corporation no longer for any reason performs the services of a securities
rating agency, "Moody's" shall be deemed to refer to any other nationally
recognized rating agency designated by the Depositor.
MORTGAGE: The mortgage, deed of trust or other instrument
creating a first or second lien on the Mortgaged Property.
MORTGAGED PROPERTY: The underlying property or properties
securing a Mortgage Loan, consisting of a fee simple estate in such real
property.
MORTGAGE FILE: As described in Exhibit G.
MORTGAGE INTEREST RATE: As to any Mortgage Loan, the per annum
fixed rate at which interest accrues on the unpaid principal balance thereof as
set forth on the related Mortgage Note.
MORTGAGE LOAN INTEREST SHORTFALL: With respect to any
Distribution Date, as to any Mortgage Loan, the sum of (a) any Prepayment
Interest Shortfall for which no payment of Compensating Interest is paid and (b)
any Civil Relief Act Interest Shortfall in respect of such Mortgage Loan for
such Distribution Date.
MORTGAGE LOAN POOL: Those Initial Mortgage Loans listed on the
initial Mortgage Loan Schedule together with any Subsequent Mortgage Loans
listed on any subsequent Mortgage Loan Schedules.
MORTGAGE LOANS: The Initial Mortgage Loans and the Subsequent
Mortgage Loans, together with any Qualified Substitute Mortgage Loans submitted
therefor in accordance with this Agreement, as from time to time are held as a
part of the Trust Fund. When used in respect of any Distribution Date, the term
Mortgage Loans shall mean all Mortgage Loans (including those in respect of
which the Trustee has acquired the related Mortgaged Property) which have not
been repaid in full prior to the related Due Period, did not become Liquidated
Mortgage Loans prior to such related Due Period or were not repurchased or
replaced by the Unaffiliated Seller prior to such related Due Period.
15
MORTGAGE LOAN SCHEDULE: The initial schedule of Initial
Mortgage Loans as of the Initial Cut-Off Date as attached hereto as Schedule I,
which will be deemed to be modified automatically upon any replacement, sale,
substitution, liquidation, transfer or addition of any Mortgage Loan, including
the addition of a Subsequent Mortgage Loan, pursuant to the terms hereof. The
initial Mortgage Loan Schedule sets forth as to each Initial Mortgage Loan, and
any subsequent Mortgage Loan Schedule provided in connection with the Subsequent
Mortgage Loans will set forth as to each Subsequent Mortgage Loan: (i) its
identifying number and the name of the related Mortgagor; (ii) the billing
address for the related Mortgaged Property including the state and zip code;
(iii) its date of origination; (iv) the original number of months to stated
maturity; (v) the original stated maturity; (vi) the original Principal Balance;
(vii) the Principal Balance as of its Cut-Off Date; (viii) the Mortgage Interest
Rate; and (ix) the scheduled monthly payment of principal and interest.
MORTGAGE NOTE: The original, executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
MORTGAGED PROPERTY: The underlying property or properties
securing a Mortgage Loan, consisting of a fee simple interest in such real
property.
MORTGAGOR: The obligor on a Mortgage Note.
NET FORECLOSURE PROFITS: As to any Servicer Remittance Date,
the excess, if any, of (i) the aggregate Foreclosure Profits with respect to
such Servicer Remittance Date over (ii) Liquidated Loan Losses with respect to
such Servicer Remittance Date.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses and net of any unreimbursed
Periodic Advances made by the Servicer out of its own funds. For all purposes of
this Agreement, Net Liquidation Proceeds shall be allocated first to accrued and
unpaid interest on the related Mortgage Loan and then to the unpaid principal
balance thereof.
NET REO PROCEEDS: As to any REO Mortgage Loan, REO Proceeds
net of any related expenses of the Servicer.
NET WAC CAP: As of any Distribution Date, the Net Weighted
Average Mortgage Interest Rate less the product of (a) 4.00% per annum and (b) a
fraction, the numerator of which is the Class A-IO Notional Balance for that
Distribution Date and the denominator of which is the sum of (i) the Aggregate
Principal Balance of the Mortgage Loans as of the beginning of the related Due
Period and (ii) the Pre-Funding Amount, if any, immediately prior to such
Distribution Date (net of the Pre-Funding Earnings).
NET WAC CAP CARRYOVER AMOUNT: With respect to each Class of
the Capped Certificates and any Distribution Date, the sum of (a) the excess, if
any, of the Class Monthly Interest Amount for such Class, calculated at the
applicable Pass-Through Rate without regard to the Net WAC Cap, over the Class
Monthly Interest Amount for such Class for the applicable Distribution Date, (b)
any Net WAC Cap Carryover Amount remaining unpaid from prior Distribution Dates,
and (c) one month's interest on the amount in clause (b) calculated at the
applicable Pass-Through Rate without regard to the Net WAC Cap.
16
NET WEIGHTED AVERAGE MORTGAGE INTEREST RATE: With respect to
any Due Period, the weighted average Mortgage Interest Rates (weighted by
Principal Balances) of the Mortgage Loans, calculated at the opening of business
on the first day of such Due Period, less the rate at which the Servicing Fee is
then calculated, less the rate at which the Back-up Servicing Fee is then
calculated, less the rate at which the Trustee Fee is then calculated, less any
taxes imposed on any REMIC created hereunder pursuant to Section 11.15(a)
herein.
NONRECOVERABLE ADVANCES: With respect to any Mortgage Loan,
(a) any Periodic Advance previously made and not reimbursed from late
collections pursuant to Section 5.03, or (b) a Periodic Advance proposed to be
made in respect of a Mortgage Loan or REO Property either of which, in the good
faith business judgment of the Servicer, as evidenced by an Officer's
Certificate delivered to the Trustee no later than the Business Day following
such determination, would not ultimately be recoverable pursuant to Sections
5.03.
OC FLOOR: 0.50% of the Maximum Pool Principal Balance.
OFFERED CERTIFICATES: The Senior Certificates and the
Subordinate Certificates.
OFFICER'S CERTIFICATE: A certificate signed by the Chairman of
the Board, the President or a Vice President, the Treasurer, the Secretary or
one of the Assistant Treasurers or Assistant Secretaries of the Unaffiliated
Seller and/or the Servicer, or the Depositor, as required by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may,
without limitation, be counsel for the Unaffiliated Seller, the Servicer, the
Trustee, a Certificateholder or a Certificateholder's prospective transferee
(including except as otherwise provided herein, in-house counsel) reasonably
acceptable to each addressee of such opinion and experienced in matters relating
to the subject of such opinion; except that any opinion of counsel relating to
(a) the qualification of any of the REMICs described in Section 2.07 hereof as a
REMIC or (b) compliance with the REMIC Provisions must be an opinion of counsel
who (i) is in fact independent of the Unaffiliated Seller, the Servicer and the
Trustee, (ii) does not have any direct financial interest or any material
indirect financial interest in the Unaffiliated Seller or the Servicer or the
Trustee or in an Affiliate thereof, (iii) is not connected with the Unaffiliated
Seller or the Servicer or the Trustee as an officer, employee, director or
person performing similar functions and (iv) is reasonably acceptable to the
Trustee.
ORIGINAL AGGREGATE PRINCIPAL BALANCE: The Aggregate Principal
Balance of the Mortgage Loan Pool on the Closing Date, calculated as of the
Initial Cut-Off Date, which amount is equal to $340,044,679.35.
17
ORIGINAL CERTIFICATE PRINCIPAL BALANCE: As of the Startup Day
and with respect to each Class of Certificates, the amount set forth below:
Original Certificate
Class Principal Balance
----- -----------------
A $330,600,000
M-1 $21,850,000
M-2 $18,050,000
B $5,700,000
The Class A-IO, Class X and Class R Certificates do not have an Original
Certificate Principal Balance.
ORIGINAL PRE-FUNDED AMOUNT: $39,955,320.65.
ORIGINATORS: American Business Credit, Inc., HomeAmerican
Credit, Inc., d/b/a Upland Mortgage and American Business Mortgage Services,
Inc.
OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any
Distribution Date, the lesser of (x) the Excess Interest for such Distribution
Date and (y) the Specified Overcollateralization Amount for such Distribution
Date minus the Overcollateralized Amount for such Distribution Date.
OVERCOLLATERALIZATION REDUCTION AMOUNT: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount for such Distribution Date and (b) the Principal
Remittance Amount for such Distribution Date.
OVERCOLLATERALIZED AMOUNT: With respect to any Distribution
Date, the excess, if any, of (a) the Current Pool Principal Balance for that
Distribution Date, over (b) the aggregate Certificate Principal Balance of the
Offered Certificates as of such Distribution Date (after taking into account the
payment of the Principal Distribution Amount on such Distribution Date except
for any portion thereof related to any Overcollateralization Increase Amount).
OVERFUNDED INTEREST AMOUNT: With respect to each Subsequent
Transfer Date occurring in December 2002, the excess, if any, of (i) the amount
on deposit in the Capitalized Interest Account, over (ii) three-months' interest
calculated at the Adjusted Pass-Through Rate on the Pre-Funding Amount (net of
any Pre-Funding Earnings) immediately following such Subsequent Transfer Date
(disregarding any amount applied from the Pre-Funding Account to a Subsequent
Mortgage Loan that does not have a Due Date in December 2002).
With respect to each Subsequent Transfer Date occurring in
January 2003, the excess of (i) the amount on deposit in the Capitalized
Interest Account, over (ii) two-month's interest calculated at the Adjusted
Pass-Through Rate on the Pre-Funding Amount (net of any Pre-Funding Earnings)
immediately following such Subsequent Transfer Date (disregarding any amount
applied from the Pre-Funding Account to a Subsequent Mortgage Loan that does not
have a Due Date in January 2003).
18
With respect to each Subsequent Transfer Date occurring in
February 2003, the excess of (i) the amount on deposit in the Capitalized
Interest Account, over (ii) one-month's interest calculated at the Adjusted
Pass-Through Rate on the Pre-Funding Amount (net of any Pre-Funding Earnings)
immediately following such Subsequent Transfer Date (disregarding any amount
applied from the Pre-Funding Account to a Subsequent Mortgage Loan that does not
have a Due Date in February 2003).
OWNER-OCCUPIED MORTGAGED PROPERTY: A Residential Dwelling as
to which (a) the related Mortgagor represented an intent to occupy as such
Mortgagor's primary, secondary or vacation residence at the origination of the
Mortgage Loan, and (b) the Unaffiliated Seller has no actual knowledge that such
Residential Dwelling is not so occupied.
OWNERSHIP INTEREST: As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
PASS-THROUGH RATE: The Class A, Class A-IO, Class M-1, Class
M-2, and Class B Pass-Through Rate and, for the purposes of Section 2.07, the
pass-through rate for any class of interests referenced in Section 2.07.
PERCENTAGE INTEREST: With respect to any Offered Certificate,
other than a Class A-IO Certificate, the portion evidenced by such Certificate,
expressed as a percentage rounded to four decimal places, equal to a fraction
the numerator of which is the denomination represented by such Certificate and
the denominator of which is the Original Certificate Principal Balance of such
Class. With respect to a Class A-IO, Class X or Class R Certificate, the portion
evidenced thereby as stated on the face of such Certificate.
PERIODIC ADVANCE: The aggregate of the advances required to be
made by the Servicer on any Servicer Remittance Date pursuant to Section 5.18
hereof, the amount of any such advances being equal to the sum of:
(a) with respect to each Mortgage Loan that was
Delinquent as of the close of business on the last day of the Due
Period preceding the related Servicer Remittance Date, the product of
(i) the Principal Balance of such Mortgage Loan and (ii) one-twelfth of
the Mortgage Interest Rate for such Mortgage Loan net of the Servicing
Fee; and
(b) with respect to each REO Property which was acquired
during or prior to the related Due Period and as to which an REO
Disposition did not occur during the related Due Period, an amount
equal to the excess, if any, of (i) interest on the Principal Balance
of such REO Mortgage Loan at the Mortgage Interest Rate for such REO
Mortgage Loan net of the Servicing Fee, for the most recently ended Due
Period over (ii) the net income from the REO Property transferred to
the Distribution Account for such Distribution Date;
19
provided, however, that in each such case such advance has not been determined
by the Servicer to be a Nonrecoverable Advance.
PERMITTED INVESTMENTS: As used herein, Permitted Investments
shall include the following:
(i) obligations of, or guaranteed as to principal and
interest by, the United States or any agency or instrumentality thereof
when such obligations are backed by the full faith and credit of the
United States;
(ii) repurchase agreements on obligations specified in
clause (i) maturing not more than three months from the date of
acquisition thereof, provided that the unsecured obligations of the
party agreeing to repurchase such obligations are at the time rated in
one of the two highest rating categories by the Rating Agencies;
(iii) certificates of deposit, time deposits and bankers'
acceptances (which, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days) of any U.S.
depository institution or trust company, incorporated under the laws of
the United States or any state; provided, that the debt obligations of
such depository institution or trust company at the date of acquisition
thereof have been rated in one of the two highest rating categories by
the Rating Agencies;
(iv) commercial paper (having original maturities of not
more than 270 days) of any corporation incorporated under the laws of
the United States or any state thereof which on the date of acquisition
has been rated in the highest short-term rating category by the Rating
Agencies;
(v) the JPMorgan Funds U.S. Government Money Market Fund,
the JPMorgan Prime Money Market Fund and the JPMorgan Treasury Plus
Fund, so long as any such fund is rated in the highest rating category
by Xxxxx'x or S&P;
provided, that each such Permitted Investment shall be a "permitted investment"
within the meaning of Section 860G(a)(5) of the Code and that no instrument
described hereunder shall evidence either the right to receive (x) only interest
with respect to the obligations underlying such instrument or (y) both principal
and interest payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument provided a
yield to maturity at par greater than 120% of the yield to maturity at par of
the underlying obligations; provided, further, that no instrument described
hereunder may: (x) be purchased at a price greater than par if such instrument
may be prepaid or called at a price less than its purchase price prior to stated
maturity; or (y) provide any voting right or substantially equivalent interest
in the producer of such investment, whether directly or indirectly, through
conversion or any other manner or method. or be disposed of prior to its
maturity.
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PERMITTED TRANSFEREE: Any Person other than (a) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (b) a foreign government, international
organization or any agency or instrumentality of either of the foregoing, (c) an
organization (except certain farmers' cooperatives described in Section 521 of
the Code) which is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by Section 511 of the Code on unrelated business taxable income)
on any excess inclusions (as defined in Section 860E(c)(1) of the Code) with
respect to any Class R Certificate, (d) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (e) an "electing
large partnership" within the meaning Section 775 of the Code and (f) any other
Person so designated by the Trustee based upon an Opinion of Counsel to the
Trustee that the transfer of an Ownership Interest in a Class R Certificate to
such Person may cause either (i) any of the REMICs described in Section 2.07
hereof to fail to qualify as a REMIC at any time that the Offered Certificates
or Class X Certificates are outstanding or (ii) the Trust Fund or any Person
having an Ownership Interest in any Class of Certificates, other than such
Person, to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an Ownership Interest in
a Class R Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and, with
the exception of FHLMC, a majority of its board of directors is not selected by
such governmental unit.
PERSON: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, national banking association,
unincorporated organization or government or any agency or political subdivision
thereof.
PLAN: As defined in Section 4.02(n).
PREPAYMENT ASSUMPTION: A constant prepayment rate of 23% HEP
for the Offered Certificates and Class X Certificates used solely for
determining the accrual of original issue discount and market discount on the
Certificates for federal income tax purposes.
PRE-FUNDING ACCOUNT: The Pre-Funding Account established in
accordance with Section 6.01 hereof and maintained by the Trustee.
PRE-FUNDING AMOUNT: With respect to any date, the amount on
deposit in the Pre-Funding Account.
PRE-FUNDING EARNINGS: The actual investment earnings realized
on amounts deposited in the Pre-Funding Account.
PRE-FUNDING PERIOD: The period commencing on the Startup Day
and ending on the earliest to occur of (i) the date on which the Pre-Funding
Amount (net of any Pre-Funding Earnings) is less than $100,000, (ii) the date on
which any Event of Default occurs and (iii) the close of business on February
28, 2003.
PREPAYMENT INTEREST SHORTFALL: With respect to any
Distribution Date, for each Mortgage Loan that was the subject during the
related Due Period of a Principal Prepayment, an amount equal to the excess, if
any, of (a) 30 days' interest on the Principal Balance, prior to giving effect
to a principal distribution for the related Due Period, of such Mortgage Loan at
a per annum rate equal to (i) the Mortgage Interest Rate (or at such lower rate
as may be in effect for such Mortgage Loan pursuant to application of the Civil
Relief Act, any Deficient Valuation and/or any Debt Service Reduction) minus
(ii) the rate at which the Servicing Fee is calculated over (b) the amount of
interest actually remitted by the Mortgagor in connection with such Principal
Prepayment less the Servicing Fee for such Mortgage Loan in such month.
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PRINCIPAL BALANCE: As to any Mortgage Loan and any date of
determination, the outstanding principal balance of such Mortgage Loan as of
such date of determination after giving effect to Principal Prepayments received
prior to the end of the related Due Period and Deficient Valuations incurred
prior to the related Due Date. The Principal Balance of a Mortgage Loan which
becomes a Liquidated Mortgage Loan on or prior to the related Due Date shall be
zero (except for purposes of calculating the Loan Repurchase Price of such
Mortgage Loan).
PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, will be the sum of (x) the Basic Principal Distribution
Amount for such Distribution Date and (y) the Overcollateralization Increase
Amount for such Distribution Date.
PRINCIPAL PREPAYMENT: Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date.
PRINCIPAL REMITTANCE AMOUNT: With respect to any Distribution
Date will be the sum, without duplication, of:
(1) all principal in respect of the Mortgage Loans actually
collected during the related Due Period;
(2) the Principal Balance of each Mortgage Loan that either was
repurchased by the Unaffiliated Seller or purchased by the
Servicer on the related Servicer Remittance Date, to the
extent such Principal Balance is actually received by the
Trustee;
(3) any Substitution Adjustments delivered by the Unaffiliated
Seller on the related Servicer Remittance Date in connection
with a substitution of a Mortgage Loan, to the extent such
Substitution Adjustments are actually received by the Trustee;
(4) the Net Liquidation Proceeds actually collected by the
Servicer on all Mortgage Loans during the related Due Period
(to the extent such Net Liquidation Proceeds relate to
principal);
(5) on the January 2003, February 2003 or March 2003 Distribution
Dates, moneys released from the Pre-Funding Account pursuant
to Section 6.01(g);
(6) the proceeds received by the Trustee upon the exercise by the
Servicer of its option to repurchase the Mortgage Loans on or
after the Clean-up Call Date (to the extent that such proceeds
relate to principal); and
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(7) the proceeds received by the Trustee on any termination of the
Trust (to the extent such proceeds relate to principal).
PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated
December 18, 2002 relating to the Offered Certificates filed with the Commission
in connection with the Registration Statement heretofore filed or to be filed
with the Commission pursuant to Rule 424(b)(2) or 424(b)(5).
QUALIFIED APPRAISER: An appraiser, duly appointed by the
Unaffiliated Seller, who had no interest, direct or indirect, in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation is
not affected by the approval or disapproval of the Mortgage Loan, and such
appraiser and the appraisal made by such appraiser both satisfy the requirements
of Title XI of the Federal Institutions Reform, Recovery and Enforcement Act of
1989 and the regulations promulgated thereunder, all as in effect on the date
the Mortgage Loan was originated.
QUALIFIED MORTGAGE: "Qualified Mortgage" shall have the
meaning set forth from time to time in the definition thereof at Section
860G(a)(3) of the Code (or any successor statute thereto).
QUALIFIED SUBSTITUTE MORTGAGE LOAN: A mortgage loan or
mortgage loans substituted for a Deleted Mortgage Loan pursuant to Section
2.06(c) or 3.03 hereof, which (a) has or have an interest rate at least equal to
that applicable to the Deleted Mortgage Loan, (b) relates or relate to a
detached one-family residence or to the same type of Residential Dwelling or
Business Purpose Property, or any combination thereof, as the Deleted Mortgage
Loan and in each case has or have the same or a better lien priority as the
Deleted Mortgage Loan and has the same occupancy status or is an Owner Occupied
Mortgaged Property, (c) matures or mature no later than (and not more than one
year earlier than) the Deleted Mortgage Loan, (d) has or have a Loan-to-Value
Ratio at the time of such substitution no higher than the Loan-to-Value Ratio of
the Deleted Mortgage Loan, (e) has or have a Combined Loan-to-Value Ratio or
Combined Loan-to-Value Ratios at the time of such substitution no higher than
the Combined Loan-to-Value Ratio of the Deleted Mortgage Loan, (f) has or have a
Principal Balance or Principal Balances (after application of all payments
received on or prior to the date of substitution) not substantially less and not
more than the Principal Balance of the Deleted Mortgage Loan as of such date,
(g) satisfies or satisfy the criteria set forth from time to time in the
definition of "qualified replacement mortgage" at Section 860G(a)(4) of the Code
(or any successor statute thereto), and (h) complies or comply as of the date of
substitution with each representation and warranty set forth in Sections 3.01,
3.02 and 3.03 of the Unaffiliated Seller's Agreement.
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RATING AGENCY: S&P or Xxxxx'x.
RATING AGENCY CONDITION: With respect to any action, written
confirmation from the Rating Agencies that such action will not result in the
withdrawal, downgrade or qualification of the then-current rating of any of the
Offered Certificates.
RECORD DATE: With respect to the Certificates, the last
Business Day of the calendar month immediately preceding the month in which a
Distribution Date occurs.
REGULAR INTEREST: As defined in Section 2.07 herein.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC I: As described in Section 2.07 herein.
REMIC I REGULAR INTERESTS: As described in Section 2.07
herein.
REMIC I WEIGHTED AVERAGE INTEREST RATE: On any Distribution
Date, a Pass-Through Rate equal to the weighted average of the interest rates of
the Sub-REMIC Regular Interests.
REMIC II: As described in Section 2.07 herein.
REMIC II Net WAC CAP: On any Distribution Date, a Pass-Through
Rate equal to the weighted average of the interest rates on the REMIC I Regular
Interests where (a) on the first Distribution Date through the Distribution Date
in March 2003, the Pass-Through Rates on Class I-B1, Class I-B2, Class I-B3,
Class I-B4, Class I-B5, Class I-B6, Class I-B7, Class I-B8, Class I-B9 and Class
I-B10 are first reduced by 4.00% (but not to less than zero); (b) from the
Distribution Date in April 2003 through the Distribution Date in June 2003, the
Pass-Through Rates on Class I-B2, Class I-B3, Class I-B4, Class I-B5, Class
I-B6, Class I-B7, Class I-B8, Class I-B9 and Class I-B10 are first reduced by
4.00% (but not to less than zero); (c) from the Distribution Date in July 2003
through the Distribution Date in September 2003, the Pass-Through Rates on Class
I-B3, Class I-B4, Class I-B5, Class I-B6, Class I-B7, Class I-B8, Class I-B9 and
Class I-B10 are first reduced by 4.00% (but not to less than zero); (d) from the
Distribution Date in October 2003 through the Distribution Date in December
2003, the Pass-Through Rates on Class I-B4, Class I-B5, Class I-B6, Class I-B7,
Class I-B8, Class I-B9 and Class I-B10 are first reduced by 4.00% (but not to
less than zero); (e) from the Distribution Date in January 2004 through the
Distribution Date in March 2004, the Pass-Through Rates on Class I-B5, Class
I-B6, Class I-B7, Class I-B8, Class I-B9 and Class I-B10 are first reduced by
4.00% (but not to less than zero); (f) from the Distribution Date in April 2004
through the Distribution Date in June 2004, the Pass-Through Rates on Class
I-B6, Class I-B7, Class I-B8, Class I-B9 and Class I-B10 are first reduced by
4.00% (but not to less than zero); (g) from the Distribution Date in July 2004
through the Distribution Date in September 2004, the Pass-Through Rates on Class
I-B7, Class I-B8, Class I-B9 and Class I-B10 are first reduced by 4.00% (but not
to less than zero); (h) from the Distribution Date in October 2004 through the
Distribution Date in December 2004, the Pass-Through Rates on Class I-B8, Class
I-B9, and Class I-B10 are first reduced by 4.00% (but not to less than zero);
(i) from the Distribution Date in January 2005 through the Distribution Date in
March 2005, the Pass-Through Rates on Class I-B9 and Class I-B10 are first
reduced by 4.00% (but not to less than zero); and (j) from the Distribution Date
in April 2005 through the Distribution Date in June 2005, the Pass-Through Rate
on Class I-B10 is first reduced by 4.00% (but not to less than zero).
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REMIC II REGULAR INTERESTS: As described in Section 2.07
herein.
REMIC PROVISIONS: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and temporary and final regulations promulgated thereunder and
published rulings, notices and announcements, as the foregoing may be in effect
from time to time.
REMIC TRUST: The segregated pool of assets consisting of the
Trust Fund; provided, however, that the Capitalized Interest Account, the
Supplemental Interest Payment Account and the Pre-Funding Account shall not be
part of the REMIC Trust.
REO DISPOSITION: The final sale by the Servicer of a Mortgaged
Property acquired by the Servicer in foreclosure or by deed-in-lieu of
foreclosure.
REO MORTGAGE LOAN: Any Mortgage Loan which is not a Liquidated
Mortgage Loan and as to which the indebtedness evidenced by the related Mortgage
Note is discharged and the related Mortgaged Property is held as part of the
Trust Fund.
REO PROCEEDS: Proceeds received in respect of any REO Mortgage
Loan (including, without limitation, proceeds from the rental of the related
Mortgaged Property).
REO PROPERTY: A Mortgaged Property acquired by the Servicer in
the name of the Trustee on behalf of the Certificateholders through foreclosure
or deed-in-lieu of foreclosure.
REPRESENTATION LETTER: Letters to, or agreements with, the
Depository to effectuate a book entry system with respect to the Offered
Certificates registered in the Certificate Register under the nominee name of
the Depository.
REPRESENTATIVE: Credit Suisse First Boston Corporation, as the
representative underwriter for the Underwriters listed on Schedule A to the
Underwriting Agreement.
REQUEST FOR RELEASE: A request for release in substantially
the form attached as Exhibit L hereto.
REQUIRED INFORMATION: With respect to each Mortgage Loan and
any date of determination: (a) the name and address of the obligor; (b) the
aggregate Principal Balance of the Mortgage Loan as of the end of the
immediately preceding Due Period; (c) the maturity date; and (d) the Mortgage
Interest Rate as of the end of the immediately preceding Due Period; provided,
that the Servicer's obligation to furnish any portion of the Required
Information to any Person shall not require the Servicer to fail to observe any
applicable law prohibiting disclosure of information regarding the obligors.
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RESIDENTIAL DWELLING: A one- to four-family dwelling, a unit
in a planned unit development, a unit in a condominium development, a townhouse
or a manufactured housing unit which is non-mobile.
RESPONSIBLE OFFICER: When used with respect to the Trustee,
the Collateral Agent and the Back-up Servicer, any officer assigned to the
Corporate Trust Division (or any successor thereto), including any Vice
President, Assistant Vice President, Trust Officer, any Assistant Secretary or
any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and to whom, with
respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with the particular subject in each case
having direct responsibility for the administration of this Agreement. When used
with respect to the Unaffiliated Seller or the Servicer, the President or any
Vice President, Assistant Vice President, or any Secretary or Assistant
Secretary.
RETAINED INTEREST: An interest in a pool of promissory notes,
mortgage loans, or other financial assets which entitles the holder to receive
excess cash flows derived from such assets after payments to senior holders of
direct or indirect beneficial or other interests in such assets as well as
expenses and other payments accorded priority in right or payment to such
residual interest.
ROLLING THREE MONTH DELINQUENCY RATE: For any Distribution
Date, the percentage, equal to the average of the Delinquency Ratio for each of
the three (1 or 2 in the case of the first three Distribution Dates, as the case
may be) immediately preceding Due Periods.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc. or any successor thereto and if such corporation no longer for
any reason performs the services of a securities rating agency, "S&P" shall be
deemed to refer to any other nationally recognized statistical rating
organization designated by the Depositor.
SENIOR CERTIFICATES: The Class A and Class A-IO Certificates.
SENIOR ENHANCEMENT PERCENTAGE: With respect to any
Distribution Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Certificate Principal Balance of the Subordinate Certificates and (ii)
the Overcollateralized Amount (in each case after taking into account the
distributions of the Principal Distribution Amount on such Distribution Date) by
(y) the Current Pool Principal Balance for that Distribution Date.
SENIOR PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, (x) prior to the related Stepdown Date and on any
Distribution Date thereafter while a Trigger Event is in effect, 100% of the
Principal Distribution Amount and (y) on or after the related Stepdown Date,
assuming a Trigger Event is not in effect, the least of (i) the Principal
Distribution Amount, (ii) the excess of the Certificate Principal Balance of the
Class A Certificates immediately prior to the related Distribution Date over the
lesser of (a) 64.50% times the Current Pool Principal Balance for that
Distribution Date and (b) the Current Pool Principal Balance for that
Distribution Date minus the OC Floor (but not less than zero) and (iii) the
Certificate Principal Balance of the Class A Certificates immediately prior to
the related Distribution Date.
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SERVICER: American Business Credit, Inc., a Pennsylvania
corporation, or any successor appointed as herein provided.
SERVICER REMITTANCE AMOUNT: With respect to any Servicer
Remittance Date, an amount equal to the sum of (i) all collections of principal
and interest on the Mortgage Loans (including Principal Prepayments, Net REO
Proceeds and Net Liquidation Proceeds, if any) collected by the Servicer during
the related Due Period, (ii) all Periodic Advances made by the Servicer with
respect to interest payments due to be received on the Mortgage Loans on the
related Due Date and (iii) any other amounts required to be placed in the
Collection Account by the Servicer pursuant to this Agreement (including
Insurance Proceeds), but excluding the following:
(a) amounts received on particular Mortgage Loans as late
payments of interest and respecting which the Servicer has previously
made an unreimbursed Periodic Advance out of its own funds;
(b) those portions of each payment of interest on a particular
Mortgage Loan which represent the Servicing Fee;
(c) that portion of Liquidation Proceeds and REO Proceeds to
the extent of any unpaid Servicing Fee;
(d) all income from Permitted Investments that is held in the
Collection Account for the account of the Servicer;
(e) all amounts in respect of late fees, assumption fees,
prepayment fees and similar fees;
(f) certain other amounts which are reimbursable to the
Servicer, as provided in this Pooling and Servicing Agreement; and
(g) Net Foreclosure Profits.
SERVICER REMITTANCE DATE: With respect to any Distribution
Date, the 10th day of the month in which such Distribution Date occurs, or if
such 10th day is not a Business Day, the Business Day preceding such 10th day.
SERVICER REMITTANCE REPORT: As defined in Section 6.07 hereof.
27
SERVICER TERMINATION LOSS TRIGGER EVENT: With respect to any
Distribution Date, the event that occurs if the Cumulative Loss Percentage for
such Distribution Date exceeds the following percentages with respect to the
applicable Distribution Date specified below:
Distribution Date Loss Percentage
----------------- ---------------
January 2006 - December 2006 4.00% for the first month, plus an additional 1/12
of 1.75% for each month thereafter
January 2007 - December 2007 5.75% for the first month, plus an additional 1/12
of 1.50% for each month thereafter
January 2008 - December 2008 7.25% for the first month, plus an additional 1/12
of 1.00% for each month thereafter
January 2009 - December 2009 8.25% for the first month, plus an additional 1/12
of 0.25% for each month thereafter
January 2010 and thereafter 8.50%
SERVICING ADVANCES: All reasonable and customary
"out-of-pocket" costs and expenses (including legal fees) incurred in the
performance by the Servicer of its servicing obligations, including, but not
limited to, the cost and expenses relating to (a) the preservation, restoration,
inspection and protection of the Mortgaged Property, (b) any enforcement or
judicial proceedings, including foreclosures, (c) the management and liquidation
of the REO Property, including reasonable fees paid to any independent
contractor in connection therewith, (d) compliance with the obligations under
Section 5.22, all of which reasonable and customary out-of-pocket costs and
expenses are reimbursable to the Servicer to the extent provided in Sections
5.03 and 5.22.
SERVICING COMPENSATION: The Servicing Fee and other amounts to
which the Servicer is entitled pursuant to Section 5.08.
SERVICING FEE: As to each Mortgage Loan, the annual fee
payable to the Servicer, which is calculated as an amount equal to the product
of (a) 0.50% per annum, and (b) the Principal Balance thereof (or, in the case
of any successor Servicer, such other amount as the Trustee and such successor
may agree upon in writing; provided, however, that the rate at which such amount
is calculated shall not exceed 0.50% per annum unless the Rating Agency
Condition is satisfied; provided, further, however, that if the Back-up Servicer
is acting as successor Servicer in no event shall the Servicing Fee be less than
the amount paid to the initial Servicer hereunder). Such fee shall be calculated
and payable monthly only from the amounts received in respect of interest on
such Mortgage Loan and shall be computed on the basis of the same principal
amount and for the period respecting which any related interest payment on a
Mortgage Loan is computed. The Servicing Fee includes any servicing fees owed or
payable to any Subservicer.
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SERVICING OFFICER: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee and the Certificateholders by the Servicer on the Closing Date, as
such list may from time to time be amended.
SPECIAL ADVANCE: As defined in Section 5.18(b) hereof.
SPECIFIED OVERCOLLATERALIZATION AMOUNT: With respect to any
Distribution Date, (i) prior to the Stepdown Date 5.75% of the Maximum Pool
Principal Balance or (ii) on or after the Stepdown Date 11.50% of the Current
Pool Principal Balance for that Distribution Date; provided, that the Specified
Overcollateralization Amount shall never be less than the OC Floor.
STARTUP DAY: The day designated as such pursuant to Section
2.07(e) hereof.
STEPDOWN DATE: The earlier to occur of (i) the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A
Certificates has been reduced to zero and (ii) the later to occur of (a) the
Distribution Date in January 2006 and (b) the first Distribution Date on which
the Certificate Principal Balance of the Class A Certificates (after giving
effect to the distribution of the Principal Remittance Amount on such
Distribution Date) is less than or equal to 64.50% of the Current Pool Principal
Balance for that Distribution Date.
SUB-REMIC: As described in Section 2.07 herein.
SUB-REMIC REGULAR INTERESTS: As described in Section 2.07
herein.
SUBORDINATE CERTIFICATES: The Class M-1, Class M-2 and Class B
Certificates.
SUBSERVICERS: HomeAmerican Credit, Inc., d/b/a Upland
Mortgage, a Pennsylvania corporation, or its successor in interest and American
Business Mortgage Services, Inc., a New Jersey corporation, or its successor in
interest.
SUBSEQUENT CUT-OFF DATE: With respect to any Subsequent
Mortgage Loan, the date specified in the Addition Notice delivered in connection
therewith, which date shall be the close of business on the last day of the
month immediately preceding the month in which such Subsequent Mortgage Loan
will be conveyed to the Trust or, if such Subsequent Mortgage Loan was
originated, or otherwise required by an Originator after such day, the date of
origination or acquisition of such Mortgage Loan.
SUBSEQUENT MORTGAGE LOANS: The Mortgage Loans transferred and
assigned to the Trust pursuant to Section 2.03 hereof.
SUBSEQUENT TRANSFER: The transfer and assignment by the
Depositor to the Trust of the Subsequent Mortgage Loans pursuant to the terms
hereof.
29
SUBSEQUENT TRANSFER DATE: The Business Day on which a
Subsequent Transfer occurs.
SUBSERVICING AGREEMENT: The agreement between the Servicer and
the Subservicers relating to subservicing and/or administration of certain
Mortgage Loans as provided in Section 5.13, a copy of which shall be delivered,
along with any modifications thereto, to the Trustee.
SUBSTITUTION ADJUSTMENT: As to any date on which a
substitution occurs pursuant to Sections 2.06 or 3.03 hereof, the amount (if
any) by which the aggregate unpaid principal balance (after application of
principal payments received on or before the date of substitution) of any
Qualified Substitute Mortgage Loans as of the date of substitution, are less
than the aggregate of the Principal Balances of the related Deleted Mortgage
Loans together with 30 days' interest thereon at the Mortgage Interest Rate.
SUPPLEMENTAL INTEREST PAYMENT ACCOUNT: The Eligible Account
established and maintained in accordance to Section 6.10.
SUPPLEMENTAL INTEREST PAYMENT AMOUNT AVAILABLE: The amount, if
any, on deposit in the Supplemental Interest Payment Account on any Distribution
Date.
SUPPLEMENTAL INTEREST RIGHT: The right of the Holders of the
Capped Certificates to receive Net WAC Cap Carryover Amounts in accordance with
Section 6.10.
SUPPLEMENTAL INTEREST TRUST: The trust established in
accordance with Section 6.10 to hold the Supplemental Interest Payment Account.
The Supplemental Interest Trust will not be an asset of any REMIC.
TAX MATTERS PERSON: The Person or Persons appointed pursuant
to Section 11.15 from time to time to act as the "tax matters person" (within
the meaning of the REMIC Provisions) for each of the REMICs created hereunder.
TAX RETURN: The federal income tax return on Internal Revenue
Service Form 1066, "U.S. Real Estate Mortgage Investment Conduit (REMIC) Income
Tax Return," including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of each REMIC created hereunder due to its classification
as a REMIC under the REMIC Provisions, together with any and all other
information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provision of federal, state
or local tax laws.
TRANSFER: Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
TRANSFER AFFIDAVIT AND AGREEMENT: As defined in Section
4.02(l)(ii).
TRANSFEREE: Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
30
TRANSFEROR: Any Person who is disposing by Transfer any
Ownership Interest in a Certificate.
TRIGGER EVENT: Either a Delinquency Trigger Event or
Cumulative Loss Trigger Event.
TRUST: ABFS Mortgage Loan Trust 2002-4, the express trust
created hereunder in Section 2.01(a).
TRUSTEE: JPMorgan Chase Bank, a New York banking corporation,
or its successor-in-interest, or any successor trustee appointed as herein
provided.
TRUSTEE FEE: As to any Distribution Date, the fee payable to
the Trustee in respect of its services as Trustee that accrues at a monthly rate
equal to one-twelfth of 0.00625% on the Principal Balance of each Mortgage Loan
as of the immediately preceding Due Date.
TRUSTEE'S MORTGAGE FILE: The documents delivered to the
Trustee or its designated agent pursuant to Section 2.05.
TRUSTEE'S REMITTANCE REPORT: As defined in Section 6.07.
TRUST FUND: The segregated pool of assets subject hereto,
constituting the trust created hereby and to be administered hereunder,
consisting of: (i) such Mortgage Loans as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all principal collected and interest due and accruing thereon after the related
Cut-Off Date, and any proceeds thereof; (ii) any REO Property, together with all
collections thereon and proceeds thereof; (iii) the Trustee's rights with
respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof; any other
security for such Mortgage Loan, including, without limitation, pledged
equipment, inventory and working capital and assignments of rights and interests
made by the related mortgagor; (v) the rights and remedies of the Trustee
against any Person making any representation or warranty to the Trustee
hereunder, to the extent provided herein; (vi) all rights of the Depositor under
the Unaffiliated Seller's Agreement; (vii) each Account and such assets that are
deposited therein from time to time and any investments thereof, together with
any and all income, proceeds and payments with respect thereto; and (viii) all
proceeds of the foregoing.
UNAFFILIATED SELLER: ABFS 2002-4, Inc.
UNAFFILIATED SELLER'S AGREEMENT: The Unaffiliated Seller's
Agreement, dated as of the date hereof, among the Unaffiliated Seller, the
Originators and the Depositor relating to the sale of the Mortgage Loans from
the Originators to the Unaffiliated Seller and from the Unaffiliated Seller to
the Depositor.
UNDERWRITERS: The Representative and Bear, Xxxxxxx & Co., Inc.
UNDERWRITING AGREEMENT: The Underwriting Agreement, dated as
of December 18, 2002 between the Depositor and the Xxxxxxxxxxxxxx.
00
XXXXXX XXXXXX PERSON: A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States, any state thereof or the District of
Columbia, an estate whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States or a trust if a court within the United States can exercise
primary jurisdiction over its administration and at least one United States
fiduciary has the authority to control all substantial decisions of the trust.
WAC EXCESS: The sum of the Net WAC Cap Carryover Amounts
allocable to each of the Capped Certificates.
Section 1.02 Provisions of General Application. (a) All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP.
(b) The terms defined in this Article include the plural as
well as the singular.
(c) The words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole. All references to
Articles and Sections shall be deemed to refer to Articles and Sections of this
Agreement.
(d) Any reference to statutes are to be construed as including
all statutory provisions consolidating, amending or replacing the statute to
which reference is made and all regulations promulgated pursuant to such
statutes.
(e) All calculations of interest (other than with respect to
the Mortgage Loans) provided for herein shall be made on the basis of a 360-day
year consisting of twelve 30-day months. All calculations of interest with
respect to any Mortgage Loan provided for herein shall be made in accordance
with the terms of the related Mortgage Note and Mortgage or, if such documents
do not specify the basis upon which interest accrues thereon, on the basis of a
360-day year consisting of twelve 30-day months, to the extent permitted by
applicable law.
(f) Any Mortgage Loan payment is deemed to be received on the
date such payment is actually received by the Servicer; provided, however, that
for purposes of calculating distributions on the Certificates prepayments with
respect to any Mortgage Loan are deemed to be received on the date they are
applied in accordance with Accepted Servicing Practices consistent with the
terms of the related Mortgage Note and Mortgage to reduce the outstanding
principal balance of such Mortgage Loan on which interest accrues.
Section 1.03 Business Day Certificate. On the Closing Date
(with respect to the calendar year 2002) and thereafter, within 15 days prior to
the end of each calendar year while this Agreement remains in effect (with
respect to the succeeding calendar years), the Servicer shall provide to the
Trustee and the Depositor a certificate of a Servicing Officer specifying the
days on which banking institutions in the State of Pennsylvania are authorized
or obligated by law, executive order or governmental decree to be closed.
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ARTICLE II
ESTABLISHMENT OF THE TRUST
SALE AND CONVEYANCE OF THE TRUST FUND
Section 2.01 Establishment of the Trust. (a) The Depositor
does hereby establish, pursuant to the further provisions of this Agreement and
the laws of the State of New York, an express trust to be known, for
convenience, as "ABFS Mortgage Loan Trust 2002-4" and does hereby appoint
JPMorgan Chase Bank as Trustee in accordance with the provisions of this
Agreement.
(b) The Trust may perform the following permitted activities:
(i) hold receivables transferred from the Unaffiliated Seller
and other passive assets of the Trust, which assets cannot be contrary
to the status of the Trust as a qualified special purpose entity under
existing accounting literature, including passive derivative financial
instruments that pertain to beneficial interests issued or sold to
parties other than the Unaffiliated Seller, its affiliates or agents;
(ii) issue Certificates and other interests in the Trust;
(iii) receive collections and make payments on such
Certificates and interests in accordance with the terms of this
Agreement; and
(iv) engage in other activities that are necessary or
incidental to accomplish these limited purposes, which activities
cannot be contrary to the status of the Trust as a qualified special
purpose entity under existing accounting literature.
Section 2.02 Purchase and Sale of Initial Mortgage Loans. The
Depositor does hereby sell, transfer, assign, set over and convey to the
Trustee, on behalf of the Trust, without recourse but subject to the terms and
provisions of this Agreement, all of the right, title and interest of the
Depositor in and to the Initial Mortgage Loans, including the outstanding
principal as of and interest due and accruing after the Initial Cut-Off Date on
such Mortgage Loans, and all other assets included or to be included in the
Trust Fund for the benefit of the Certificateholders. In connection with such
transfer and assignment, and pursuant to Section 2.07 of the Unaffiliated
Seller's Agreement, the Depositor does hereby also irrevocably transfer, assign,
set over and otherwise convey to the Trustee, on behalf of the Trust, all of its
rights under the Unaffiliated Seller's Agreement, including, without limitation,
its right to exercise the remedies created by Sections 2.06 and 3.05 of the
Unaffiliated Seller's Agreement for defective documentation and for breaches of
representations and warranties, agreements and covenants of the Unaffiliated
Seller and the Originators contained in Sections 3.01, 3.02 and 3.03 of the
Unaffiliated Seller's Agreement.
Section 2.03 Purchase and Sale of Subsequent Mortgage Loans.
(a) Subject to the satisfaction of the conditions set forth in paragraph (b)
below, in consideration of the Trustee's delivery on the related Subsequent
Transfer Dates upon the order of the Depositor of all or a portion of the
balance of funds in the Pre-Funding Account (net of the Pre-Funding Earnings),
the Depositor shall on any Subsequent Transfer Date sell, transfer, assign, set
over and convey to the Trustee without recourse but subject to terms and
provisions of this Agreement, all of the right, title and interest of the
Depositor in and to the Subsequent Mortgage Loans, including the outstanding
principal of and interest due on such Subsequent Mortgage Loans, and all other
assets included or to be included in the Trust Fund for the benefit of the
Certificateholders. In connection with such transfer and assignment, and
pursuant to Section 2.07 of the Unaffiliated Seller's Agreement, the Depositor
does hereby also irrevocably transfer, assign, set over and otherwise convey to
the Trustee, for the benefit of the Certificateholders, all of its rights under
the Unaffiliated Seller's Agreement, including, without limitation, its right to
exercise the remedies arising under Sections 2.06 and 3.05 of the Unaffiliated
Seller's Agreement for defective documentation and for breaches of
representations and warranties, agreements and covenants of the Unaffiliated
Seller contained in Sections 3.01, 3.02 and 3.03 of the Unaffiliated Seller's
Agreement.
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The amount released from the Pre-Funding Account with respect
to a transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%)
of the aggregate Principal Balance of the Subsequent Mortgage Loans so
transferred as of the related Subsequent Cut-Off Date.
(b) The Subsequent Mortgage Loans and the other property and
rights related thereto described in paragraph (a) above shall be transferred by
the Depositor to the Trust only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Transfer Date:
(i) the Unaffiliated Seller shall have provided the Trustee
and the Rating Agencies with a timely Addition Notice, which shall
include a Mortgage Loan Schedule, listing the Subsequent Mortgage Loans
and shall provide any other information reasonably requested by any of
the foregoing with respect to the Subsequent Mortgage Loans or required
by this Agreement;
(ii) the Unaffiliated Seller shall have deposited in the
Collection Account all collections of (x) principal in respect of the
Subsequent Mortgage Loans received after the related Subsequent Cut-Off
Date and (y) interest due on the Subsequent Mortgage Loans after the
related Subsequent Cut-Off Date;
(iii) as of each Subsequent Transfer Date, the Depositor was
not insolvent nor will be made insolvent by such transfer nor is the
Depositor aware of any pending insolvency;
(iv) such addition will not result in a material adverse tax
consequence to the Trust or the Holders of the Certificates;
(v) the Pre-Funding Period shall not have terminated;
(vi) the Unaffiliated Seller shall have delivered to the
Trustee an Officer's Certificate confirming the satisfaction of each
condition precedent specified in this paragraph (b) and that the
Subsequent Mortgage Loans comply with the provisions of this Section
2.03 and the terms of the Unaffiliated Seller's Agreement, including
each of the representations and warranties made with respect thereto;
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(vii) there shall have been delivered to the Rating Agencies
and the Trustee, Independent Opinions of Counsel with respect to the
transfer of the Subsequent Mortgage Loans substantially in the form of
the Opinions of Counsel delivered to the Trustee on the Startup Day
(bankruptcy, corporate and tax opinions); and
(viii) the Originators, the Unaffiliated Seller and the
Depositor shall have delivered to the Trustee an executed copy of a
Subsequent Transfer Agreement, substantially in the form of Exhibit T
hereto.
(c) The obligation of the Trust to purchase the Subsequent
Mortgage Loans on a Subsequent Transfer Date is subject to the requirements in
Section 2.02 of the Unaffiliated Seller's Agreement.
(d) In connection with the transfer and assignment of the
Subsequent Mortgage Loans, the Depositor shall satisfy the document delivery
requirements set forth in Section 2.05.
(e) On each Subsequent Transfer Date upon written instruction
from the Unaffiliated Seller, the Trustee shall withdraw from the Capitalized
Interest Account and pay to the Unaffiliated Seller on such Subsequent Transfer
Date the Overfunded Interest Amount for such Subsequent Transfer Date, as
calculated by the Servicer with the cooperation of the Unaffiliated Seller.
(f) For any Subsequent Mortgage Loan that has a first Due Date
that occurs later than the last day of the Due Period in which the Subsequent
Mortgage Loan was sold to the Trust, on the Servicer Remittance Date following
such Subsequent Transfer Date, the Servicer will deposit into the Distribution
Account a Special Advance in the amount of 30 days' interest at the Mortgage
Interest Rate, net of the Servicing Fee, for the month in which the Subsequent
Transfer Date occurs and any month thereafter until, but not including, the
month in which the first Due Date occurs.
Section 2.04 Possession of Mortgage Files; Access to Mortgage
Files. (a) Upon the issuance of the Certificates, the ownership of each Mortgage
Note, the Mortgage and the contents of the related Mortgage File related to each
Initial Mortgage Loan is vested, and on each Subsequent Transfer Date the
ownership of each Mortgage Note, the Mortgage and the contents of the related
Mortgage File related to each Subsequent Mortgage Loan will be vested in the
Trustee for the benefit of the Certificateholders.
(b) Pursuant to Section 2.05 of the Unaffiliated Seller's
Agreement, the Depositor has delivered or caused to be delivered the Trustee's
Mortgage File related to each Mortgage Loan to the Trustee.
(c) The Collateral Agent, on behalf of the Trustee, will be
the custodian or may, with the consent of the Servicer, enter into a custodial
agreement pursuant to which the Trustee will appoint a custodian to hold the
Mortgage Files in trust for the benefit of all present and future
Certificateholders; provided, however, that the custodian so appointed shall
satisfy the eligibility requirements for the Collateral Agent as described in
Section 10.06 hereof, shall in no event be the Depositor or the Servicer or any
Person known to a Responsible Officer of the Trustee to be an Affiliate of the
Depositor or the Servicer and shall be approved by the Servicer.
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(d) The Collateral Agent shall afford the Depositor, the
Servicer and the Back-up Servicer reasonable access to all records and
documentation regarding the Mortgage Loans relating to this Agreement, such
access being afforded upon reasonable request and during normal business hours
at the offices of the Collateral Agent at customary charges.
Section 2.05 Delivery of Mortgage Loan Documents. (a) In
connection with the transfer and assignment of the Mortgage Loans, the Depositor
does hereby with respect to the Initial Mortgage Loans, and will on or before
the Subsequent Transfer Date with respect to Subsequent Mortgage Loans, deliver
or cause to be delivered to the Collateral Agent, on behalf of the Trustee the
following documents or instruments with respect to each Mortgage Loan so
transferred or assigned:
(i) the original Mortgage Note, endorsed without recourse in
blank by the related Originator, including all intervening endorsements
showing a complete chain of endorsement;
(ii) the related Mortgage with evidence of recording indicated
thereon or a copy thereof certified by the applicable recording office;
(iii) the recorded Assignment of Mortgage, or copy thereof
certified by the applicable recording office, if any, showing a
complete chain of assignment from the original mortgagee/secured party
of the related Mortgage Loan to the related Originator (which
assignment may, at such Originator's option, be combined with the
assignment referred to in subpart (iv) hereof);
(iv) an Assignment of Mortgage in recordable form (which, if
acceptable for recording in the relevant jurisdiction, may be included
in a blanket assignment or assignments) of each Mortgage from the
related Originator to the Trustee;
(v) originals of all assumption, modification and substitution
agreements in those instances where the terms or provisions of a
Mortgage or Mortgage Note have been modified or such Mortgage or
Mortgage Note has been assumed; and
(vi) an original title insurance policy (or (A) a copy of the
title insurance policy, or (B) a binder thereof or copy of such binder
together with a certificate from the related Originator that the
original Mortgage has been delivered to the title insurance company
that issued such binder for recordation).
In instances where the original recorded Mortgage and any
original recorded Assignment of Mortgage thereof pursuant to clause (iii) above
cannot be delivered by the Depositor to the Collateral Agent on behalf of the
Trustee prior to or concurrently with the execution and delivery of this
Agreement (or, with respect to Subsequent Mortgage Loans, prior to or on the
Subsequent Transfer Date), due to a delay in connection with recording, the
Depositor may:
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(x) In lieu of delivering such original recorded Mortgage,
deliver to the Collateral Agent on behalf of the Trustee a copy thereof
provided that the related Originator certifies that the original
Mortgage has been delivered to a title insurance company for
recordation after receipt of its policy of title insurance or binder
therefor; and
(y) In lieu of delivering the original recorded Assignment of
Mortgage, deliver to the Collateral Agent on behalf of the Trustee a
copy of the Assignment of Mortgage certified by the related Originator.
The Trustee shall promptly upon receipt thereof, with respect
to each Mortgage Note described in (i) above and each Assignment of Mortgage
described in (iv) above, endorse such Mortgage Note and Assignment of Mortgage
as follows: "JPMorgan Chase Bank, as Trustee under the Pooling and Servicing
Agreement dated as of December 1, 2002, ABFS Mortgage Loan Trust 2002-4."
As promptly as practicable, but in any event within thirty
(30) days from the Closing Date, or the Subsequent Transfer Date, as applicable,
the related Originator shall cause to be recorded, at the related Originator's
expense, in the appropriate public office for real property records, the
Assignments of Mortgages to the Trustee.
All original documents relating to the Mortgage Loans which
are not delivered to the Trustee, as permitted by Section 2.05(a) of the
Unaffiliated Seller's Agreement and this Section 2.05(a), are and shall be held
by the related Originator, the Unaffiliated Seller or the Servicer in trust for
the benefit of the Trustee on behalf of the Certificateholders.
(b) Within thirty (30) days following delivery of the Mortgage
Files to the Collateral Agent on behalf of the Trustee, the Collateral Agent
will review each Mortgage File to ascertain that all required documents set
forth in Section 2.05(a) (other than clause (v) thereof) have been executed and
received, and that such documents relate to the Mortgage Loans identified on the
Mortgage Loan Schedule, and in so doing the Trustee may rely on the purported
due execution and genuineness of any signature thereon. If within such 30-day
period (or, with respect to any Qualified Substitute Mortgage Loan, within
thirty (30) days after the assignment thereof) the Collateral Agent on behalf of
the Trustee finds any document constituting a part of a Mortgage File not to
have been executed or received or to be unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule, the Collateral Agent shall promptly
notify the Servicer, the Back-up Servicer and the Trustee, and the Servicer
shall have a period of sixty (60) days after such notice within which to correct
or cure any such defect. Each original recorded Assignment of Mortgage shall be
delivered to the Trustee within ten (10) days following the date on which it is
returned to the Servicer by the office with which such Assignment of Mortgage
was filed for recording and within ten (10) days following receipt by the
Trustee, the Trustee shall review such Assignment of Mortgage to confirm the
information specified above with respect to the documents constituting the
Mortgage File. Upon receipt by the Trustee of the recorded assignment such
recorded assignment shall become part of the Mortgage File. The Trustee shall
notify the Servicer of any defect in such assignment based on such review. The
Servicer shall have a period of 60 days following such notice to correct or cure
such defect. In the event that the Servicer fails to record an Assignment of
Mortgage as herein provided the Trustee shall, at the Servicer's expense, use
reasonable efforts to prepare and, if required hereunder, file such assignments
for recordation in the appropriate real property or other records and the
Servicer hereby appoints the Collateral Agent, on behalf of the Trustee as its
attorney-in-fact with full power and authority acting in its stead for the
purpose of such preparation, execution and filing.
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(c) It is intended that the conveyance of the Mortgage Loans
and other property by the Depositor to the Trustee as provided in this Section
2.05 and Section 2.02 be, and be construed as, a sale of the Mortgage Loans and
such other property by the Depositor to the Trustee for the benefit of the
Certificateholders. It is, further, not intended that such conveyance be deemed
a pledge of the Mortgage Loans or such other property by the Depositor to the
Trustee to secure a debt or other obligation of the Depositor. However, in the
event that the Mortgage Loans or any of such other property are held to be
property of the Depositor, or if for any reason this Agreement is held or deemed
to create a security interest in the Mortgage Loans or any of such other
property, then it is intended that: (i) this Agreement shall also be deemed to
be a security agreement within the meaning of the Uniform Commercial Code; (ii)
the conveyance provided for in this Section shall be deemed to be a grant by the
Depositor to the Trustee of a security interest in all of the Depositor's right,
title and interest in and to the Mortgage Loans, the Trust Fund and such other
property and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including, without limitation, all amounts from time to time held or
invested in the Distribution Account, whether in the form of cash, instruments,
securities or other property; (iii) the possession by the Trustee or its agent
of the Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to the Uniform Commercial Code; and (iv) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law. The Depositor and the Trustee
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, the Trust Fund or any of such other property,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of this Agreement.
(d) Without diminution of the requirements of Sections 2.04(c)
and this Section 2.05, all original documents relating to the Mortgage Loans
that are not delivered to the Trustee, are and shall be held by the Servicer in
trust for the benefit of the Trustee on behalf of the Certificateholders. In the
event that any such original document is required pursuant to the terms of this
Section 2.05 to be a part of a Mortgage File, such document shall be delivered
promptly to the Trustee pursuant to the Unaffiliated Seller's Agreement. In
acting as custodian of any such original document, the Servicer agrees further
that it does not and will not have or assert any beneficial ownership interest
in the Mortgage Loans or the Mortgage Files. Promptly upon the Depositor's and
the Trust's acquisition thereof and the Servicer's receipt thereof, the Servicer
on behalf of the Trust shall xxxx conspicuously each original document not
delivered to the Trustee, and the Unaffiliated Seller's master data processing
records evidencing each Mortgage Loan with a legend, acceptable to the Trustee,
evidencing that the Trust has purchased the Mortgage Loans and all right and
title thereto and interest therein pursuant to the Unaffiliated Seller's
Agreement and this Agreement.
38
Section 2.06 Acceptance by Trustee of the Trust Fund; Certain
Substitutions; Certification by Trustee. (a) The Trustee agrees to execute and
deliver to the Depositor, the Back-up Servicer, the Servicer and the
Unaffiliated Seller on or prior to the Closing Date an acknowledgement of
receipt of, in the form attached as Exhibit S hereto, and, on or prior to the
Closing Date or any Subsequent Transfer Date, with respect to each Mortgage Loan
transferred on such date, the original Mortgage Note (with any exceptions
noted), and declares that it will hold or cause the Collateral Agent, on its
behalf to hold such documents and any amendments, replacements or supplements
thereto, as well as any other assets included in the definition of Trust Fund
and delivered to the Trustee or the Collateral Agent on its behalf, as Trustee
in trust upon and subject to the conditions set forth herein for the benefit of
the Certificateholders. The Collateral Agent agrees, for the benefit of the
Certificateholders, to review (or cause to be reviewed) each Trustee's Mortgage
File within thirty (30) days after the Closing Date (with respect to the Initial
Mortgage Loans), within thirty (30) days after receipt by the Collateral Agent,
on behalf of the Trustee, thereof (with respect to Qualified Substitute Mortgage
Loans) or any Subsequent Transfer Date (with respect to the Subsequent Mortgage
Loans), as applicable, and to deliver to the Unaffiliated Seller, the Servicer,
the Back-up Servicer and the Depositor a certification in the form attached
hereto as Exhibit J (the "Initial Certification") certifying that, as to each
Mortgage Loan listed in the related Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), and unless otherwise noted,
(i) all documents required to be delivered to it pursuant to Section 2.05 hereof
(other than the items listed in clause (a)(v) thereof) are in its possession,
(ii) each such document has been reviewed by it and has not been mutilated,
damaged, torn or otherwise physically altered (handwritten additions, changes or
corrections shall not constitute physical alteration if initialed by the
Mortgagor), appears regular on its face and relates to such Mortgage Loan, and
(iii) based on its examination and only as to the foregoing documents, the
information set forth on the Mortgage Loan Schedule as to the information set
forth in (i), (ii), (v) and (vi) of the definition of "Mortgage Loan Schedule"
set forth herein accurately reflects the information set forth in the Trustee's
Mortgage File delivered on such date. The Collateral Agent, on behalf of the
Trustee shall be under no duty or obligation to inspect, review or examine any
such documents, instruments, certificates or other papers to determine that they
are genuine, enforceable, or appropriate for the represented purpose or that
they are other than what they purport to be on their face.
(b) Within ninety (90) days of the Closing Date, with respect
to the Initial Mortgage Loans, and within ninety (90) days of any Subsequent
Transfer Date, with respect to the Subsequent Mortgage Loans transferred on such
date; the Trustee shall deliver (or cause to be delivered) to the Servicer, the
Back-up Servicer, the Unaffiliated Seller, the Depositor and the Rating Agencies
a final certification in the form attached hereto as Exhibit K (the "Final
Certification") certifying that, as to each Mortgage Loan listed in the related
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as not covered by
such certification), and unless otherwise noted, (i) all documents required to
be delivered to it pursuant to Section 2.05 (other than the items listed in
clause (a)(v) thereof) are in its possession, (ii) each such document has been
reviewed by it and has not been mutilated, damaged, torn or otherwise physically
altered (handwritten additions, changes or corrections shall not constitute
physical alteration if initialed by the Mortgagor), appears regular on its face
and relates to such Mortgage Loan, and (iii) based on its examination and only
as to the foregoing documents, the information set forth in (i), (ii), (v) and
(vi) of the definition of "Mortgage Loan Schedule" set forth herein accurately
reflects the information set forth in the Trustee's Mortgage File delivered on
such date.
39
(c) If the Collateral Agent on behalf of the Trustee during
the process of reviewing the Trustee's Mortgage Files finds any document
constituting a part of a Trustee's Mortgage File which is not executed, has not
been received, is unrelated to the Mortgage Loan identified in the related
Mortgage Loan Schedule, or does not conform to the requirements of Section 2.05
or the description thereof as set forth in the related Mortgage Loan Schedule,
the Trustee shall promptly so notify the Servicer, the Back-up Servicer and the
Unaffiliated Seller. In performing any such review, the Collateral Agent on
behalf of the Trustee may conclusively rely on the Unaffiliated Seller as to the
purported genuineness of any such document and any signature thereon. It is
understood that the scope of the Collateral Agent or the Trustee's review of the
Mortgage Files is limited solely to confirming that the documents listed in
Section 2.05 (other than those listed in clause (v) thereof) have been executed
and received and relate to the Mortgage Files identified in the related Mortgage
Loan Schedule. The Collateral Agent on behalf of the Trustee shall have no
responsibility for determining whether any document is valid and binding,
whether the text of any assignment or endorsement is in proper or recordable
form, whether any document has been recorded in accordance with the requirements
of any applicable jurisdiction, or whether a blanket assignment is permitted in
any applicable jurisdiction. Pursuant to the Unaffiliated Seller's Agreement,
the Unaffiliated Seller and the Originators have agreed to use reasonable
efforts to cause to be remedied a material defect in a document constituting
part of a Mortgage File of which it is so notified by the Collateral Agent or
the Trustee. If, however, within sixty (60) days after the Collateral Agent or
the Trustee's notice to it respecting such defect the Unaffiliated Seller has
not caused to be remedied the defect and the defect materially and adversely
affects the value of, or the interest of the Certificateholders in the related
Mortgage Loan, the Unaffiliated Seller and the Originators will be obligated,
pursuant to the Unaffiliated Seller's Agreement, to either (i) substitute in
lieu of such Mortgage Loan a Qualified Substitute Mortgage Loan in the manner
and subject to the conditions set forth in Section 3.03 or (ii) purchase such
Mortgage Loan at a purchase price equal to the Principal Balance of such
Mortgage Loan as of the date of purchase, plus all accrued and unpaid interest
on such Principal Balance computed at the Mortgage Interest Rate, net of the
Servicing Fee if the Unaffiliated Seller or an Originator, as applicable, is the
Servicer, plus the amount of any unreimbursed Servicing Advances made by the
Servicer with respect to such Mortgage Loan, which purchase price shall be
deposited in the Collection Account on the next succeeding Servicer Remittance
Date, after deducting therefrom any amounts received in respect of such
repurchased Mortgage Loan or Loans and being held in the Collection Account for
future distribution to the extent such amounts have not yet been applied to
principal or interest on such Mortgage Loan (the "Loan Repurchase Price"). For
purposes of calculating the Interest Remittance Amount and the Principal
Remittance Amount, any Loan Repurchase Price or Substitution Adjustment that is
paid shall be deemed deposited in the Distribution Account in the Due Period
preceding such Servicer Remittance Date.
40
(d) Upon receipt by the Trustee of a certification of a
Servicing Officer of such substitution or purchase and, in the case of a
substitution, upon receipt of the related Trustee's Mortgage File, and the
deposit of the amounts described above in the Collection Account (which
certification shall be in the form of Exhibit L hereto), the Trustee shall
release to the Servicer for release or cause the Collateral Agent to release to
the Unaffiliated Seller the related Trustee's Mortgage File and shall execute,
without recourse, and deliver such instruments of transfer furnished by the
Unaffiliated Seller as may be necessary to transfer such Mortgage Loan to the
Unaffiliated Seller. The Trustee shall notify the Rating Agencies if the
Unaffiliated Seller fails to repurchase or substitute for a Mortgage Loan in
accordance with the foregoing.
Section 2.07 Designations under REMIC Provisions; Designation
of Startup Day. (a) The Sub-REMIC will consist of all of the assets of the Trust
Fund (other than the Capitalized Interest Account, Supplemental Interest Payment
Account and the Pre-Funding Account) and will be evidenced by the Class S-1
Interest, Class S-2 Interest, Class S-3 Interest and Class S-4 Interest
(collectively, the Sub-REMIC Regular Interests) which will be uncertificated and
will represent the "regular interests" in the Sub-REMIC. REMIC I will consist of
the Sub-REMIC Regular Interests and will be evidenced by the Class I-A Interest,
the Class I-B1 Interest, the Class I-B2 Interest, the Class I-B3 Interest, the
Class I-B4 Interest, the Class I-B5 Interest, the Class I-B6 Interest, the Class
I-B7 Interest, the Class I-B8 Interest, the Class I-B9 Interest, the Class I-B10
Interest, the Class I-N1 Interest, the Class I-N2 Interest and the Class I-N3
Interest (collectively, the "REMIC I Regular Interests") which will be
uncertificated and will represent the "regular interests" in REMIC I. REMIC II
will consist of the REMIC I Regular Interests and will be evidenced by the Class
II-Accrual Interest, the Class II-A Interest, the Class II-AIO Interest, the
Class II-M1 Interest, the Class II-M2 Interest, the Class II-B Interest, the
Class II-N1 Interest, the Class II-N2 Interest, the Class II-N3 Interest and the
Class II-Marker Interest (collectively, the "REMIC II Regular Interests") which
will be uncertificated and will represent the "regular interests" in REMIC II.
The Class R-S Interest, the Class R-I Interest and the Class R-II Interest will
represent the sole class of "residual interest" in each of the Sub-REMIC, REMIC
I and REMIC II, respectively. The Trustee will hold the Sub-REMIC Regular
Interests, the REMIC I Regular Interests and the REMIC II Regular Interests. The
Master REMIC will consist of the REMIC II Regular Interests and will be
evidenced by Class A (other than the Supplemental Interest Right of the Class A
Certificates), Class A-IO, Class M-1 (other than the Supplemental Interest Right
of the Class M-1 Certificates), Class M-2 (other than the Supplemental Interest
Right of the Class M-2 Certificates), Class B (other than the Supplemental
Interest Right of the Class B Certificates) and Class X Certificates
(collectively, the "Master REMIC Regular Interests") which will represent the
"regular interests" in the Master REMIC. The Class R-III Interest will represent
the sole class of "residual interest" in the Master REMIC. The Class R
Certificates will represent the beneficial ownership of the Class R-S, R-I, R-II
and R-III Interests. The Final Scheduled Maturity Date for each of the Sub-REMIC
Regular Interests, the REMIC I Regular Interests (other than the Class I-N1,
Class I-N2 and Class I-N3 Interests), the REMIC II Regular Interests (other than
the Class II-AIO, Class II-N1, Class II-N2, Class II-N3 and Class II-Marker
Interests) and the Master REMIC Regular Interests (other than the Class A-IO
Certificate) shall be the Distribution Date in December 2033. The Final
Scheduled Maturity Date for the Class I-N1, Class I-N2, Class I-N3, Class II-N1,
Class II-N2, Class II-N3 and Class II-Marker Interests shall be the Distribution
Date in March 2003, and the Final Scheduled Maturity Date for the Class II-AIO
Interest and the Class A-IO Certificate shall be the Distribution Date in June
2005.
41
(b) The Master REMIC Regular Interests and the Class R-III
Interest shall have the principal balances and Pass-Through Rates set forth in
the following table:
Original Certificate
Class Principal Balance Pass-Through Rate
----- ----------------- -----------------
Class A(1) $330,600,000 (3)
Class A-IO (2) 4.00%
Class M-1(1) $21,850,000 (4)
Class M-2(1) $18,050,000 (5)
Class B(1) $5,700,000 (6)
Class X $3,800,000 (7) (8)
Class R (9) (9)
(1) The Capped Certificates represent two separate investments:
(i) the Capped Certificates without the Supplemental Interest
Rights (the "Regular Interests") and (ii) the Supplemental
Interest Rights. Only the first investment, the Regular
Interests, will be treated as regular interests in the Master
REMIC.
(2) On the first Distribution Date through the Distribution Date
in June 2005, the Class A-IO Certificates will have a notional
balance equal to the notional balance of the Class II-AIO, and
for each Distribution Date thereafter, $0.
(3) With respect to any Distribution Date prior to the Clean-up
Call Date, the lesser of (1) 4.428% per annum and (2) the
REMIC II Net WAC Cap for such Distribution Date. With respect
to any Distribution Date after the Clean-up Call Date, the
lesser of (1) 4.928% per annum and (2) the REMIC II Net WAC
Cap for such Distribution Date.
(4) With respect to any Distribution Date prior to the Clean-up
Call Date, the lesser of (1) 6.442% per annum and (2) the
REMIC II Net WAC Cap for such Distribution Date. With respect
to any Distribution Date after the Clean-up Call Date, the
lesser of (1) 6.942% per annum and (2) the REMIC II Net WAC
Cap for such Distribution Date.
(5) With respect to any Distribution Date prior to the Clean-up
Call Date, the lesser of (1) 7.423% per annum and (2) the
REMIC II Net WAC Cap for such Distribution Date. With respect
to any Distribution Date after the Clean-up Call Date, the
lesser of (1) 7.923% per annum and (2) the REMIC II Net WAC
Cap for such Distribution Date.
(6) With respect to any Distribution Date prior to the Clean-up
Call Date, the lesser of (1) 8.612% per annum and (2) the
REMIC II Net WAC Cap for such Distribution Date. With respect
to any Distribution Date after the Clean-up Call Date, the
lesser of (1) 9.112% per annum and (2) the REMIC II Net WAC
Cap for such Distribution Date.
42
(7) The Class X has an initial principal balance of $3,800,000,
but it will not accrue interest on such balance but will
accrue interest on a notional principal balance. The Class X
Certificates will have a notional principal balance equal to
the Aggregate Principal Balance.
(8) The Pass-Through Rate of the Class X Certificates will be the
excess of: (i) the REMIC II Net WAC Cap over (ii) the product
of: (A) two and (B) the weighted average of the Pass-Through
Rates on the REMIC II Regular Interests (other than the Class
II-AIO, Class II-N2, Class II-N3 and Class II-Marker
Interests), where the Class II-Accrual Interest is subject to
a cap equal to zero and the Class II-A, Class II-M1, Class
II-M2 and Class II-B are each subject to a cap equal to the
Pass-Through Rate on its Corresponding Class and the Class
II-N1 is weighted on the basis of its notional principal
balance. With respect to any Distribution Date, interest that
so accrues on the notional principal balance of the Class X
shall be deferred in an amount equal to the
Overcollateralization Increase Amount on such Distribution
Date. Such deferred interest shall not itself bear interest.
(9) The Class R Certificates will represent the beneficial
ownership of the Class R-S, R-I, R-II and R-III Interests. The
Class R-III Interest does not have a principal balance or a
Pass-Through Rate but is entitled to any remaining
distributions of principal and interest after the Master REMIC
Regular Interests have been paid in full.
(c) The REMIC II Regular Interests and the Class R-II Interest
shall have the Initial Principal Balances, Pass-Through Rates and Corresponding
Classes of Certificates set forth in the following table:
Corresponding
REMIC Initial Principal Class of Master
Interests Balance Pass-Through Rate REMIC Interest
--------- ------------------------------ ----------------- --------------
II-Accrual 50% of the Current Pool (1) N/A
Principal Balance plus 50% of
the Overcollateralized Amount
II-A 50% of the Corresponding Class (1) A
balance
II-AIO (2) (3) A-IO
II-M-1 50% of the Corresponding Class (1) M-1
balance
II-M-2 50% of the Corresponding Class (1) M-2
balance
II-B 50% of the Corresponding Class (1) B
balance
II-N1 (4) (5) N/A
II-N2 (6) (7) N/A
II-N3 (8) (9) N/A
II-Marker $1,000 (10) N/A
R-II (11) (11) N/A
43
(1) On any Distribution Date (i) during the Pre-Funding Period and
up to an including the Distribution Date immediately following
the termination of the Pre-Funding Period, a Pass-Through Rate
equal to 0%, and (ii) thereafter, a Pass-Through Rate equal to
the REMIC II Net WAC Cap.
(2) The Class II-AIO will have a notional balance equal to (a) on
the first Distribution Date through the Distribution Date in
March 2003, the sum of the principal balances of Class I-B1,
Class I-B2, Class I-B3, Class I-B4, Class I-B5, Class I-B6,
Class I-B7, Class I-B8, Class I-B9 and Class I-B10; (b) from
the Distribution Date in April 2003 through the Distribution
Date in June 2003, the sum of the principal balances of Class
I-B2, Class I-B3, Class I-B4, Class I-B5, Class I-B6, Class
I-B7, Class I-B8, Class I-B9 and Class I-B10; (c) from the
Distribution Date in July 2003 through the Distribution Date
in September 2003, the sum of the principal balances of Class
I-B3, Class I-B4, Class I-B5, Class I-B6, Class I-B7, Class
I-B8, Class I-B9 and Class I-B10; (d) from the Distribution
Date in October 2003 through the Distribution Date in December
2003, the sum of the principal balances of Class I-B4, Class
I-B5, Class I-B6, Class I-B7, Class I-B8, Class I-B9 and Class
I-B10; (e) from the Distribution Date in January 2004 through
the Distribution Date in March 2004, the sum of the principal
balances of Class I-B5, Class I-B6, Class I-B7, Class I-B8,
Class I-B9 and Class I-B10; (f) from the Distribution Date in
April 2004 through the Distribution Date in June 2004, the sum
of the principal balances of Class I-B6, Class I-B7, Class
I-B8, Class I-B9 and Class I-B10; (g) from the Distribution
Date in July 2004 through the Distribution Date in September
2004, the sum of the principal balances of Class I-B7, Class
I-B8, Class I-B9 and Class I-B10; (h) from the Distribution
Date in October 2004 through the Distribution Date in December
2004, the sum of the principal balances of Class I-B8, Class
I-B9, and Class I-B10; (i) from the Distribution Date in
January 2005 through the Distribution Date in March 2005, the
sum of the principal balances of Class I-B9 and Class I-B10;
(j) from the Distribution Date in April 2005 through the
Distribution Date in June 2005, the principal balance of Class
I-B10; and (k) on each Distribution Date thereafter, $0.
(3) On each Distribution Date up to and including the Distribution
Date in June 2005, a per annum rate equal to 4.00% and (ii)
thereafter, a Pass-Through Rate equal to 0%.
44
(4) The Class II-N1 Interest will have a notional principal
balance equal to (i) during the Pre-Funding Period and up to
and including the Distribution Date immediately following the
termination of the Pre-Funding Period, 50% of the sum of the
notional principal balances of the Class I-N1 and Class I-N2
Interests, and (ii) thereafter, zero.
(5) On any Distribution Date (i) during the Pre-Funding Period and
up to and including the Distribution Date immediately
following the termination of the Pre-Funding Period, the Class
II-N1 Interest is entitled to 50% of the interest paid on the
Class I-N1 and Class I-N2 Interests, and (ii) thereafter, a
Pass-Through Rate equal to 0%.
(6) The Class II-N2 Interest will have a notional principal
balance equal to (i) during the Pre-Funding Period and up to
and including the Distribution Date immediately following the
termination of the Pre-Funding Period, 50% of the sum of the
notional principal balances of the Class I-N1 and Class I-N2
Interests, and (ii) thereafter, zero.
(7) On any Distribution Date (i) during the Pre-Funding Period and
up to and including the Distribution Date immediately
following the termination of the Pre-Funding Period, the Class
II-N2 Interest is entitled to 50% of the interest paid on the
Class I-N1 and Class I-N2 Interests, and (ii) thereafter, a
Pass-Through Rate equal to 0%.
(8) The Class II-N3 Interest will have a notional principal
balance equal to (i) during the Pre-Funding Period and up to
and including the Distribution Date immediately following the
termination of the Pre-Funding Period, the notional principal
balance of the Class I-N3 Interest, and (ii) thereafter, zero.
(9) On any Distribution Date (i) during the Pre-Funding Period and
up to and including the Distribution Date immediately
following the termination of the Pre-Funding Period, the Class
II-N3 Interest is entitled to 100% of the interest paid on the
Class I-N3 Interest, and (ii) thereafter, a Pass-Through Rate
equal to 0%.
(10) On any Distribution Date (i) during the Pre-Funding Period and
up to and including the Distribution Date immediately
following the termination of the Pre-Funding Period, a per
annum rate equal to the REMIC II Net WAC Cap and (ii)
thereafter, a Pass-Through Rate equal to 0%.
(11) The Class R-II Interest does not have a principal balance or a
Pass-Through Rate but is entitled to any remaining
distributions of principal and interest after the REMIC II
Regular Interests have been paid in full.
45
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount will be payable as a reduction of the principal
balances of Class II-A, Class II-M-1, Class II-M-2 and Class II-B (in the order
and amount of such reduction to the principal balance of each classes'
Corresponding Class) and will be accrued and added to the principal balance of
the Class II-Accrual Interest. On each Distribution Date, the increase in
principal balance of the Class II-Accrual Interest may not exceed interest
accruals for such Distribution Date for the Class II-Accrual Interest. In the
event that (i) 50% of the increase in the Overcollateralized Amount exceeds (ii)
interest accruals on the Class II-Accrual Interest for such Distribution Date,
the excess for such Distribution Date (accumulated with all such excesses for
all prior Distribution Dates) will be added to any increase in the
Overcollateralized Amount for purposes of determining the amount of interest
accrual on the Class II-Accrual Interest to be accrued and added as principal on
the Class II-Accrual Interest on the next Distribution Date pursuant to the
first sentence of this paragraph.
On each Distribution Date, the Principal Remittance Amount
shall be allocated 50% to the Class II-Accrual Interest and 50% to Class II-A,
Class II-M-1, Class II-M-2 and Class II-B (in the order and amount of reductions
to the principal balances of each classes' Corresponding Class) until paid in
full. Notwithstanding the above, payments allocated to the Class X Certificates
that result in the reduction of the Overcollateralized Amount shall be allocated
to the Class II-Accrual Interest (until paid in full). Liquidated Loan Losses
shall be applied so that after all distributions have been made on each
Distribution Date the principal balances of the Class II-A, Class II-M-1, Class
II-M-2 and Class II-B are each equal to 50% of the principal balance of its
Corresponding Class and the Class II-Accrual Interest is equal to the sum of (i)
50% of the Aggregate Principal Balance, (ii) 50% of the Overcollateralized
Amount and (iii) 50% of the Pre-Funding Amount (net of Pre-Funding Earnings).
(d) The REMIC I Regular Interests and the Class R-I Interest
shall have the Initial Principal Balances and Pass-Through Rates set forth in
the following table:
REMIC Initial Principal Pass-Through
Interests Balance Rate
--------- ------- ----
I-A $284,000,000 (1)
I-B1 $1,500,000 (2)
I-B2 $3,600,000 (2)
I-B3 $5,200,000 (2)
I-B4 $6,000,000 (2)
I-B5 $5,500,000 (2)
I-B6 $800,000 (2)
I-B7 $16,100,000 (2)
I-B8 $12,600,000 (2)
I-B9 $7,000,000 (2)
I-B10 $41,500,000 (2)
I-N1 (3) (4)
I-N2 (5) (6)
I-N3 (7) (8)
R-I (9) (9)
(1) On any Distribution Date (i) during the Pre-Funding Period and
up to an including the Distribution Date immediately following
the termination of the Pre-Funding Period, a Pass-Through Rate
equal to 0%, and (ii) thereafter, a Pass-Through Rate equal to
the Net Weighted Average Mortgage Interest Rate.
46
(2) On any Distribution Date (i) during the Pre-Funding Period and
up to and including the Distribution Date immediately
following the termination of the Pre-Funding Period, a
Pass-Through Rate equal to 4%, and (ii) thereafter, a
Pass-Through Rate equal to the Net Weighted Average Mortgage
Interest Rate.
(3) The Class I-N1 Interest will have a notional principal balance
equal to (i) during the Pre-Funding Period and up to and
including the Distribution Date immediately following the
termination of the Pre-Funding Period, the principal balance
of the Class S-1 Interest, and (ii) thereafter, zero.
(4) On any Distribution Date (i) during the Pre-Funding Period and
up to and including the Distribution Date immediately
following the termination of the Pre-Funding Period, a
Pass-Through Rate equal to the REMIC I Weighted Average
Interest Rate, and (ii) thereafter, a Pass-Through Rate equal
to 0%.
(5) The Class I-N2 Interest will have a notional principal balance
equal to (i) during the Pre-Funding Period and up to and
including the Distribution Date immediately following the
termination of the Pre-Funding Period, the principal balance
of the Class S-2 Interest, and (ii) thereafter, zero.
(6) On any Distribution Date (i) during the Pre-Funding Period and
up to an including the Distribution Date immediately following
the termination of the Pre-Funding Period, a Pass-Through Rate
equal to the REMIC I Weighted Average Interest Rate minus 4%,
and (ii) thereafter, a Pass-Through Rate equal to 0%.
(7) The Class I-N3 Interest will have a notional principal balance
equal to (i) during the Pre-Funding Period and up to and
including the Distribution Date immediately following the
termination of the Pre-Funding Period, the notional principal
balance of the Class S-3 Interest, and (ii) thereafter, zero.
(8) On any Distribution Date (i) during the Pre-Funding Period and
up to and including the Distribution Date immediately
following the termination of the Pre-Funding Period, the Class
I-N3 Interest is entitled to 100% of the interest paid on the
Class S-3 Interest, and (ii) thereafter, a Pass-Through Rate
equal to 0%.
(9) The Class R-I Interest does not have a principal balance or a
Pass-Through Rate but is entitled to any remaining
distributions of principal and interest after the REMIC I
Regular Interests have been paid in full.
47
On each Distribution Date, the Principal Remittance Amount
will be allocated to Class I-A until the Class I-A is paid in full or eliminated
by such losses; and thereafter, such amounts will be allocated sequentially to
the Class I-B1, Class I-B2, Class I-B3, Class I-B4, Class I-B5, Class I-B6,
Class I-B7, Class I-B8, Class I-B9 and Class I-B10 until each such Class is paid
in full or eliminated by such losses.
(e) the Sub-REMIC Regular Interests and the Class R-S Interest
shall have the Initial Principal Balances and Pass-Through Rates set forth in
the following table:
Initial
REMIC Interests Principal Balance Pass-Through Rate
--------------- ----------------- -----------------
S-I $240,200,000 (1)
S-2 $99,800,000 (1)
S-3 (2) (3)
S-4 $40,000,000 (4)
R-S (5) (5)
(1) On any Distribution Date, a Pass-Through Rate equal to the Net
Weighted Average Mortgage Interest Rate.
(2) The Class S-3 Interest will have a notional principal balance
equal to (i) during the Pre-Funding Period and up to and
including the Distribution Date immediately following the
termination of the Pre-Funding Period, the Principal Balance
of the Subsequent Mortgage Loans, and (ii) thereafter, zero.
(3) On any Distribution Date, (i) during the Pre-Funding Period
and up to and including the Distribution Date immediately
following the termination of the Pre-Funding Period, 100% of
the interest paid on the Subsequent Mortgage Loans and (ii)
thereafter, a Pass-Through Rate equal to 0%.
(4) On any Distribution Date, (i) during the Pre-Funding Period
and up to and including the Distribution Date immediately
following the termination of the Pre-Funding Period, a
Pass-Through Rate equal to 0% and (ii) thereafter, a
Pass-Through Rate equal to the Net Weighted Average Mortgage
Interest Rate.
(5) The Class R-S Interest does not have a principal balance or a
Pass-Through Rate but is entitled to any remaining
distributions of principal and interest after the Sub-REMIC
Regular Interests have been paid in full.
(f) The Closing Date will be the "startup day" of each REMIC
created hereunder within the meaning of Section 860G(a)(9) of the Code.
Section 2.08 Execution of Certificates. The Trustee
acknowledges the assignment to it of the Mortgage Loans and the delivery of the
Trustee's Mortgage Files relating thereto to it and, concurrently with such
delivery, has executed, authenticated and delivered to or upon the order of the
Depositor, in exchange for the Mortgage Loans, the Trustee's Mortgage Files and
the other assets included in the definition of Trust Fund, Certificates duly
authenticated by the Trustee in Authorized Denominations evidencing the entire
ownership of the Trust Fund.
48
Section 2.09 Application of Principal and Interest. In the
event that Net Liquidation Proceeds on a Liquidated Mortgage Loan are less than
the Principal Balance of the related Mortgage Loan plus accrued interest
thereon, or any Mortgagor makes a partial payment of any Monthly Payment due on
a Mortgage Loan, such Net Liquidation Proceeds or partial payment shall be
applied as provided in the related Mortgage Note, and if not so provided, first
to interest accrued at the Mortgage Interest Rate and then to principal.
Section 2.10 Grant of Security Interest. (a) Except with
respect to the REMIC Provisions, it is the intention of the parties hereto that
the conveyance by the Depositor of the Trust Fund to the Trustee on behalf of
the Trust shall constitute a purchase and sale of such Trust Fund and not a
loan. In the event, however, that a court of competent jurisdiction were to hold
that the transaction evidenced hereby constitutes a loan and not a purchase and
sale, it is the intention of the parties hereto that this Agreement shall
constitute a security agreement under applicable law, and that the Depositor
shall be deemed to have granted to the Trustee, on behalf of the Trust, a first
priority perfected security interest in all of the Depositor's right, title and
interest in, to and under the Trust Fund. The conveyance by the Depositor of the
Trust Fund to the Trustee on behalf of the Trust shall not constitute and is not
intended to result in an assumption by the Trustee or any Certificateholder of
any obligation of the Unaffiliated Seller or any other Person in connection with
the Trust Fund.
(b) The Depositor and the Servicer shall take no action
inconsistent with the Trust's ownership of the Trust Fund and each shall
indicate or shall cause to be indicated in its records and records held on its
behalf that ownership of each Mortgage Loan and the assets in the Trust Fund are
held by the Trustee on behalf of the Trust. In addition, the Depositor and the
Servicer shall respond to any inquiries from third parties with respect to
ownership of a Mortgage Loan or any other asset in the Trust Fund by stating
that it is not the owner of such asset and that ownership of such Mortgage Loan
or other Trust Fund asset is held by the Trustee on behalf of the Trust.
Section 2.11 Further Action Evidencing Assignments. (a) The
Servicer agrees that, from time to time, at its expense, it shall cause the
Unaffiliated Seller (and the Depositor on behalf of itself also agrees that it
shall), promptly to execute and deliver all further instruments and documents,
and take all further action, that may be necessary or appropriate, or that the
Servicer, the Collateral Agent or the Trustee may reasonably request, in order
to perfect, protect or more fully evidence the transfer of ownership of the
Trust Fund or to enable the Trustee to exercise or enforce any of its rights
hereunder. Without limiting the generality of the foregoing, the Servicer and
the Depositor will, upon the request of the Servicer, the Collateral Agent or
the Trustee, execute and file (or cause to be executed and filed) such real
estate filings, financing or continuation statements, or amendments thereto or
assignments thereof, and such other instruments or notices, as may be necessary
or appropriate.
49
(b) The Depositor hereby grants to the Servicer and the
Trustee powers of attorney to execute all documents on its behalf under this
Agreement and the Unaffiliated Seller's Agreement as may be necessary or
desirable to effectuate the foregoing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations of the Servicer and the
Unaffiliated Seller. The Servicer and the Unaffiliated Seller hereby represent
and warrant to the Collateral Agent, the Trustee, the Depositor, the Back-up
Servicer and the Certificateholders as of the Closing Date and during the term
of this Agreement that:
(a) Each of the Unaffiliated Seller, the Servicer and the
Subservicers is a corporation duly organized, validly existing and in good
standing under the laws of their respective states of incorporation and has the
corporate power to own its assets and to transact the business in which it is
currently engaged. Each of the Unaffiliated Seller, the Servicer and the
Subservicers is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it or the performance of its
obligations hereunder requires such qualification and in which the failure so to
qualify could reasonably be expected to have a material adverse effect on the
business, properties, assets, or condition (financial or other) of the
Unaffiliated Seller, the Servicer or the Subservicers or the performance of
their respective obligations hereunder;
(b) The Unaffiliated Seller and the Servicer each has the
power and authority to make, execute, deliver and perform this Agreement and all
of the transactions contemplated under this Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement. When executed and delivered, this Agreement will constitute
the legal, valid and binding obligation of the Unaffiliated Seller and the
Servicer, enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting the rights of creditors generally and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(c) Neither the Unaffiliated Seller nor the Servicer is
required to obtain the consent of any other party or any consent, license,
approval or authorization from, or registration or declaration with, any
governmental authority, bureau or agency which consent already has not been
obtained in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except such as have been obtained prior to the
Closing Date;
(d) The execution, delivery and performance of this Agreement
by the Unaffiliated Seller and the Servicer will not violate any provision of
any existing law or regulation or any order or decree of any court or the
Articles of Incorporation or Bylaws of the Unaffiliated Seller or the Servicer,
respectively, or constitute a breach of any mortgage, indenture, contract or
other agreement to which the Unaffiliated Seller or the Servicer, respectively,
is a party or by which it may be bound;
50
(e) There is no action, suit, proceeding or investigation
pending or threatened against the Servicer, the Unaffiliated Seller or the
Subservicers which, either in any one instance or in the aggregate, is, likely
to result in any material adverse change in the business, operations, financial
condition, properties, or assets of the Servicer, the Unaffiliated Seller or the
Subservicers, or in any material impairment of the right or ability of any of
them to carry on its business substantially as now conducted, or in any material
liability on the part of any of them, or which would draw into question the
validity of this Agreement, the Certificates, or the Mortgage Loans or of any
action taken or to be taken in connection with the obligations of the
Unaffiliated Seller or the Servicer contemplated herein or therein, or which
would be likely to impair materially the ability of the Unaffiliated Seller or
the Servicer to perform its obligations hereunder;
(f) Neither this Agreement nor any statement, report, or other
document furnished or to be furnished by the Servicer, the Unaffiliated Seller
or the Subservicer pursuant to this Agreement or in connection with the
transactions contemplated hereby, including, without limitation, the sale or
placement of the Certificates, contains any untrue statement of fact provided by
or on behalf of the Unaffiliated Seller or the Servicer or omits to state a fact
necessary to make the statements provided by or on behalf of the Unaffiliated
Seller or the Servicer contained herein or therein not misleading;
(g) Neither the Unaffiliated Seller nor the Servicer believes,
nor does either have any reason or cause to believe, that it cannot perform each
and every covenant contained in this Agreement;
(h) The transfer, assignment, and conveyance of the Mortgage
Loans by the Unaffiliated Seller pursuant to this Agreement is not subject to
the bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction;
(i) The Unaffiliated Seller is solvent and will not as a
result of this Agreement and the undertakings of the Unaffiliated Seller
hereunder be rendered insolvent;
(j) None of the Unaffiliated Seller, the Servicer or the
Subservicers is an "investment company" or a company "controlled by an
investment company," within the meaning of the Investment Company Act of 1940,
as amended; and
(k) Immediately prior to the transfer and assignment by the
Depositor to the Trustee, the Depositor had good title to, and was the sole
owner of each Mortgage Loan, free of any interest of any other Person, and the
Depositor has transferred all right, title and interest in each Mortgage Loan to
the Trustee. The transfer of the Mortgage Note and the Mortgage as and in the
manner contemplated by this Agreement is sufficient either (i) fully to transfer
to the Trustee, for the benefit of the Certificateholders, all right, title, and
interest of the Depositor thereto as note holder and mortgagee or (ii) to grant
to the Trustee, for the benefit of the Certificateholders, the security interest
referred to in Section 2.10 hereof. The Mortgage has been duly assigned and the
Mortgage Note has been duly endorsed. The Assignment of Mortgage delivered to
the Trustee pursuant to Section 2.05(a)(iv) is in recordable form and is
acceptable for recording under the laws of the applicable jurisdiction. The
endorsement of the Mortgage Note, the delivery to the Trustee of the endorsed
Mortgage Note, and such Assignment of Mortgage, and the delivery of such
Assignment of Mortgage for recording to, and the due recording of such
Assignment of Mortgage in, the appropriate public recording office in the
jurisdiction in which the Mortgaged Property is located are sufficient to permit
the Trustee to avail itself of all protection available under applicable law
against the claims of any present or future creditors of the Depositor, and are
sufficient to prevent any other sale, transfer, assignment, pledge, or
hypothecation of the Mortgage Note and Mortgage by the Depositor from being
enforceable.
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It is understood and agreed that the representations,
warranties and covenants set forth in this Section 3.01 shall survive the
delivery of the respective Mortgage Files to the Collateral Agent on behalf of
the Trustee or to a custodian, as the case may be, and inure to the benefit of
the Trustee.
Section 3.02 Representations, Warranties and Covenants of the
Depositor. The Depositor hereby represents, warrants and covenants to the
Collateral Agent, the Servicer, the Back-up Servicer, the Trustee, the
Unaffiliated Seller, and the Certificateholders that as of the date of this
Agreement or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to
convey the Mortgage Loans and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor, all requisite corporate action having
been taken, and, assuming the due authorization, execution and delivery hereof
by the other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
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(f) There are no actions, suits or proceedings before or
against or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's reasonable
judgment, might materially and adversely affect the performance by the Depositor
of its obligations under this Agreement, or the validity or enforceability of
this Agreement;
(g) The Depositor is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee, the Depositor had good title to, and was the sole
owner of each Mortgage Loan, free of any interest of any other Person, and the
Depositor has transferred all right, title and interest in each Mortgage Loan to
the Trustee. The transfer of the Mortgage Note and the Mortgage as and in the
manner contemplated by this Agreement is sufficient either (i) fully to transfer
to the Trustee, for the benefit of the Certificateholders, all right, title, and
interest of the Depositor thereto as note holder and mortgagee or (ii) to grant
to the Trustee, for the benefit of the Certificateholders, the security interest
referred to in Section 2.10 hereof. The Mortgage has been duly assigned and the
Mortgage Note has been duly endorsed. The Assignment of Mortgage delivered to
the Collateral Agent on behalf of the Trustee pursuant to Section 2.05(a)(iv) is
in recordable form and is acceptable for recording under the laws of the
applicable jurisdiction. The endorsement of the Mortgage Note, the delivery to
the Collateral Agent on behalf of the Trustee of the endorsed Mortgage Note, and
such Assignment of Mortgage, and the delivery of such Assignment of Mortgage for
recording to, and the due recording of such Assignment of Mortgage in, the
appropriate public recording office in the jurisdiction in which the Mortgaged
Property is located are sufficient to permit the Trustee to avail itself of all
protection available under applicable law against the claims of any present or
future creditors of the Depositor, and are sufficient to prevent any other sale,
transfer, assignment, pledge, or hypothecation of the Mortgage Note and Mortgage
by the Depositor from being enforceable.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 3.02 shall survive delivery
of the respective Mortgage Files to the Collateral Agent on behalf of the
Trustee or to a custodian, as the case may be, and shall inure to the benefit of
the Trustee.
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Section 3.03 Purchase and Substitution. (a) It is understood
and agreed that the representations and warranties set forth in Sections 3.01,
3.02 and 3.03 of the Unaffiliated Seller's Agreement shall survive delivery of
the Certificates to the Certificateholders. Pursuant to the Unaffiliated
Seller's Agreement, with respect to any representation or warranty contained in
Sections 3.01, 3.02 or 3.03 of the Unaffiliated Seller's Agreement that is made
to the best of the Unaffiliated Seller's knowledge, the Unaffiliated Seller
shall be deemed to have knowledge of all facts and circumstances in existence as
of such date and, if it is discovered by the Servicer, the Back-up Servicer, any
Subservicer, the Trustee or any Certificateholder that the substance of such
representation and warranty was inaccurate as of the Closing Date and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan or the interests of the Trustee with respect thereto, then notwithstanding
the Unaffiliated Seller's lack of knowledge with respect to the inaccuracy at
the time the representation or warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation or warranty. Upon discovery by
the Unaffiliated Seller, the Servicer, the Back-up Servicer, any Subservicer or
the Trustee of a breach of any of such representations and warranties which
materially and adversely affects the value of the Mortgage Loans or the interest
of the Trustee or the Certificateholders, or which materially and adversely
affects the interests of the Trustee or the Certificateholders in the related
Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan (notwithstanding that such representation and warranty
was made to the Unaffiliated Seller's best knowledge), the party discovering
such breach shall promptly (and in any event within five (5) Business Days of
the discovery) give written notice to the others. Subject to the last paragraph
of this Section 3.03, within sixty (60) days of the earlier of its discovery or
its receipt of notice of any breach of a representation or warranty, pursuant to
the Unaffiliated Seller's Agreement, the Servicer shall, or shall cause the
Unaffiliated Seller or an Originator to (a) promptly cure such breach in all
material respects, or (b) purchase such Mortgage Loan on the next succeeding
Servicer Remittance Date, by depositing an amount equal to the Loan Repurchase
Price into the Collection Account, or (c) remove such Mortgage Loan from the
Trust Fund (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans; provided, that such
substitution is effected not later than the date which is two years after the
Startup Day or at such later date, if the Trustee receives an Opinion of
Counsel, by and at the cost of the Servicer, to the effect set forth below in
this Section. In addition, pursuant to the Unaffiliated Seller's Agreement, the
Unaffiliated Seller and the related Originator shall be obligated to indemnify
the Trustee and the Certificateholders for any third party claims arising out of
a breach by the Unaffiliated Seller of representations or warranties regarding
the Mortgage Loans. Pursuant to the Unaffiliated Seller's Agreement any such
substitution shall be accompanied by payment by the Unaffiliated Seller of the
Substitution Adjustment, if any, to be deposited in the Collection Account.
(b) As to any Deleted Mortgage Loan for which the Unaffiliated
Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the Servicer
shall cause the Unaffiliated Seller or an Originator, as applicable, to effect
such substitution by delivering to the Collateral Agent on behalf of the Trustee
a certification in the form attached hereto as Exhibit L, executed by a
Servicing Officer and shall cause the Unaffiliated Seller or an Originator, as
applicable, to deliver the documents described in Sections 2.05(a)(i) through
(vi) for such Qualified Substitute Mortgage Loan or Loans to the Collateral
Agent on behalf of the Trustee.
(c) The Servicer shall deposit in the Collection Account all
payments received in connection with such Qualified Substitute Mortgage Loan or
Loans after the date of such substitution. Monthly Payments received with
respect to a Qualified Substitute Mortgage Loan or Loans on or before the date
of substitution will be retained by the Unaffiliated Seller. The Trust Fund will
own all payments received on the Deleted Mortgage Loan on or before the date of
substitution, and the Unaffiliated Seller shall thereafter be entitled to retain
all amounts subsequently received in respect of such Deleted Mortgage Loan. The
Servicer shall give written notice to the Trustee and the Back-up Servicer that
such substitution has taken place and shall amend the Mortgage Loan Schedule to
reflect the removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage Loan or
Loans. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects.
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(d) It is understood and agreed that the obligations of the
Unaffiliated Seller and the related Originator set forth in Sections 2.06 and
3.05 of the Unaffiliated Seller's Agreement to, and the Servicer's obligation to
cause the Unaffiliated Seller and the Originator to cure, purchase or substitute
for a defective Mortgage Loan, or to indemnify as described in clause (a) above,
constitute the sole remedies of the Trustee and the Certificateholders
respecting a breach of the representations and warranties of the Unaffiliated
Seller and the Originators set forth in Sections 3.01, 3.02 and 3.03 of the
Unaffiliated Seller's Agreement. The Trustee shall give prompt written notice to
the Rating Agencies of any repurchase or substitution made pursuant to this
Section 3.03 or Section 2.06(b).
(e) Upon discovery by the Servicer, the Back-up Servicer, the
Trustee or any Certificateholder that any Mortgage Loan does not constitute a
Qualified Mortgage, the party discovering such fact shall promptly (and in any
event within five (5) Business Days of the discovery) give written notice
thereof to the other parties. In connection therewith, pursuant to the
Unaffiliated Seller's Agreement, the Unaffiliated Seller shall be required to
repurchase or substitute a Qualified Substitute Mortgage Loan for the affected
Mortgage Loan within sixty (60) days of the earlier of such discovery by any of
the foregoing parties, or the Trustee's or the Unaffiliated Seller's receipt of
notice, in the same manner as it would a Mortgage Loan for a breach of
representation or warranty contained in Sections 3.01, 3.02 or 3.03 of the
Unaffiliated Seller's Agreement. The Trustee shall reconvey to the Unaffiliated
Seller the Mortgage Loan to be released pursuant hereto in the same manner, and
on the same terms and conditions, as it would a Mortgage Loan repurchased for
breach of a representation or warranty contained in Sections 3.01, 3.02 or 3.03
of the Unaffiliated Seller's Agreement.
(f) Pursuant to Section 3.05(k) of the Unaffiliated Seller's
Agreement the Unaffiliated Seller and each of the Originators shall be jointly
and severally responsible for any repurchase, cure or substitution obligation of
the Unaffiliated Seller or any of the Originators under this Agreement or the
Unaffiliated Seller's Agreement.
Section 3.04 Representations, Warranties and Covenants of the
Trustee, the Collateral Agent and the Back-up Servicer. Each of the Trustee, the
Collateral Agent and the Back-up Servicer hereby represents, warrants and
covenants to the Servicer, the Certificateholders, the Unaffiliated Seller and
the Depositor that as of the date of this Agreement or as of such date
specifically provided herein:
(a) It is a banking corporation duly organized, validly
existing and in good standing under the laws of the State of New York;
(b) It has the corporate power and authority to execute,
deliver and perform, and to enter into and consummate transactions contemplated
by this Agreement; and
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(c) This Agreement has been duly and validly authorized,
executed and delivered by it, all requisite corporate action having been taken,
and, assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes or will constitute the legal, valid and binding
agreement of it, enforceable against it in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights of
creditors generally, and by general equity principles (regardless of whether
such enforcement is considered in a proceeding in equity or at law).
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 3.04 shall survive delivery
of the respective Trustee's Mortgage Files to the Collateral Agent, on behalf of
the Trustee or to another custodian, as the case may be, and shall inure to the
benefit of the Certificateholders.
ARTICLE IV
THE CERTIFICATES
Section 4.01 The Certificates. The Class A Certificates shall
be substantially in the form annexed hereto of Exhibit A, the Class A-IO
Certificates shall be substantially in the form annexed hereto as Exhibit B, the
Class M-1 and Class M-2 Certificates shall be substantially in the form annexed
hereto of Exhibit C and the Class B, Class X and Class R Certificates shall be
substantially in the forms annexed hereto as Exhibits D, E and F, respectively.
All Certificates shall be executed by manual or facsimile signature on behalf of
the Trustee by an authorized officer and authenticated by the manual or
facsimile signature of an authorized officer. Certificates bearing the
signatures of individuals who were at the time of the execution of the
Certificates the authorized officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the delivery of such Certificates or did not hold such offices
at the date of such Certificates. All Certificates issued hereunder shall be
dated the date of their authentication.
Section 4.02 Registration of Transfer and Exchange of
Certificates. (a) The Trustee, as registrar, shall cause to be kept a register
(the "Certificate Register") in which, subject to such reasonable regulations as
it may prescribe, the Trustee shall provide for the registration of Certificates
and the registration of transfer of Certificates. The Trustee is hereby
appointed registrar (the "Certificate Registrar") for the purpose of registering
Certificates and transfers of Certificates as herein provided.
(b) All Certificates issued upon any registration of transfer
or exchange of Certificates shall be valid evidence of the same ownership
interests in the Trust and entitled to the same benefits under this Agreement as
the Certificates surrendered upon such registration of transfer or exchange.
(c) Every Certificate presented or surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Trustee duly
executed by the Holder thereof or his attorney duly authorized in writing.
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(d) No service charge shall be made to a Holder for any
registration of transfer or exchange of Certificates, but the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates; any other expenses in connection with such transfer or
exchange shall be an expense of the Trust.
(e) It is intended that the Offered Certificates be registered
so as to participate in a global book-entry system with the Depository, as set
forth herein. The Offered Certificates shall, except as otherwise provided in
the next paragraph, be initially issued in the form of a single fully registered
Certificate with a denomination equal to the Original Certificate Principal
Balance or Class A-IO Notional Balance, respectively. Upon initial issuance, the
ownership of each such Offered Certificate shall be registered in the
Certificate Register in the name of Cede & Co., or any successor thereto, as
nominee for the Depository. The Depositor and the Trustee are hereby authorized
to execute and deliver the Representation Letter with the Depository. With
respect to the Offered Certificates registered in the Certificate Register in
the name of Cede & Co., as nominee of the Depository, the Depositor, the
Unaffiliated Seller, the Servicer, the Back-up Servicer and the Trustee shall
have no responsibility or obligation to Direct or Indirect Participants or
beneficial owners for which the Depository holds Offered Certificates from time
to time as a Depository. Without limiting the immediately preceding sentence,
the Depositor, the Unaffiliated Seller, the Servicer, the Back-up Servicer and
the Trustee shall have no responsibility or obligation with respect to (i) the
accuracy of the records of the Depository, Cede & Co., or any Direct or Indirect
Participant with respect to any Ownership Interest, (ii) the delivery to any
Direct or Indirect Participant or any other Person, other than a
Certificateholder, of any notice with respect to the Offered Certificates or
(iii) the payment to any Direct or Indirect Participant or any other Person,
other than a Certificateholder, of any amount with respect to any distribution
of principal or interest on the Offered Certificates. No Person other than a
Certificateholder shall receive a certificate evidencing such Offered
Certificate. Upon delivery by the Depository to the Trustee of written notice to
the effect that the Depository has determined to substitute a new nominee in
place of Cede & Co., and subject to the provisions hereof with respect to the
payment of interest by the mailing of checks or drafts to the Certificateholders
appearing as Certificateholders at the close of business on a Record Date, the
name "Cede & Co." in this Agreement shall refer to such new nominee of the
Depository.
(f) In the event that (i) the Depository or the Servicer
advises the Trustee in writing that the Depository is no longer willing or able
to discharge properly its responsibilities as nominee and depository with
respect to the Offered Certificates and the Servicer or the Depository is unable
to locate a qualified successor or (ii) the Trustee at its sole option elects to
terminate the book-entry system through the Depository, the Offered Certificates
shall no longer be restricted to being registered in the Certificate Register in
the name of Cede & Co. (or a successor nominee) as nominee of the Depository. At
that time, the Servicer may determine that the Offered Certificates shall be
registered in the name of and deposited with a successor depository operating a
global book-entry system, as may be acceptable to the Servicer, or such
depository's agent or designee but, if the Servicer does not select such
alternative global book-entry system, then the Offered Certificates may be
registered in whatever name or names Certificateholders transferring Offered
Certificates shall designate, in accordance with the provisions hereof;
provided, however, that any such reregistration shall be at the expense of the
Servicer.
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(g) Notwithstanding any other provision of this Agreement to
the contrary, so long as any Offered Certificate is registered in the name of
Cede & Co., as nominee of the Depository, all distributions of principal or
interest on such Offered Certificates, as the case may be, and all notices with
respect to such Offered Certificates, as the case may be, shall be made and
given, respectively, in the manner provided in the Representation Letter.
(h) No transfer, sale, pledge or other disposition of any
Class R or Class X Certificate shall be made unless such disposition is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act") and effective registration or qualification
under applicable state securities laws or "Blue Sky" laws, or is made in a
transaction that does not require such registration or qualification. In the
event that a transfer of a Certificate is to be made in reliance upon an
exemption from the 1933 Act, the Trustee or the Certificate Registrar shall
require, in order to assure compliance with the 1933 Act, that the
Certificateholder desiring to effect such disposition and such
Certificateholder's prospective transferee each certify to the Trustee or the
Certificate Registrar in writing the facts surrounding such disposition
substantially in the form of Exhibit M hereto (with respect to a transfer made
pursuant to Rule 144A promulgated under the 0000 Xxx) and may, unless such
transfer occurs more than three years after the Closing Date or is made pursuant
to Rule 144A promulgated under the 1933 Act, require an Opinion of Counsel
satisfactory to the Trustee or Certificate Registrar as the case may be, that
such transfer may be made pursuant to an exemption from the 1933 Act, which
Opinion of Counsel shall be at the expense of the Certificateholder. None of the
Servicer, the Back-up Servicer, the Depositor, the Unaffiliated Seller or the
Trustee is obligated under this Agreement to register Certificates under the
1933 Act, as amended or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of the Class R or
Class X Certificates without such registration or qualification. Every
Certificate presented or surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer substantially in the
form of Exhibit N hereto, or such other endorsement or written instrument of
transfer as is satisfactory to the Trustee, duly executed by the Holder thereof
or his attorney duly authorized in writing, together with wiring instructions,
if applicable, in the form of Exhibit R.
(i) Any such Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor,
the Unaffiliated Seller, the Back-up Servicer and the Servicer against any
liability that may result if the transfer is not exempt or is not made in
accordance with such applicable federal and state laws. Promptly after receipt
by an indemnified party under this paragraph of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this paragraph, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this paragraph. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to appoint counsel reasonably satisfactory to such indemnified party to
represent the indemnified party in such action; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to appoint counsel to defend such action
and approval by the indemnified party of such counsel, the indemnifying party
will not be liable to such indemnified party under this paragraph for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso of the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel for any indemnified party),
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party. Under no circumstances shall the indemnified party enter
into a settlement agreement with respect to any lawsuit, claim or other
proceeding without the prior written consent of the indemnifying party.
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(j) Subject to the restrictions set forth in this Agreement,
upon surrender for registration of transfer of any Certificate at the office or
agency of the Trustee located in New York, New York, the Trustee shall execute,
authenticate and deliver in the name of the designated transferee or
transferees, a new Certificate of the same Class and Percentage Interest and
dated the date of authentication by the Trustee. At the option of the
Certificateholders, Certificates may be exchanged for other Certificates of
Authorized Denominations of a like aggregate Percentage Interest, upon surrender
of the Certificates to be exchanged at such office. Whenever any Certificates
are so surrendered for exchange, the Trustee shall execute, authenticate and
deliver the Certificates which the Certificateholder making the exchange is
entitled to receive. No service charge shall be made for any transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates. All Certificates
surrendered for transfer and exchange shall be cancelled and destroyed by the
Trustee in accordance with the Trustee's standard procedures.
(k) No transfer of an Offered Certificate shall be made to the
Unaffiliated Seller or, to the actual knowledge of a Responsible Officer of the
Trustee, to any of the Unaffiliated Seller's Affiliates, successors or assigns.
(l) Each Person who has or who acquires any Ownership Interest
in a Class R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions
and to have irrevocably appointed the Servicer or its designee as its
attorney-in-fact to negotiate the terms of any mandatory sale under clause
(viii) below and to execute all instruments of transfer and to do all other
things necessary in connection with any such sale, and the rights of each Person
acquiring any Ownership Interest in a Class R Certificate are expressly subject
to the following provisions:
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(i) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall be a Permitted
Transferee and a United States Person and shall promptly notify the
Trustee of any change or impending change in its status as either a
United States Person or a Permitted Transferee.
(ii) In connection with any proposed Transfer of any
Ownership Interest in a Class R Certificate, the Trustee shall
require delivery to it of, and shall not register the Transfer of any
Class R Certificate until its receipt of, an affidavit and agreement (a
"Transfer Affidavit and Agreement") attached hereto as Exhibit M from
the proposed Transferee, in form and substance satisfactory to the
Trustee.
(iii) The Trustee will register the Transfer of any Class R
Certificate only if it shall have received the Transfer
Affidavit and Agreement and all of such other documents as shall have
been reasonably required by the Trustee as a condition to such
registration. In addition, no Transfer of a Class R Certificate shall
be made unless the Trustee shall have received a representation letter
from the Transferee of such Certificate to the effect that such
Transferee is a United States Person and is not a "disqualified
organization" (as defined in Section 860E(e)(5) of the Code).
(iv) Notwithstanding the delivery of a Transfer Affidavit
and Agreement by a proposed Transferee under clause (ii)
above, if a Responsible Officer of the Trustee has actual knowledge
that the proposed Transferee is not a Permitted Transferee, no Transfer
of an Ownership Interest in a Class R Certificate to such proposed
Transferee shall be effected.
(v) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall agree (A) to require a
Transfer Affidavit and Agreement from any other Person to whom such
Person attempts to transfer its Ownership Interest in a Class R
Certificate (B) to require a Transfer Affidavit and Agreement from any
Person for whom such Person is acting as nominee, trustee or agent in
connection with any transfer of its Ownership Interest in a Class R
Certificate, (C) not to transfer any Ownership Interest in a Class R
Certificate to any other Person (1) if it has actual knowledge that
such Person is not a Permitted Transferee or that such Transfer
Affidavit and Agreement is false, (2) if such transfer is for the
purpose of impeding the assessment or collection of tax, (3) if it has
actual knowledge or reason to know that the proposed transferee would
be unwilling or unable to pay taxes attributed to the Class R
Certificate, or (4) if it has actual knowledge or reason to know that
the proposed transferee will not honor the restrictions on subsequent
transfers of the Class R Certificate set forth in this section 4.02(l)
and in the Transfer Affidavit and Agreement, (D) to conduct a
reasonable investigation of the financial condition of the proposed
transferee and transfer its Ownership Interest in the Class R
Certificate only if, as a result of such investigation, it concludes
that the proposed transferee has historically paid its debts as they
came due and will continue to pay its debts as they come due in the
future, and (E) to provide a certificate attached hereto as Exhibit N
to the Trustee in connection with any transfer of its Ownership
Interest in a Class R Certificate.
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(vi) Each Person holding or acquiring an Ownership
Interest in a Class R Certificate, by purchasing an Ownership
Interest in such Certificate, agrees to give the Trustee written notice
that it is a "pass-through interest holder" within the meaning of
temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately
upon acquiring an Ownership Interest in a Class R Certificate, if it
is, or is holding an Ownership Interest in a Class R Certificate on
behalf of, a "pass-through interest holder".
(vii) Any attempted or purported transfer of any Ownership
Interest in a Class R Certificate in violation of the
provisions of this Section 4.02 shall be absolutely null and void and
shall vest no rights in the purported transferee. If any purported
transferee shall become a Holder of a Class R Certificate in violation
of the provisions of this Section 4.02, then the last preceding
Permitted Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of transfer of such Class R
Certificate. The Trustee shall notify the Servicer upon receipt of
written notice or discovery by a Responsible Officer that the
registration of transfer of a Class R Certificate was not in fact
permitted by this Section 4.02. Knowledge shall not be imputed to the
Trustee with respect to an impermissible transfer in the absence of
such a written notice or discovery by a Responsible Officer. The
Trustee shall be under no liability to any Person for any registration
of transfer of a Class R Certificate that is in fact not permitted by
this Section 4.02 or for making any payments due on such Certificate to
the Holder thereof or taking any other action with respect to such
Holder under the provisions of this Agreement so long as the transfer
was registered after receipt of the related Transfer Affidavit and
Agreement. The Trustee shall be entitled, but not obligated to, recover
from any Holder of a Class R Certificate that was in fact not a
Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class R Certificate at and after either such time
and any and all costs incurred by the Trustee in reversing the
non-permitted transfer. Any such payments so recovered by the Trustee
shall be paid and delivered by the Trustee to the last preceding Holder
of such Certificate.
(viii) If any purported transferee shall become a Holder of
a Class R Certificate in violation of the restrictions in this
Section 4.02, then the Servicer or its designee shall have the right,
without notice to the Holder or any prior Holder of such Class R
Certificate, to sell such Class R Certificate to a purchaser selected
by the Servicer or its designee on such reasonable terms as the
Servicer or its designee may choose. Such purchaser may be the Servicer
itself or any Affiliate of the Servicer. The proceeds of such sale, net
of commissions, expenses and taxes due, if any, will be remitted by the
Servicer to the last preceding purported transferee of such Class R
Certificate, except that in the event that the Servicer determines that
the Holder or any prior Holder of such Class R Certificate may be
liable for any amount due under this Section 4.02 or any other
provision of this Agreement, the Servicer may withhold a corresponding
amount from such remittance as security for such claim. The terms and
conditions of any sale under this clause (viii) shall be determined in
the sole discretion of the Servicer or its designee, and it shall not
be liable to any Person having an Ownership Interest in a Class R
Certificate as a result of its exercise of such discretion.
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(m) The provisions of Section 4.02(l) may be modified, added
to or eliminated, provided that there shall have been delivered to the Trustee
an Opinion of Counsel to the effect that such modification of, addition to or
elimination of such provisions will not cause the transfer to be disregarded
under Treasury Regulation ss.1.860E-1(c), will not cause any of the REMICs
included in the Trust Fund to cease to qualify as a REMIC and will not cause (x)
any of the REMICs included in the Trust Fund to be subject to an entity-level
tax caused by the Transfer of any Ownership Interest in a Class R Certificate to
a Person that is not a Permitted Transferee or (y) a Person other than the
prospective transferee to be subject to a REMIC-related tax caused by the
Transfer of an Ownership Interest in a Class R Certificate to a Person that is
not a Permitted Transferee.
(n) The Trustee and the Servicer shall require the prospective
transferee of any Class R or Class X Certificate to certify (in the form of
Exhibit O hereto) that it is not a pension or benefit plan or individual
retirement arrangement that is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or to Section 4975 of the Code (a
"Plan") or an entity whose underlying assets are deemed to be assets of a Plan
by reason of such plan's or arrangement's investment in the entity, as
determined under U.S. Department of Labor Regulations 29 C.F.R. ss. 2510.3-101
or otherwise.
Section 4.03 Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate, and (b) there is delivered to the Servicer and the
Trustee such security or indemnity as may reasonably be required by each of them
to save each of them harmless, then, in the absence of notice to the Servicer
and the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest, but bearing a number not
contemporaneously outstanding. Upon the issuance of any new Certificate under
this Section 4.03, the Servicer and the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and their fees and expenses connected therewith. Any duplicate
Certificate issued pursuant to this Section 4.03 shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the mutilated, destroyed, lost or stolen Certificate shall be
found at any time.
Section 4.04 Persons Deemed Owners. Prior to due presentation
of a Certificate for registration of transfer and subject to the provisions of
Section 4.02 and Article X, the Servicer, the Back-up Servicer, the Depositor,
the Unaffiliated Seller and the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving remittances pursuant to Section 6.05 and for all other purposes
whatsoever, and the Servicer, the Back-up Servicer, the Depositor, the
Unaffiliated Seller and the Trustee shall not be affected by notice to the
contrary.
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ARTICLE V
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 5.01 REMIC Matters; The Servicer. (a) The parties
intend that the Trust Fund formed hereunder shall, except for the Capitalized
Interest Account, Supplemental Interest Payment Account and the Pre-Funding
Account, constitute, and that the affairs of the Trust Fund shall be conducted
and this Agreement shall be construed so as to qualify the Trust Fund as, three
separate "real estate mortgage investment conduits" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Servicer covenants and agrees that it shall, to the extent permitted by
applicable law, act as agent (and the Servicer is hereby appointed to act as
agent) on behalf of the Trust Fund and that in such capacity it shall: (a)
prepare and file, or cause to be prepared and filed, all required federal, state
and local tax returns for each REMIC using a calendar year as the taxable year
for the Trust Fund when and as required by the REMIC Provisions and other
applicable federal, state and local income tax laws; (b) maintain or cause the
maintenance of the books of each REMIC on the accrual method of accounting; (c)
make elections, on behalf of each REMIC, to be treated as a REMIC on the federal
tax return of the Trust Fund for its first taxable year, in accordance with the
REMIC Provisions; provided, however, that such election shall not be made with
respect to the Capitalized Interest Account, the Supplemental Interest Payment
Account and the Pre-Funding Account and shall specifically exclude the
Capitalized Interest Account, the Supplemental Interest Payment Account and the
Pre-Funding Account from the assets for which a REMIC election is made; (d)
prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders all information reports as and when required to be provided
to them in accordance with the REMIC Provisions; (e) conduct the affairs of each
REMIC at all times that any Certificates are outstanding so as to maintain the
status thereof as a REMIC under the REMIC Provisions; and (f) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any REMIC created hereunder.
(b) The Capitalized Interest Account is an "outside reserve"
fund within the meaning of Treasury Regulations Section 1.860G-2(h) and is not
an asset of any REMIC created hereunder. The Unaffiliated Seller is the owner of
the Capitalized Interest Account for purposes of Treasury Regulations Section
1.860G-2(h). For all federal income tax purposes, amounts transferred by the
Capitalized Interest Account to REMIC III, if any, will be treated as amounts
contributed by the Unaffiliated Seller to REMIC III.
(c) In the event that any income tax (including any tax with
regard to "prohibited transactions" of any REMIC created hereunder as defined in
Section 860F of the Code) is imposed on the Trust Fund, such tax shall be
charged against amounts otherwise distributable to the Holders of the Class R or
Class X Certificates on a pro rata basis to the extent hereinafter provided. In
the event that any such tax shall be due and owing at a time when amounts
otherwise distributable to the Holders of the Class R or Class X Certificates
are not available, the Servicer shall pay such tax from its own funds. In such
event, and upon receipt of written instruction from the Servicer, signed by a
Responsible Officer, the Trustee is hereby authorized to retain from amounts
otherwise distributable to the Holders of the Class R and Class X Certificates
on any Distribution Date sufficient funds to reimburse the Servicer for the
payment of such tax (but such obligation shall not prevent the Trustee or any
other appropriate Person from contesting any such tax in appropriate proceedings
and shall prevent the Trustee from withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings).
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(d) The Servicer shall service and administer the Mortgage
Loans in accordance with the Accepted Servicing Practices and shall have full
power and authority to do any and all things not inconsistent therewith in
connection with such servicing and administration which it may deem necessary or
desirable in order to maximize collections on the Mortgage Loans, subject to the
limitations set forth in this Agreement. The Trustee shall furnish the Servicer
with any powers of attorney and other documents necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered by the Trustee, to execute and
deliver, on behalf of itself, the Certificateholders and the Trustee or any of
them, any and all instruments of satisfaction or cancellation, or of partial or
full release or discharge and all other comparable instruments, and to effect
such modifications, waivers, indulgences and other like matters as are in its
judgment necessary or desirable, with respect to the Mortgage Loans and the
Mortgaged Properties and the servicing and administration thereof in order to
maximize collections on the Mortgage Loans subject to the limitations set forth
in this Agreement. The Servicer shall notify the Trustee of any such waiver,
release, discharge, modification, indulgence or other such matter by delivering
to the Trustee an Officer's Certificate certifying that such agreement is in
compliance with this Section 5.01(d) together with the original copy of any
written agreement or other document executed in connection therewith, all of
which written agreements or documents shall, for all purposes, be considered a
part of the related Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. Notwithstanding anything in this
Agreement to the contrary, the Servicer shall not permit any modification with
respect to any Mortgage Loan that would change the Mortgage Interest Rate,
reduce or increase the principal balance, change the lien priority, the original
CLTV or change the final maturity date on or of such Mortgage Loan unless the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Servicer, imminent; provided, however, that the Servicer
shall not extend the final maturity date of any Mortgage Loan beyond the date
which is six months after the latest Final Scheduled Maturity Date for any
outstanding Class of Offered Certificates, unless the Rating Agency Condition is
satisfied with respect thereto.
(e) The relationship of the Servicer (and of any successor to
the Servicer as servicer under this Agreement) to the Trustee under this
Agreement is intended by the parties to be that of an independent contractor and
not that of a joint venturer, partner or agent.
Section 5.02 Collection of Certain Mortgage Loan Payments;
Collection Account. (a) The Servicer shall make its reasonable efforts to
collect all payments called for under the terms and provisions of the Mortgage
Loans, and shall, to the extent such procedures shall be consistent with this
Agreement, follow the Accepted Servicing Practices. Consistent with the
foregoing, the Servicer may in its discretion waive any assumption fees or other
fees which may be collected in the ordinary course of servicing such Mortgage
Loans.
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(b) The Servicer shall establish and maintain in the name of
the Trustee the Collection Account, in trust for the benefit of the
Certificateholders. The Collection Account shall be established and maintained
as an Eligible Account.
(c) The Servicer shall deposit in the Collection Account any
amounts representing Monthly Payments on the Mortgage Loans due and accrued or
to be applied as of a date after the respective Cut-Off Date, and thereafter, on
each Business Day (except as otherwise permitted herein), the following payments
and collections received or made by it (other than in respect of principal
collected and interest due and accrued on the Mortgage Loans on or before the
respective Cut-Off Date):
(i) Payments of interest on the Mortgage Loans;
(ii) Payments of principal of the Mortgage Loans;
(iii) The Loan Repurchase Price of Mortgage Loans
repurchased pursuant to Sections 2.06, 3.03, 5.05, 5.15 or otherwise
hereunder;
(iv) The Substitution Adjustment received in connection
with Mortgage Loans for which Qualified Substitute Mortgage Loans are
received pursuant to Sections 2.06 and 3.03;
(v) All Liquidation Proceeds; and
(vi) All Insurance Proceeds (including, for this purpose,
any amounts required to be deposited by the Servicer pursuant to the
last sentence of Section 5.04).
It is understood that the Servicer need not deposit amounts
representing fees, prepayment premiums, late payment charges or extension or
other administrative charges payable by Mortgagors, or amounts received by the
Servicer for the account of Mortgagors for application towards the payment of
taxes, insurance premiums, assessments and similar items.
(d) The Trustee shall invest any funds in the Collection
Account in Permitted Investments as directed in writing by the Servicer, which
shall mature not later than the Business Day next preceding the Servicer
Remittance Date next following the date of such investment (except that any
investment held by the Trustee may mature on such Servicer Remittance Date) and
shall not be sold or disposed of prior to its maturity. All net income and gain
realized from any such investment shall be for the benefit of the Servicer and
shall be subject to its withdrawal or order on a Distribution Date. The Servicer
shall deposit from its own funds the amount of any loss, to the extent not
offset by investment income or earnings, in the Collection Account upon the
realization of such loss. In the event that the Servicer fails to provide
written investment instructions, the Trustee shall invest such funds pursuant to
clause (v) of the definition of Permitted Investments.
Section 5.03 Permitted Withdrawals from the Collection
Account. The Trustee shall make withdrawals from the Collection Account, on any
Distribution Date, for the following purposes:
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(a) to reimburse the Servicer for Liquidation Expenses
theretofore incurred in respect of any Mortgage Loan in an amount not to exceed
the amount of the sum of the related Insurance Proceeds and Liquidation Proceeds
deposited in the Collection Account pursuant to Section 5.02(c)(v)-(vi);
(b) to reimburse the Servicer for amounts expended by it
pursuant to Section 5.04 in good faith in connection with the restoration of
damaged property, in an amount not to exceed the amount of the related Insurance
Proceeds and Liquidation Proceeds (net of withdrawals pursuant to clause (a)
above) and amounts representing proceeds of other insurance policies covering
the property subject to the related Mortgage deposited in the Collection Account
pursuant to Section 5.02(c)(v)-(vi);
(c) to pay to the Unaffiliated Seller amounts received in
respect of any Deleted Mortgage Loan purchased or substituted for by the
Unaffiliated Seller to the extent that the distribution to the
Certificateholders of any such amounts on the Distribution Date upon which the
proceeds of such purchase are distributed to the Certificateholders would make
the total amount distributed in respect of any such Mortgage Loan on such
Distribution Date greater than the Loan Repurchase Price or the Substitution
Adjustment therefor;
(d) to reimburse the Servicer for unreimbursed Servicing
Advances, without interest, with respect to the Mortgage Loans for which it has
made a Servicing Advance, from subsequent collections with respect to interest
on such Mortgage Loans and from Liquidation Proceeds, Insurance Proceeds and/or
the Loan Repurchase Price or Substitution Adjustment of or relating to such
Mortgage Loans;
(e) to reimburse the Servicer for any Periodic Advances, such
reimbursement to be made from any collections in respect of the related Mortgage
Loan with respect to which such Periodic Advance was made;
(f) to withdraw any amount received from a Mortgagor that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court having competent jurisdiction;
(g) to withdraw any funds deposited in the Collection Account
that were not required to be deposited therein;
(h) to pay the Servicer Servicing Compensation pursuant to
Section 5.08 hereof to the extent not retained or paid; and
(i) to remit funds to the Distribution Account pursuant to
Section 6.01(c) hereof.
The Servicer shall keep and maintain a separate accounting for
each Mortgage Loan for the purpose of accounting for withdrawals from the
Collection Account pursuant to subclause (a).
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Section 5.04 Hazard Insurance Policies; Property Protection
Expenses. (a) The Servicer shall cause to be maintained for each Mortgage Loan a
hazard insurance policy with extended coverage which contains a standard
mortgagee's clause with an appropriate endorsement in an amount equal to the
lesser of (a) the maximum insurable value of the related Mortgaged Property or
(b) the sum of the Principal Balance of such Mortgage Loan plus the outstanding
balance of any mortgage loan senior to such Mortgage Loan, but in no event shall
such amount be less than is necessary to prevent the Mortgagor from becoming a
coinsurer thereunder. The Servicer shall also maintain on property acquired upon
foreclosure, or by deed in lieu of foreclosure, hazard insurance with extended
coverage in an amount which is at least equal to the lesser of (i) the maximum
insurable value from time to time of the improvements which are a part of such
property or (ii) the combined Principal Balance of such Mortgage Loan and the
principal balance of any mortgage loan senior to such Mortgage Loan at the time
of such foreclosure plus accrued interest and the good-faith estimate of the
Servicer of related Liquidation Expenses to be incurred in connection therewith.
Amounts collected by the Servicer under any such policies shall be deposited in
the Collection Account to the extent that they constitute Liquidation Proceeds
or Insurance Proceeds. Each hazard insurance policy shall contain a standard
mortgage clause naming the Originator, its successors and assigns, as mortgagee.
Subject to Section 5.04(c), the Servicer shall be under no obligation to require
that any Mortgagor maintain earthquake or flood or other additional insurance
and shall be under no obligation itself to maintain any such additional
insurance on property acquired in respect of a Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
(b) If the Servicer shall obtain and maintain a blanket policy
issued by an insurer acceptable to the Rating Agencies insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in Section 5.04(a), it being understood
and agreed that such policy may contain a deductible clause, in which case the
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property a policy complying with Section 5.04(a), and there
shall have been a loss which would have been covered by such policy, deposit in
the Collection Account the amount not otherwise payable under the blanket policy
because of such deductible clause.
(c) If the Mortgaged Property or REO Property is located at
the time of origination of the Mortgage Loan in a federally designated special
flood hazard area (and if the flood insurance policy referenced herein has been
made available), the Servicer will cause to be maintained flood insurance in
respect thereof. Such flood insurance shall be in an amount equal to the lesser
of (i) the Principal Balance of the related Mortgage Loan and the balance of the
related first lien, if any, (ii) the maximum insurable value of the related
Mortgaged Property, and (iii) the maximum amount of such insurance available for
the related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is
participating in such program).
Section 5.05 Assumption and Modification Agreements. In any
case in which a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall exercise its right to accelerate the maturity of
the related Mortgage Loan and require that the Principal Balance thereof be paid
in full on or prior to such conveyance by the Mortgagor under any "due-on-sale"
clause applicable thereto. If such "due-on-sale" clause, by its terms, is not
operable or the Servicer is prevented, as provided in the last paragraph of this
Section 5.05, from enforcing any such clause, the Servicer is authorized to take
or enter into an assumption and modification agreement from or with the Person
to whom such property has been or is about to be conveyed, pursuant to which
such Person becomes liable under the Mortgage Note and the Mortgagor remains
liable thereon or, if the Servicer in its reasonable judgment finds it
appropriate, is released from liability thereon. The Servicer shall notify the
Trustee and the Collateral Agent that any assumption and modification agreement
has been completed by delivering to the Trustee an Officer's Certificate
certifying that such agreement is in compliance with this Section 5.05 together
with the original copy of such assumption and modification agreement. Any such
assumption and modification agreement shall, for all purposes, be considered a
part of the related Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. In connection with any such agreement,
the then current Mortgage Interest Rate thereon shall not be increased or
decreased. Any fee collected by the Servicer for entering into any such
agreement will be retained by the Servicer as additional servicing compensation.
At its sole election, the Servicer may purchase from the Trust Fund any Mortgage
Loan that has been assumed in accordance with this Section 5.05 within one month
after the date of such assumption at a price equal to the greater of (i) the
fair market value of such Mortgage Loan (as determined by the Servicer in its
good faith judgment) and (ii) the Loan Repurchase Price. Such amount, if any,
shall be deposited into the Collection Account in the Due Period in which such
repurchase is made.
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Notwithstanding the foregoing paragraph of this Section 5.05
or any other provision of this Agreement, the Servicer shall not be deemed to be
in default, breach or any other violation of its obligations hereunder by reason
of any assumption of a Mortgage Loan, or transfer of any Mortgaged Property
without the assumption thereof, by operation of law or any assumption or
transfer which the Servicer reasonably believes it may be restricted by law from
preventing for any reason whatsoever.
Section 5.06 Realization Upon Defaulted Mortgage Loans. (a)
The Servicer shall foreclose upon or otherwise comparably convert to ownership
Mortgaged Properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 5.02(a). Prior to
conducting any sale in a foreclosure proceeding or recording a deed-in-lieu of
foreclosure with respect to any Mortgaged Property, the Servicer shall cause an
environmental review to be performed, in accordance with Accepted Servicing
Practices on the Mortgaged Property by a company such as Equifax, Inc. or
Toxicheck. In connection with such foreclosure or other conversion, the Servicer
shall follow such practices (including, in the case of any default on a related
senior mortgage loan, the advancing of funds to correct such default) and
procedures which are consistent with Accepted Servicing Practices as it shall
deem necessary or advisable and as shall be normal and usual in its general
first and second mortgage loan servicing activities. The foregoing is subject to
the proviso that the Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the correction of any default on a
related senior mortgage loan or restoration of any property unless, in the
reasonable judgment of the Servicer, such expenses will be recoverable from
Liquidation Proceeds.
(b) In the event that title to any Mortgaged Property is
acquired in foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be issued to the Trustee, or to its nominee on behalf
of Certificateholders. With respect to any REO Property, the Servicer either
itself or through an agent selected by the Servicer shall manage, conserve,
protect and operate such REO Property in the same manner and to such extent as
is customary in the locality where such REO Property is located. Any net income
generated from the REO Property and the proceeds from a sale of any REO Property
shall be deposited in the Collection Account. Any expenses incurred by the
Servicer pursuant to its obligations with respect to any REO Property shall
constitute Servicing Advances. In the event that the Trust Fund acquires any
Mortgaged Property as aforesaid or otherwise in connection with a default or
imminent default on a Mortgage Loan, the Servicer shall: (i) dispose of such
Mortgaged Property prior to the end of the third taxable year after its
acquisition by the Trust Fund or (ii) in its capacity as Tax Matters Person,
request more than 60 days prior to the date on which such 3 year period would
otherwise expire, an extension of the 3 year period; provided, however, that in
the event the Servicer shall have furnished the Trustee with an Opinion of
Counsel to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to the third taxable year after its acquisition will not
result in the imposition of taxes on "prohibited transactions" of the Trust Fund
as defined in Section 860F of the Code or cause the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding, such
disposition or extension shall not be required.
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(c) Any Insurance Proceeds or Liquidation Proceeds received
with respect to a Mortgage Loan or REO Property (other than received in
connection with a purchase by the Servicer of all the Mortgage Loans and REO
Properties in the Trust Fund pursuant to Section 8.01(b)) will be applied in the
following order of priority, in each case to the extent of available funds:
first, to pay the Servicer any accrued and unpaid Servicing Fees relating to
such Mortgage Loan; second, to reimburse the Servicer or any Subservicer for any
related unreimbursed Servicing Advances, and any related unreimbursed Periodic
Advances theretofore funded by the Servicer or any Subservicer from its own
funds, in each case, with respect to the related Mortgage Loan; third, to
accrued and unpaid interest on the Mortgage Loan, at the Mortgage Interest Rate
(or at such lesser rate as may be in effect for such Mortgage Loan pursuant to
application of the Civil Relief Act) on the Principal Balance of such Mortgage
Loan, to the date such Mortgage Loan is determined to be a Liquidated Mortgage
Loan if it is a Liquidated Mortgage Loan, or to the Due Date in the Due Period
prior to the Distribution Date on which such amounts are to be distributed if
such determination has not yet been made, minus any unpaid Servicing Fees with
respect to such Mortgage Loan; fourth, to the extent of the Principal Balance of
the Mortgage Loan outstanding immediately prior to the receipt of such proceeds,
as a recovery of principal of the related Mortgage Loan; and fifth, to any
prepayment or late payment charges or penalty interest payable in connection
with the receipt of such proceeds and to all other fees and charges due and
payable with respect to such Mortgage Loan. The amount of any gross Insurance
Proceeds and Liquidation Proceeds received with respect to any Mortgage Loan or
REO Property minus the amount of any unreimbursed Servicing Advances,
unreimbursed Periodic Advances or unpaid Servicing Fees, in each case, with
respect to the related Mortgage Loan, are the "Net Recovery Proceeds" with
respect to such Mortgage Loan or REO Property.
Section 5.07 Trustee to Cooperate. Upon the payment in full of
the Principal Balance of any Mortgage Loan, the Servicer will notify the Trustee
by a certification (which certification shall include a statement to the effect
that all amounts received in connection with such payment which are required to
be deposited in the Collection Account pursuant to Section 5.02 have been so
deposited) of a Servicing Officer. Upon any such payment in full, the Servicer
is authorized to execute, pursuant to the authorization contained in Section
5.01, an instrument of satisfaction regarding the related Mortgage, which
instrument of satisfaction shall be recorded by the Servicer if required by
applicable law and be delivered to the Person entitled thereto, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction shall be reimbursed from the Collection Account. From
time to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan, the Collateral Agent on behalf of the Trustee shall, upon request of the
Servicer and delivery to the Trustee of a trust receipt signed by a Servicing
Officer, release the related Mortgage File to the Servicer and shall execute
such documents as shall be necessary for the prosecution of any such
proceedings. Such trust receipt shall obligate the Servicer to return the
Mortgage File to the Collateral Agent on behalf of the Trustee when the need
therefor by the Servicer no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the trust receipt shall be released by
the Collateral Agent on behalf of the Trustee to the Servicer.
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Section 5.08 Servicing Compensation; Payment of Certain
Expenses by Servicer. On each Distribution Date, the Servicer shall be entitled
to receive, and the Trustee shall pay in the event such servicing compensation
is not retained by the Servicer, out of collections on the Mortgage Loans for
the Due Period, as servicing compensation for such Due Period, an amount (the
"Monthly Servicing Fee") equal to the product of one-twelfth of the Servicing
Fee. Additional servicing compensation in the form of assumption fees, late
payment charges or extension and other administrative charges shall be retained
by the Servicer. The Servicer shall be required to pay all expenses incurred by
it in connection with its activities hereunder (including payment of all fees
and expenses of the Subservicer and payment of the Trustee Fee to the extent
that monies in the Collection Account are insufficient therefor, as provided in
Section 9.05 hereof, and all other fees and expenses not expressly stated
hereunder to be payable by or from another source) and shall not be entitled to
reimbursement therefor except as specifically provided herein.
Section 5.09 Annual Statement as to Compliance. (a) The
Servicer will deliver to the Depositor, the Trustee, the Rating Agencies and
each Certificateholder, on or before March 15 of each year, beginning March 15,
2003, an Officer's Certificate of the Servicer stating that (a) a review of the
activities of the Servicer during the preceding calendar year and of its
performance under this Agreement has been made under such Responsible Officer's
supervision and (b) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all its material obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
Section 5.10 Annual Independent Public Accountants' Servicing
Report. On or before March 15 of each year, beginning March 15, 2003, the
Servicer at its expense shall cause a firm of independent public accountants
that is a member of the American Institute of Certified Public Accountants (who
may also render other services to the Servicer) to furnish a report to the
Depositor, the Trustee, the Rating Agencies and each Certificateholder to the
effect that such firm has examined certain documents and records relating to the
servicing of mortgage loans under pooling and servicing agreements (including
this Agreement) substantially similar to this Agreement, and that such
examination, which has been conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers (to the extent that the
procedures in such audit guide are applicable to the servicing obligations set
forth in such agreements), has disclosed no items of noncompliance with the
provisions of this Agreement which, in the opinion of such firm, are material,
except for such items of noncompliance as shall be set forth in such report.
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Section 5.11 Access to Certain Documentation. Each of the
Servicer, the Depositor and the Unaffiliated Seller shall permit the designated
agents or representatives of each Certificateholder and the Trustee (i) to
examine and make copies of and abstracts from all books, records and documents
(including computer tapes and disks) in the possession or under the control of
the Servicer, the Depositor or the Unaffiliated Seller relating to the Mortgage
Loans and (ii) to visit the offices and properties of the Servicer and of the
Unaffiliated Seller for the purpose of examining such materials and to discuss
matters relating to the Mortgage Loans and the Servicer's, the Depositor's and
the Unaffiliated Seller's performance under this Agreement with any of the
officers or employees of the Servicer, the Depositor and the Unaffiliated Seller
having knowledge thereof and with the independent public accountants of the
Servicer (and by this provision the Servicer and the Unaffiliated Seller each
authorize their respective accountants to discuss their respective finances and
affairs), all at such reasonable times, as often as may be reasonably requested
and without charge to such Certificateholder or the Trustee.
Section 5.12 Maintenance of Fidelity Bond. The Servicer shall
during the term of its service as servicer maintain in force a fidelity bond and
errors and omissions insurance in respect of its officers, employees or agents.
Such bond and insurance shall comply with the requirements from time to time of
the FNMA for Persons performing servicing for mortgage loans purchased by such
association.
Section 5.13 The Subservicers. The parties acknowledge that
the Servicer intends to appoint the Subservicers as the Servicer's agents for
the purpose of servicing on the Servicer's behalf such of the Mortgage Loans as
were originated by such subservicer. The Servicer agrees to cause the
Subservicers to service such Mortgage Loans in a manner consistent with the
Accepted Servicing Practices set forth in this Agreement, and agrees that
receipt by the Subservicers of any and all amounts which by the terms hereof are
required to be deposited in the Collection Account shall constitute receipt
thereof by the Servicer for all purposes hereof as of the date so received by
the Subservicers. Notwithstanding such designation of the Subservicers, the
Servicer agrees that it is, and it shall remain, fully obligated under the terms
hereof as Servicer with respect to all such Mortgage Loans, and nothing herein
shall relieve or release the Servicer from its obligations to the other parties
hereto to service such Mortgage Loans in the manner provided in this Agreement.
Section 5.14 Reports to the Trustee; Collection Account
Statements. Not later than fifteen (15) days after each Distribution Date, the
Servicer shall provide to the Trustee a statement, certified by a Servicing
Officer, setting forth the status of the Collection Account as of the close of
business on the related Distribution Date, stating that all distributions
required by this Agreement to be made by the Servicer on behalf of the Trustee
have been made (or if any required distribution has not been made by the
Servicer, specifying the nature and status thereof) and showing, for the period
covered by such statement, the aggregate of deposits into and withdrawals from
the Collection Account for each category of deposit specified in Section 5.02
and each category of withdrawal specified in Section 5.03 and the aggregate of
deposits into the Collection Account as specified in Section 6.01(c). Such
statement shall also state the aggregate unpaid principal balance of all the
Mortgage Loans as of the close of business on the last day of the month
preceding the month in which such Distribution Date occurs. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon
request.
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Section 5.15 Optional Purchase of Defaulted Mortgage Loans.
(a) The Unaffiliated Seller, in its sole discretion, shall have the right, after
the aggregate Principal Balance of defaulted Mortgage Loans exceeds 1.50% of the
Maximum Pool Principal Balance, to elect (by written notice sent to the
Trustee), but shall not be obligated, to purchase for its own account from the
Trust Fund any Mortgage Loan which is one hundred and eighty (180) days or more
Delinquent in the manner and at the price specified in Section 2.06(c). The
purchase price for any Mortgage Loan purchased hereunder shall be deposited in
the Collection Account and the Trustee, upon receipt of such deposit, shall
release or cause to be released to the Unaffiliated Seller the related Trustee's
Mortgage File and shall execute and deliver such instruments of transfer or
assignment prepared by the Unaffiliated Seller, in each case without recourse,
as shall be necessary to vest in the Unaffiliated Seller any Mortgage Loan
released pursuant hereto and the Unaffiliated Seller shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan and all
security and documents related thereto. Such assignment shall be an assignment
outright and not for security. The Unaffiliated Seller shall thereupon own such
Mortgage Loan, and all security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto.
(b) If the Unaffiliated Seller shall have repurchased Mortgage
Loans under this Section 5.15 in an aggregate Principal Balance equal to 2.00%
of the Maximum Pool Principal Balance, the Unaffiliated Seller may not
thereafter exercise its right under this Section 5.15 to purchase any Mortgage
Loan unless it delivers to the Trustee an Opinion of Counsel that such
repurchase will not have a material adverse effect on the characterization as a
sale for bankruptcy purposes of the transfer of the Mortgage Loans from the
Unaffiliated Seller to the Depositor. Notwithstanding the foregoing, the
Unaffiliated Seller shall in no event repurchase Mortgage Loans pursuant to this
Section 5.15 in an aggregate Principal Balance in excess of 10.00% of the
Maximum Pool Principal Balance.
Section 5.16 Reports to be Provided by the Servicer. (a) In
connection with the transfer of the Certificates, the Trustee on behalf of any
Certificateholder may request that the Servicer make available to any
prospective Certificateholder annual financial statements of the Servicer for
one or more of the most recently completed five fiscal years for which such
statements are available, which request shall not be unreasonably denied or
unreasonably delayed.
(b) The Servicer also agrees to make available on a reasonable
basis to any prospective Certificateholder a knowledgeable financial or
accounting officer for the purpose of answering reasonable questions respecting
recent developments affecting the Servicer or the financial statements of the
Servicer and to permit such prospective Certificateholder to inspect the
Servicer's servicing facilities during normal business hours for the purpose of
satisfying such prospective Certificateholder that the Servicer has the ability
to service the Mortgage Loans in accordance with this Agreement.
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Section 5.17 Adjustment of Servicing Compensation in Respect
of Prepaid Mortgage Loans. The Monthly Servicing Fee that the Servicer shall be
entitled to receive with respect to all of the Mortgage Loans and each
Distribution Date shall be offset on such Distribution Date by an amount equal
to the aggregate Prepayment Interest Shortfall with respect to all Mortgage
Loans which were subjects of Principal Prepayments during the month preceding
the month of such Distribution Date. The amount of any offset against the
Monthly Servicing Fee with respect to any Distribution Date under this Section
5.17 shall be limited to the Monthly Servicing Fee otherwise payable to the
Servicer (without adjustment on account of Prepayment Interest Shortfalls) with
respect to such Distribution Date, and the rights of the Certificateholders to
the offset of the aggregate Prepayment Interest Shortfalls shall not be
cumulative.
Section 5.18 Periodic Advances; Special Advance. (a) If, on
any Servicer Remittance Date, the Servicer determines that any Monthly Payments
due on the Due Date immediately preceding such Servicer Remittance Date have not
been received as of the close of business on the Business Day preceding such
Servicer Remittance Date, the Servicer shall determine the amount of any
Periodic Advance required to be made with respect to the related Distribution
Date. The Servicer shall include in the amount to be deposited in the Collection
Account on such Servicer Remittance Date an amount equal to the Periodic
Advance, if any, which deposit may be made in whole or in part from funds in the
Collection Account being held for future distribution or withdrawal on or in
connection with Distribution Dates in subsequent months. Any funds being held
for future distribution to Certificateholders and so used shall be replaced by
the Servicer from its own funds by deposit in the Collection Account on or
before the Business Day preceding the next Servicer Remittance Date on which the
funds in the Collection Account shall be less than the amount necessary to pay
in full the distributions required to be made on such date; provided, that if
such funds are not sufficient the Servicer will use its own funds to the extent
necessary to fulfill its replacement or advance obligation.
The Servicer shall designate on its records the specific
Mortgage Loans and related installments (or portions thereof) as to which such
Periodic Advance shall be deemed to have been made, such determination being
conclusive for purposes of withdrawals from the Collection Account pursuant to
Section 5.03.
(b) In addition to the Periodic Advances the Servicer shall
make a special advance (the "Special Advance") on the Servicer Remittance Date
occurring in January 2003, with respect to interest on Mortgage Loans not having
their first payment due until after December 2002. The Special Advance will be
deposited into the Interest Reserve Account and, on the immediately succeeding
Distribution Date, an amount equal to the lesser of (1) the difference of (i)
the aggregate Class Monthly Interest Amount for each Class of Offered
Certificates for such Distribution Date over (ii) the sum of (x) the amount of
interest collected for the first Due Period and (y) the amount on deposit in the
Interest Reserve Account immediately prior to such Special Advance and (2) an
amount equal to the amount of interest that would have accrued on all such
Mortgage Loans from the applicable Cut-Off Date to its corresponding scheduled
payment date, assuming it had a payment date in December 2002, will be
transferred by the Indenture Trustee from the Interest Reserve Account to the
Distribution Account and treated as a portion of the Interest Remittance Amount.
Any funds remaining in the Interest Reserve Account after the immediately
succeeding Distribution Date shall be remitted to the Servicer on such
Distribution Date. The Servicer shall also make the Special Advance required by
Section 2.03(f) in respect of each Subsequent Transfer Date. The Special Advance
shall be made without regard to recoverability, and shall not be reimbursable,
except as set forth in the preceding sentences. In no event shall the Trustee,
as successor Servicer, be liable for the payment of the Special Advance except
to the extent of the amount on deposit in the Interest Reserve Account.
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Section 5.19 Indemnification; Third Party Claims. (a) The
Servicer agrees to indemnify and to hold each of the Depositor, the Trustee, the
Back-up Servicer, the Collateral Agent, the Unaffiliated Seller and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Depositor, the Trustee, the Back-up Servicer, the
Collateral Agent, the Unaffiliated Seller and any Certificateholder may sustain
in any way related to the failure of the Servicer to perform its duties and
service the Mortgage Loans in compliance with the terms of this Agreement. Each
indemnified party and the Servicer shall immediately notify the other
indemnified parties if a claim is made by a third party with respect to this
Agreement, and the Servicer shall assume the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Depositor, the Servicer, the Back-up Servicer, the Trustee, the
Unaffiliated Seller and/or a Certificateholder in respect of such claim. The
obligations of the Servicer under this Section 5.19 arising prior to any
resignation or termination of the Servicer hereunder shall survive the
resignation or termination of the Servicer.
(b) Upon receipt of written instruction from the Servicer,
signed by a Servicing Officer, the Trustee may, if necessary, reimburse the
Servicer from amounts otherwise distributable on the Class X and R Certificates
for all amounts advanced by it pursuant to Section 4.04 of the Unaffiliated
Seller's Agreement, except when the claim relates directly to the failure of the
Servicer, if it is, or is an Affiliate of, the Unaffiliated Seller, to perform
its obligations to service and administer the Mortgages in compliance with the
terms of the Unaffiliated Seller's Agreement, or the failure of the Unaffiliated
Seller to perform its duties in compliance with the terms of this Agreement.
(c) Upon receipt of written instruction from the Servicer,
signed by a Servicing Officer, the Trustee shall reimburse the Unaffiliated
Seller from amounts otherwise distributable on the Class X and R Certificates
for all amounts advanced by the Unaffiliated Seller pursuant to the second
sentence of Section 4.04(a) of the Unaffiliated Seller's Agreement except when
the relevant claim relates directly to the failure of the Unaffiliated Seller to
perform its duties in compliance with the terms of the Unaffiliated Seller's
Agreement.
Section 5.20 Maintenance of Corporate Existence and Licenses;
Merger or Consolidation of the Servicer. (a) The Servicer will keep in full
effect its existence, rights and franchises as a corporation, will obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement and will otherwise operate its business so as to cause the
representations and warranties under Section 3.01 to be true and correct at all
times under this Agreement.
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(b) Any Person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer, shall be an established mortgage loan servicing
institution that has a net worth of at least $15,000,000 and is a Permitted
Transferee, and in all events shall be the successor of the Servicer without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. The Servicer
shall send notice of any such merger or consolidation to the Trustee.
Section 5.21 Assignment of Agreement by Servicer; Servicer Not
to Resign. The Servicer shall not assign this Agreement nor resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Back-up Servicer, the Unaffiliated Seller and the Trustee;
provided, however, that in the event the Servicer is terminated pursuant to
Section 7.01 hereof, the consent of the Unaffiliated Seller shall no longer be
required, or upon the determination that the Servicer's duties hereunder are no
longer permissible under applicable law and that such incapacity cannot be cured
by the Servicer without incurring unreasonable expense. Any such determination
that the Servicer's duties hereunder are no longer permissible under applicable
law permitting the resignation of the Servicer shall be evidenced by a written
Opinion of Counsel (who may be outside counsel for the Servicer) to such effect
delivered to the Trustee, the Back-up Servicer, the Unaffiliated Seller and the
Depositor. No such resignation shall become effective until the Trustee or a
successor appointed in accordance with the terms of this Agreement has assumed
the Servicer's responsibilities and obligations hereunder in accordance with
Section 7.02. The Servicer shall provide the Trustee, the Back-up Servicer and
the Rating Agencies with 30 days prior written notice of its intention to resign
pursuant to this Section 5.21.
Section 5.22 Periodic Filings with the Securities and Exchange
Commission; Additional Information. The Trustee shall prepare or cause to be
prepared, and shall execute as trustee on behalf of the Trust, for filing with
the Commission (other than the initial Current Report on Form 8-K to be filed by
the Depositor in connection with the issuance of the Certificates) any and all
reports, statements and information respecting the Trust and/or the Certificates
required to be filed, and shall solicit any and all proxies of the
Certificateholders whenever such proxies are required to be solicited, pursuant
to the Securities Exchange Act of 1934, as amended. Unless otherwise advised by
the Servicer (with the consent of the Depositor), the reports to be filed shall
consist only of the following: 8-K reports attaching the related Servicer
Remittance Report, to be filed in January of 2003 through December of 2003, a
Form 10-K to be filed no later than March 31 of 2003, including any accountant's
report referred to in Section 5.10, and a Form 15 to be filed in January 2003.
The Servicer shall prepare, execute and deliver to the Trustee for filing with
the Commission no later than March 15 of each year in which a Form 10-K is filed
with the Commission the certification required under Section 302(a) of the
Xxxxxxxx-Xxxxx Act of 2002 (as such may be amended from time to time) and any
rules or regulations promulgated with respect thereto (which certification shall
be executed by the Servicer). Fees and expenses incurred by the Trustee in
connection with the foregoing shall be reimbursed pursuant to Section 9.05 and
shall not be paid by the Trust.
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The Servicer agrees to promptly furnish to the Trustee, from
time to time upon request, such further information, reports and financial
statements as the Trustee deems appropriate to prepare and file all necessary
reports with the Securities and Exchange Commission.
ARTICLE VI
DISTRIBUTIONS AND PAYMENTS
Section 6.01 Establishment of Accounts; Withdrawals from
Accounts; Deposits to the Distribution Account. (a) The Trustee shall establish
and maintain a Distribution Account which shall be titled "Distribution Account,
JPMorgan Chase Bank, as trustee for the registered holders of ABFS Mortgage Loan
Trust 2002-4, Mortgage Pass-Through Certificates, Series 2002-4", which account
shall be an Eligible Account held by the Trustee on behalf of the
Certificateholders. The Trustee shall establish and maintain on behalf of the
Certificateholders the Interest Reserve Account which shall be titled "Interest
Reserve Account, JPMorgan Chase Bank, as trustee for the registered holders of
ABFS Mortgage Loan Trust 2002-4, Mortgage Pass-Through Certificates, Series
2002-4" which account shall be an Eligible Account. The Trustee shall establish
and maintain on behalf of the Certificateholders the Pre-Funding Account which
shall be titled "Pre-Funding Account, JPMorgan Chase Bank, as trustee for the
registered holders of ABFS Mortgage Loan Trust 2002-4, Mortgage Pass-Through
Certificates, Series 2002-4", which account shall be an Eligible Account, and
the Capitalized Interest Account which shall be titled "Capitalized Interest
Account, JPMorgan Chase Bank, as trustee for the registered holders of ABFS
Mortgage Loan Trust 2002-4, Mortgage Pass-Through Certificates, Series 2002-4",
which account shall be an Eligible Account. Upon receipt of the proceeds of the
sale of the Certificates, on the Closing Date, the Trustee shall, upon the
Unaffiliated Seller's direction, from the proceeds of the sale of the
Certificates, deposit, on behalf of the Certificateholders in the Interest
Reserve Account, an amount equal to $1,690,834.21. Upon receipt of the proceeds
of the sale of the Certificates, on the Closing Date, the Trustee shall, upon
the Unaffiliated Seller's direction, from the proceeds of the sale of the
Certificates, deposit, on behalf of the Certificateholders (i) in the
Pre-Funding Account, the Original Pre-Funded Amount, and (ii) in the Capitalized
Interest Account, an amount equal to zero; provided, that, in the event that the
Pre-Funding Period has not ended by the close of business on December 31, 2002,
the Servicer, on behalf of the Originators, will deposit into the Capitalized
Interest Account on the Servicer Remittance Date in January 2003 an amount equal
to three-months' interest calculated at the Adjusted Pass-Through Rate on the
Pre-Funding Amount (net of any Pre-Funding Earnings) as of the close of business
on December 31, 2002. Amounts on deposit in the Interest Reserve Account shall
be invested by the Trustee, at the direction of the Servicer in Permitted
Investments. In the event that the Servicer fails to provide written investment
instructions, the Trustee shall invest such funds pursuant to clause (v) of the
definition of Permitted Investments. Any such Permitted Investment shall mature
no later than the Servicer Remittance Date. All income realized from any such
Permitted Investment shall be for the benefit of the Servicer as additional
servicing compensation. The amount of any losses incurred in respect of any such
Permitted Investment shall be deposited in the Interest Reserve Account by the
Servicer out if its own funds immediately as realized.
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(b) The Servicer shall direct the Trustee in writing to invest
the funds in the Distribution Account only in Permitted Investments. Any such
Permitted Investment shall mature no later than one Business Day prior to the
Distribution Date. No Permitted Investment shall be sold or disposed of prior to
maturity. All income realized from any such Permitted Investment shall be for
the benefit of the Servicer as additional servicing compensation. The amount of
any losses incurred in respect of any such investments shall be deposited in the
Distribution Account by the Servicer out of its own funds immediately as
realized.
(c) On each Servicer Remittance Date, the Servicer shall cause
to be deposited in the Distribution Account, from funds on deposit in the
Collection Account, (a) an amount equal to the Servicer Remittance Amount and
(b) Net Foreclosure Profits, if any with respect to the related Distribution
Date, minus any portion thereof payable to the Servicer pursuant to Section
5.03. On each Servicer Remittance Date, the Servicer shall also deposit into the
Distribution Account any Periodic Advances with respect to the related
Distribution Date calculated in accordance with Section 5.18 and any amounts
required to be deposited in connection with a Subsequent Mortgage Loan pursuant
to Section 2.03(f); on the Servicer Remittance Dates occurring in January 2003
and February 2003 the Servicer also will deposit the Special Advance, if any.
(d) On the January 2003, February 2003 and March 2003
Distribution Dates, the Trustee shall transfer from the Capitalized Interest
Account to the Distribution Account the Capitalized Interest Requirement, if
any, for such Distribution Date.
(e) On the Distribution Date following either the final
Subsequent Transfer Date or March 15, 2003 whichever date is earlier, any
amounts remaining in the Capitalized Interest Account, after taking into account
the transfers in respect of the Distribution Date described in clause (d) above,
shall be paid to the Unaffiliated Seller, and the Capitalized Interest Account
shall be terminated.
(f) On any Subsequent Transfer Date, the Unaffiliated Seller
shall instruct the Trustee in writing to withdraw from the Pre-Funding Account
an amount equal to 100% of the aggregate Principal Balances as of the related
Subsequent Cut-Off Date of the Subsequent Mortgage Loans sold to the Trust on
such Subsequent Transfer Date and pay such amount to or upon the order of the
Unaffiliated Seller upon satisfaction of the conditions set forth in Section
2.03(b) and (c) hereof with respect to such transfer. The Trustee may
conclusively rely on such written instructions from the Unaffiliated Seller.
(g) If the Pre-Funding Amount (exclusive of Pre-Funding
Earnings) has been reduced to $100,000 or less by December 31, 2002, January 31,
2003, or February 28, 2003 then, on the January 2003, February 2003 or March
2003 Distribution Dates, as applicable, after giving effect to any reductions in
the Pre-Funding Amount on such date, the Trustee shall withdraw from the
Pre-Funding Account on such date and deposit in the Distribution Account the
amount on deposit in the Pre-Funding Account other than any Pre-Funding Earnings
and distribute such amount to the Holders of the Certificates in respect of the
Principal Remittance Amount.
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(h) On the January 2003, February 2003 and March 2003
Distribution Dates the Trustee shall transfer from the Pre-Funding Account to
the Distribution Account the Pre-Funding Earnings, if any, applicable as of each
such Distribution Date.
Section 6.02 Permitted Withdrawals From the Distribution
Account. The Trustee shall withdraw or cause to be withdrawn funds from the
Distribution Account for the following purposes:
(a) to effect the distributions described in Section 6.05;
(b) to pay to the Unaffiliated Seller with respect to each
Mortgage Loan or property acquired in respect thereof that has been repurchased
or replaced pursuant to Section 2.05 or 3.03 or to pay to the Servicer with
respect to each Mortgage Loan or property acquired in respect thereof that has
been purchased, all amounts received thereon and not required to be distributed
as of the date on which the related repurchase or purchase price or Principal
Balance was determined;
(c) to pay the Servicer any interest earned on or investment
income earned with respect to funds in the Distribution Account;
(d) to return to the Collection Account any amount deposited
in the Distribution Account that was not required to be deposited therein; and
(e) to clear and terminate the Distribution Account upon
termination of the Trust Fund pursuant to Article VIII.
The Trustee shall keep and maintain a separate accounting for
withdrawals from the Distribution Account pursuant to each of subclauses (a)
through (e) listed above.
Section 6.03 Collection of Money. Except as otherwise
expressly provided herein, the Trustee may demand payment or delivery of all
money and other property payable to or receivable by the Trustee pursuant to
this Agreement, including all payments due on the Mortgage Loans in accordance
with the respective terms and conditions of such Mortgage Loans and required to
be paid over to the Trustee by the Servicer or by any Sub-Servicer. The Trustee
shall hold all such money and property received by it, as part of the Trust Fund
and shall apply it as provided in this Agreement.
Section 6.04 [RESERVED]
Section 6.05 Distributions. No later than 12:00 noon, New
York, New York time on the Servicer Remittance Date, the Servicer shall deliver
to the Trustee and the Back-up Servicer a report in computer-readable form
containing such information as to enable the Trustee to make the distributions
pursuant to clauses (a) through (e) below, and such other information as the
Trustee shall reasonably require. With respect to amounts held in the
Distribution Account, on each Distribution Date, the Trustee shall make the
following allocations, disbursements and transfers in the following order of
priority, and each such allocation, transfer and disbursement shall be treated
as having occurred only after all preceding allocations, transfers and
disbursements have occurred:
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(a) Interest Distributions. On each Distribution Date, the
Interest Remittance Amount will be distributed in the following order of
priority until such amounts have been fully distributed:
(i) first, to the Servicer, the Servicing Fee, to the extent such
amounts were not previously retained by the Servicer;
(ii) second, to the Trustee, the Trustee Fee;
(iii) third, to the Back-up Servicer, the Back-up Servicing Fee and
amounts owing to the Back-up Servicer in connection with the
transfer of servicing after the resignation or removal of the
Servicer, in an amount not to exceed $200,000 in the
aggregate;
(iv) fourth, to each Class of the Senior Certificates, the Class
Monthly Interest Amount and any Class Interest Carryover
Shortfall for such Class on that Distribution Date; provided,
however, that if the Interest Remittance Amount is not
sufficient to make a full distribution of the Class Monthly
Interest Amount and Class Interest Carryover Shortfall with
respect to each Class of Senior Certificates, the Interest
Remittance Amount will be distributed pro rata among each
Class of the Senior Certificates based on the ratio of the
Class Monthly Interest Amount and Class Interest Carryover
Shortfall for such Class to the total amount of Class Monthly
Interest Amount and any Class Interest Carryover Shortfall for
the Senior Certificates;
(v) fifth, to the Class M-1 Certificates, the Class Monthly
Interest Amount for such Class and Distribution Date;
(vi) sixth, to the Class M-2 Certificates, the Class Monthly
Interest Amount for such Class and Distribution Date;
(vii) seventh, to the Class B Certificates, the Class Monthly
Interest Amount for such Class and Distribution Date; and
(viii) eighth, any remainder will be treated as Excess Interest.
(b) Principal Distributions. On each Distribution Date, the
Principal Distribution Amount for that Distribution Date will be distributed in
the following order of priority until such amounts have been fully distributed:
(i) to the Class A Certificates, the Senior Principal Distribution
Amount;
(ii) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount;
(iii) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount;
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(iv) to the Class B Certificates, the Class B Principal
Distribution Amount;
(v) to the Class X Certificates, an amount up to the remaining
Aggregate Principal Balance of the Mortgage Loans; and
(vi) to the Class R Certificates, any remaining amount.
(c) Excess Interest. On each Distribution Date, Excess
Interest will be distributed in the following order of priority until fully
distributed:
(i) an amount equal to the Overcollateralization Increase Amount,
to be applied as part of the Principal Distribution Amount
pursuant to paragraph (b) above;
(ii) to the Class M-1 Certificates, the Class Interest Carryover
Shortfall for such Class;
(iii) to the Class M-1 Certificates, the Class Principal Carryover
Shortfall for such Class;
(iv) to the Class M-2 Certificates, the Class Interest Carryover
Shortfall for such Class;
(v) to the Class M-2 Certificates, the Class Principal Carryover
Shortfall for such Class;
(vi) to the Class B Certificates, the Class Interest Carryover
Shortfall for such Class;
(vii) to the Class B Certificates, the Class Principal Carryover
Shortfall for such Class;
(viii) to the Supplemental Interest Payment Account, as a
distribution to the Holders of the Class X Certificates, the
lesser of (x) the Class X Distribution Amount and (y) the WAC
Excess:
(ix) to the Trustee, to the extent not previously paid, an amount
equal to the sum of all reimbursable expenses incurred in
connection with its duties and obligations under this
Agreement and for any indemnity amounts payable to the Trustee
under this Agreement;
(x) to the Back-up Servicer, to the extent not paid pursuant to
Section 6.05(a), any amounts owing to the Back-up Servicer in
connection with the transfer of servicing after the
resignation or removal of the Servicer;
(xi) to the Servicer to the extent of any unreimbursed Servicing
Advances;
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(xii) to the Class X Certificates, the Class X Distribution Amount
less any amounts thereof applied pursuant to clauses (viii),
(ix), (x) and (xi) above; and
(xiii) to the Class R Certificates, any remaining amount.
(d) Allocation of Pre-Funding Amounts. In addition to the
foregoing, if any Pre-Funding Amount remains on deposit in the Pre-Funding
Account at the end of the Pre-Funding Period, such remaining amount will be
included in the Principal Remittance Amount and applied to the mandatory payment
of the Class A, Class M -1, Class M -2 and Class B Certificates, in accordance
with paragraph (b) above, on the first Distribution Date following the end of
the Pre-Funding Period.
(e) Allocation of Mortgage Loan Interest Shortfalls. On any
Distribution Date, any Mortgage Loan Interest Shortfalls for such Distribution
Date will be allocated as a reduction of the following amounts in the following
order of priority:
(i) to the amount payable to the Class X Certificates; and
(ii) pro rata, as a reduction of the Class Monthly Interest Amount
for the Class A, Class A-IO, Class M-1, Class M-2 and Class B
Certificates, based on the amount of interest to which such
Classes would otherwise be entitled.
(f) Allocation of Applied Realized Loss Amounts. If on any
Distribution Date, after giving effect to all distributions of principal as
described above, the aggregate Certificate Principal Balance of the Offered
Certificates exceeds the Current Pool Principal Balance for that Distribution
Date, the Certificate Principal Balance of the applicable Subordinate
Certificates will be reduced, in inverse order or seniority (beginning with the
Class B Certificates) by an amount equal to that excess, until the Certificate
Principal Balance of such Class of Subordinate Certificates is reduced to zero.
Any Applied Realized Loss Amounts allocated to a Class of Subordinate
Certificates shall be allocated among the Subordinate Certificates of such Class
in proportion to their respective Percentage Interests.
Section 6.06 Investment of Accounts. (a) So long as no Event
of Default shall have occurred and be continuing, and consistent with any
requirements of the Code, all or a portion of any Account held by the Trustee
shall be invested and reinvested by the Trustee, as directed in writing by the
Servicer, in one or more Permitted Investments bearing interest or sold at a
discount. If an Event of Default shall have occurred and be continuing or if the
Servicer does not provide investment directions, the Trustee shall invest all
Accounts in Permitted Investments described in paragraph (v) of the definition
of Permitted Investments. No such investment in any Account shall mature later
than the Business Day immediately preceding the next Distribution Date.
(b) Subject to Section 6.01(b), if any amounts are needed for
disbursement from any Account held by the Trustee and sufficient uninvested
funds are not available to make such disbursement, the Trustee shall cause to be
sold or otherwise converted to cash a sufficient amount of the investments in
such Account. The Trustee shall not be, and the Servicer shall be, liable for
any investment loss or other charge resulting therefrom unless the Trustee's
failure to perform in accordance with this Section 6.06 is the cause of such
loss or charge.
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(c) Subject to Section 9.01 hereof, the Trustee shall not in
any way be held liable by reason of any insufficiency in any Account held by the
Trustee resulting from any investment loss on any Permitted Investment included
therein (except to the extent that the Trustee is the obligor and has defaulted
thereon or as provided in subsection (b) of this Section 6.06).
(d) So long as no Event of Default shall have occurred and be
continuing, all net income and gain realized from investment of, and all
earnings on, funds deposited in any Account shall be for the benefit of the
Servicer as servicing compensation (in addition to the Servicing Fee). The
Servicer shall deposit in the related Account the amount of any loss incurred in
respect of any Permitted Investment held therein which is in excess of the
income and gain thereon immediately upon realization of such loss, without any
right to reimbursement therefor from its own funds.
Section 6.07 Reports. (a) On each Distribution Date the
Trustee shall forward to each Holder, the Underwriters, the Depositor, the
Back-up Servicer and the Rating Agencies the report provided by the Servicer
pursuant to Section 6.05 (the "Servicer Remittance Report"), setting forth
information including, without limitation, the following:
(i) the amount of the distribution with respect to each
Class of Certificates;
(ii) the amount of such distributions allocable to
principal, separately identifying the aggregate amount of any Principal
Prepayments or other unscheduled recoveries of principal included
therein and separately identifying any Overcollateralization Increase
Amounts;
(iii) the amount of such distributions allocable to
interest and the calculation thereof;
(iv) the Certificate Principal Balance of each Class of
Offered Certificates, other than the Class A-IO Certificates, as of
such Distribution Date, together with the principal amount of each such
Class (based on a Certificate in an original principal amount of
$1,000) then outstanding, in each case after giving effect to any
payment of principal on such Distribution Date;
(v) the Class A-IO Notional Balance then outstanding as
of such Distribution Date, after giving effect to any payment of
interest on such Distribution Date;
(vi) the total of any Substitution Adjustments and any
Loan Repurchase Price amounts included in such distribution; and
(vii) the amounts, if any, of any Liquidated Loan Losses
for consumer purpose loans and for business purpose loans for the
related Due Period and cumulative Liquidated Loan Losses since the
Startup Day for consumer purpose loans and for business purpose loans.
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Items (i), (ii) and (iii) above shall, with respect to the
Offered Certificates (other than the Class A-IO Certificates), be presented on
the basis of a Certificate having a $1,000 denomination. In addition, by January
31 of each calendar year following any year during which the Certificates are
outstanding, the Trustee shall furnish a report to each Holder of record if so
requested in writing at any time during each calendar year as to the aggregate
of amounts reported pursuant to (i), (ii) and (iii) with respect to the
Certificates for such calendar year.
(b) All distributions made to the Certificateholders of each
Class as a Class on each Distribution Date will be made on a pro rata basis
among the Certificateholders of each Class on the next preceding Record Date
based on the Percentage Interest represented by their respective Certificates,
and shall be made by wire transfer of immediately available funds to the account
of such Certificateholder at a bank or other entity having appropriate
facilities therefor, if, in the case of a Holder of an Offered Certificate, such
Certificateholder shall own of record Certificates of the same Class which have
denominations aggregating at least $5,000,000 appearing in the Certificate
Register and shall have provided complete wiring instructions at least five
Business Days prior to the Record Date, and otherwise by check mailed to the
address of such Certificateholder appearing in the Certificate Register.
(c) In addition, the Servicer Remittance Report described in
subsection (a) above forwarded by the Trustee to each Holder, to the
Underwriters, to the Servicer, to the Back-up Servicer, to the Depositor and to
the Rating Agencies on each Distribution Date, shall include the following
information with respect to all Mortgage Loans as well as a break out as to (x)
consumer purpose and (y) business purpose Mortgage Loans as of the close of
business on the last Business Day of the prior calendar month (except as
otherwise provided in clause (v) below), which is hereby required to be prepared
by the Servicer and furnished to the Trustee for such purpose on or prior to the
related Servicer Remittance Date:
(i) for the related Due Period, the total number of
Mortgage Loans and the aggregate Principal Balances thereof, together
with the number, aggregate principal balances of such Mortgage Loans
and the percentage (based on the aggregate Principal Balances of the
Mortgage Loans) of the aggregate Principal Balances of such Mortgage
Loans to the aggregate Principal Balance of all Mortgage Loans (A)
31-60 days Delinquent, (B) 61-90 days Delinquent and (C) 91 or more
days Delinquent;
(ii) for the related Due Period, the number, aggregate
Principal Balances of all Mortgage Loans and percentage (based on the
aggregate Principal Balances of the Mortgage Loans) of the aggregate
Principal Balances of such Mortgage Loans to the aggregate Principal
Balance of all Mortgage Loans in foreclosure proceedings and the
number, aggregate Principal Balances of all Mortgage Loans and
percentage (based on the aggregate Principal Balances of the Mortgage
Loans) of any such Mortgage Loans also included in any of the
statistics described in the foregoing clause (i);
(iii) for the related Due Period, the number, aggregate
Principal Balances of all Mortgage Loans and percentage (based on the
aggregate Principal Balances of the Mortgage Loans) of the aggregate
Principal Balances of such Mortgage Loans to the aggregate Principal
Balance of all Mortgage Loans relating to Mortgagors in bankruptcy
proceedings and the number, aggregate Principal Balances of all
Mortgage Loans and percentage (based on the aggregate Principal
Balances of the Mortgage Loans) of any such Mortgage Loans also
included in any of the statistics described in the foregoing clause
(i);
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(iv) for the related Due Period, the number, aggregate
Principal Balances of all Mortgage Loans and percentage (based on the
aggregate Principal Balances of the Mortgage Loans) of the aggregate
Principal Balances of such Mortgage Loans to the aggregate Principal
Balance of all Mortgage Loans relating to REO Properties and the
number, aggregate Principal Balances of all Mortgage Loans and
percentage (based on the aggregate Principal Balances of the Mortgage
Loans) of any such Mortgage Loans also included in any of the
statistics described in the foregoing clause (i);
(v) the weighted average Mortgage Interest Rate as of the
Due Date occurring in the Due Period related to such Distribution Date;
(vi) the weighted average remaining term to stated
maturity of all Mortgage Loans;
(vii) the book value of any REO Property;
(viii) the Cumulative Loss Percentage for the related Due
Period and the aggregate Cumulative Loss Percentage since the Closing
Date;
(ix) the Delinquency Ratio and the Rolling Three Month
Delinquency Rate;
(x) the aggregate Principal Balance of the three largest
Mortgage Loans; and
(xi) the total number of Mortgage Loans and the Aggregate
Principal Balance.
(d) No later than 12:00 noon, New York, New York time on the
Servicer Remittance Date, the Servicer shall deliver to the Back-up Servicer an
electronic transmission acceptable to the Back-up Servicer containing the
Servicer Remittance Report and the Required Information with respect to such
Servicer Remittance Date. No later than three (3) Business Days after each
Servicer Remittance Date, the Back-up Servicer shall use such electronic
transmission acceptable to the Back-up Servicer to (i) confirm that such
electronic transmission is in readable form and (ii) compare the following
information contained in the Servicer Remittance Report with that contained in
the Required Information: (A) the total number of Mortgage Loans, (B) the
aggregate Principal Balance of the Mortgage Loans and (C) the weighted average
Mortgage Interest Rate. The Back-up Servicer shall report any inconsistencies to
the Servicer and the Trustee. The Back-up Servicer shall only review the
information provided by the Servicer in the Servicer Remittance Report and in
the Required Information and its obligation to report any inconsistencies shall
be limited to those apparent from the Back-up Servicer's review thereof and
those relating to the total number of Mortgage Loans, the aggregate Principal
Balance of the Mortgage Loans or the weighted average Mortgage Interest Rate. In
the event that the Back-up Servicer reports any discrepancies, the Servicer and
the Back-up Servicer shall attempt to reconcile such discrepancies prior to the
next succeeding Distribution Date, but in the absence of a reconciliation, the
Servicer's Remittance Report shall control for the purpose of calculations and
distributions with respect to the next succeeding Distribution Date. In the
event that the Back-up Servicer and the Servicer are unable to reconcile
discrepancies with respect to a Servicer's Remittance Report by the next
succeeding Distribution Date, the Servicer shall cause a firm of independent
certified public accountants, at the Servicer's expense, to audit the Servicer's
Remittance Report and, prior to the last day of the month after the month in
which such Servicer's Remittance Report was delivered, reconcile the
discrepancies. The effect, if any, of such reconciliation shall be reflected in
the Servicer's Remittance Report for the next succeeding Distribution Date.
Other than the duties specifically set forth in this Agreement, the Back-up
Servicer shall have no obligations hereunder, including, without limitation, to
supervise, verify, monitor or administer the performance of the Servicer. The
Back-up Servicer shall have no liability for any actions taken or omitted by the
Servicer.
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Section 6.08 Additional Reports by Trustee. (a) The Trustee
shall report to the Depositor and the Servicer with respect to the amount then
held in each Account (including investment earnings accrued or scheduled to
accrue) held by the Trustee and the identity of the investments included
therein, as the Depositor or the Servicer may from time to time request in
writing.
(b) From time to time, at the request of the Rating Agencies,
the Trustee shall report to the Rating Agencies with respect to its actual
knowledge, without independent investigation, of any breach of any of the
representations or warranties relating to individual Mortgage Loans set forth in
any Unaffiliated Seller's Agreement or in Section 3.01 or 3.02 hereof. The
Trustee shall also provide the Rating Agencies such other information as may be
reasonably requested by them.
Section 6.09 Compensating Interest. Not later than the
Servicer Remittance Date, the Servicer shall remit to the Trustee (without right
of reimbursement therefor) for deposit into the Distribution Account an amount
equal to the lesser of (a) the aggregate of the Prepayment Interest Shortfalls
for the related Distribution Date resulting from Principal Prepayments during
the related Due Period and (b) its aggregate Monthly Servicing Fees received in
the related Due Period and shall not have the right to reimbursement therefor
(the "Compensating Interest"); provided, however, that Compensating Interest
with respect to any Mortgage Loan and any Distribution Date shall not exceed the
Servicing Fees due in respect of such Mortgage Loan on such Distribution Date.
Section 6.10 Supplemental Interest Payment Account. (a) The
parties hereto do hereby create and establish a trust, the "ABFS Mortgage Loan
Supplemental Interest Trust 2002-4" (the "Supplemental Interest Trust"). The
Supplemental Interest Trust shall hold a trust account at the corporate trust
office of the Trustee; the "Supplemental Interest Payment Account" to be held by
the Trustee in its name on behalf of the Supplemental Interest Trust. None of
the assets of the Supplemental Interest Trust shall be considered assets of the
REMIC Trust, and any amounts transferred from the REMIC Trust to the
Supplemental Interest Trust shall be treated as distributions with respect to
the Class X Certificates.
(b) On each Distribution Date, the Trustee shall, based on the
distribution information provided by the Servicer, withdraw the Supplemental
Interest Payment Amount Available from the Supplemental Interest Payment Account
and pay to the applicable owners of each Supplemental Interest Right (which
owners shall, in the absence of contrary instructions received by the Trustee
from the applicable Holders of the Capped Certificates, be the Holders of the
related Capped Certificates), the following amounts in the following priority:
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(i) to the Class A Certificates, the Net WAC Cap Carryover
Amount for such Class; and
(ii) sequentially to the Class M-1, Class M-2 and Class B
Certificates, in that order, the Net WAC Cap Carryover Amount for each
such Class.
(c) Any portion of the Supplemental Interest Payment Amount
Available remaining after application of clause (b) above shall be distributed
to the owners of the Class X Certificates pro rata in accordance with their
Percentage Interests.
(d) The Trustee, on behalf of the Supplemental Interest Trust,
shall comply with all requirements of the Code and applicable state and local
law with respect to the withholding from any distributions made by it to any
Person entitled thereto of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in connection therewith.
(e) Notwithstanding any other provision of this Section 6.10,
the Supplemental Interest Rights shall be separately transferable from the
related Capped Certificates, subject to the restrictions on transfer set forth
in Article IV hereof.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. (a) In case one or more of the
following events (each an "Event of Default") shall occur and be continuing:
(i) any failure by the Servicer to remit to the Trustee any
payment required to be made by the Servicer under the terms of this
Agreement which continues unremedied for one (1) Business Day after the
date upon which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer by the Trustee or to
the Servicer and the Trustee by the Certificateholders of Offered
Certificates evidencing Percentage Interests of at least 25%;
(ii) the failure by the Servicer to make any required
Servicing Advance which failure continues unremedied for a period of
thirty (30) days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Servicer by the Trustee or to the Servicer and the Trustee by any
Certificateholder;
(iii) any failure on the part of the Servicer duly to observe
or perform in any material respect any other of the covenants or
agreements on the part of the Servicer contained in this Agreement, or
the failure of any representation and warranty made pursuant to Section
3.01 to be true and correct which continues unremedied for a period of
thirty (30) days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Servicer, as the case may be, by the Depositor or the Trustee or to
the Servicer and the Trustee by any Certificateholder;
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(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction in an involuntary case under any present
or future federal or state bankruptcy, insolvency or similar law or for
the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree
or order shall have remained in force, undischarged or unstayed for a
period of forty-five (45) days;
(v) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings
of or relating to the Servicer or of or relating to all or
substantially all of the Servicer's property;
(vi) the Servicer shall admit in writing its inability to pay
its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its
obligations;
(vii) if on any Distribution Date a Servicer Termination Loss
Trigger Event occurs; or
(viii) any Change of Control shall occur.
Then, and in each and every such case, so long as such Event
of Default shall not have been remedied: (x) with respect solely to clause (i)
above, if such payment is in respect of Periodic Advances or Compensating
Interest owing by the Servicer and such payment is not made by 12:00 Noon, New
York time on the fourth Business Day prior to the applicable Distribution Date,
the Trustee, upon receipt of written notice or discovery by a Responsible
Officer of such failure, shall give immediate telephonic notice of such failure
to a Servicing Officer of the Servicer and the Trustee may, at the direction of
the majority holders of any Class of Offered Certificates, with the consent of
the Controlling Party, and shall, at the direction of the Controlling Party,
terminate all of the rights and obligations of the Servicer under this Agreement
and the Back-up Servicer, or a successor servicer appointed in accordance with
Section 7.02, shall immediately make such Periodic Advance or payment of
Compensating Interest and assume, pursuant to Section 7.02 hereof, the duties of
a successor Servicer; (y) with respect to clause (xi) above, such Event of
Default shall be waived in the event the Servicer receives the consent of the
Controlling Party, such consent not to be unreasonably withheld; and (z) with
respect to any other Event of Default, the Trustee shall, at the direction of
the Controlling Party, by notice in writing to the Servicer and a Responsible
Officer of the Trustee, terminate all the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
as servicer. Upon receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall, subject to Section 7.02, pass to and be
vested in the Back-up Servicer or such other Person as may be specified by the
Controlling Party and the Back-up Servicer is hereby authorized and empowered to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, at the expense of the Servicer, any and all documents and other
instruments and do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, including, but
not limited to, the transfer and endorsement or assignment of the Mortgage Loans
and related documents. The Servicer agrees to cooperate (and pay any related
costs and expenses) with the Trustee and the Back-up Servicer in effecting the
termination of the Servicer's responsibilities and rights hereunder and the
transfer of such responsibilities and rights to a successor Servicer, including,
without limitation, the transfer to the Back-up Servicer or its designee for
administration by it of all amounts which shall at the time be credited by the
Servicer to the Collection Account or thereafter received with respect to the
Mortgage Loans. The Trustee shall promptly notify the Rating Agencies of the
occurrence of an Event of Default.
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Section 7.02 Back-up Servicer to Act; Appointment of
Successor. (a) On and after the time the Servicer receives a notice of
termination pursuant to Section 7.01, or the Trustee receives the resignation of
the Servicer evidenced by an Opinion of Counsel pursuant to Section 5.21, the
Trustee shall promptly notify the Rating Agencies, except as otherwise provided
in Section 7.01, the Back-up Servicer or such other Person as may be specified
by the Controlling Party shall be the successor in all respects to the Servicer
in its capacity as servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof arising on or after the date of succession; provided, however,
that the Back-up Servicer shall not be liable for any actions or the
representations and warranties of any servicer prior to it and including,
without limitation, the obligations of the Servicer set forth in Sections 2.06
and 3.03. The Back-up Servicer, as successor servicer, shall be obligated to pay
Compensating Interest pursuant to Section 6.09 in any event and to make advances
pursuant to Section 5.18 unless, and only to the extent the Back-up Servicer
determines reasonably and in good faith that such advances would not be
recoverable pursuant to Section 5.04, such determination to be evidenced by a
certification of a Responsible Officer of the Back-up Servicer delivered to the
Rating Agencies.
(b) Notwithstanding the above, the Trustee may, if the Back-up
Servicer shall be unwilling to so act, or shall, if the Back-up Servicer is
unable to so act or if the Controlling Party so requests in writing to the
Trustee, appoint, pursuant to such direction of the Controlling Party, or if no
such direction is provided to the Trustee, pursuant to the provisions set forth
in paragraph (c) below, or petition a court of competent jurisdiction to
appoint, any established mortgage loan servicing institution that has a net
worth of not less than $15,000,000 as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder.
(c) In the event the Back-up Servicer is the successor
servicer, it shall be entitled to the same Servicing Compensation (including the
Servicing Fee as adjusted pursuant to the definition thereof) and other funds
pursuant to Section 5.08 hereof as the Servicer if the Servicer had continued to
act as servicer hereunder; it being understood that, in such event, the Back-up
Servicer would no longer be entitled to the Back-up Servicing Fee. In the event
the Back-up Servicer is unable or unwilling to act as successor servicer, the
Trustee shall solicit, by public announcement, bids from housing and home
finance institutions, banks and mortgage servicing institutions meeting the
qualifications set forth above. Such public announcement shall specify that the
successor servicer shall be entitled to the full amount of the aggregate
Servicing Fees hereunder as servicing compensation, together with the other
Servicing Compensation. Within thirty days after any such public announcement,
the Trustee shall negotiate and effect the sale, transfer and assignment of the
servicing rights and responsibilities hereunder to the qualified party
submitting the highest qualifying bid. The Trustee shall deduct from any sum
received by the Trustee from the successor to the Servicer in respect of such
sale, transfer and assignment all costs and expenses of any public announcement
and of any sale, transfer and assignment of the servicing rights and
responsibilities hereunder and the amount of any unreimbursed Servicing Advances
and Periodic Advances owed to the Back-up Servicer. After such deductions, the
remainder of such sum shall be paid by the Trustee to the Servicer at the time
of such sale, transfer and assignment to the Servicer's successor.
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(d) The Trustee and such successor servicer (including,
without limitation, the Back-up Servicer) shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
The Servicer agrees to cooperate with the Trustee and any successor servicer in
effecting the termination of the Servicer's servicing responsibilities and
rights hereunder and shall promptly provide the Trustee or such successor
servicer, as applicable, at the Servicer's cost and expense, all documents and
records reasonably requested by it to enable it to assume the Servicer's
functions hereunder and shall promptly also transfer to the Trustee or such
successor servicer, as applicable, all amounts that then have been or should
have been deposited in the Collection Account by the Servicer or that are
thereafter received with respect to the Mortgage Loans. Any collections received
by the Servicer after such removal or resignation shall be endorsed by it to the
Trustee and remitted directly to the Trustee or, at the direction of the
Trustee, to the successor servicer. Neither the Trustee nor any successor
servicer shall be held liable by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof caused by (i) the
failure of the Servicer to deliver, or any delay in delivering, cash, documents
or records to it, or (ii) restrictions imposed by any regulatory authority
having jurisdiction over the Servicer hereunder. Notwithstanding anything to the
contrary herein, no appointment of a successor to the Servicer under this
Agreement shall be effective until written notice of such proposed appointment
shall have been provided by the Trustee to each Certificateholder. The Back-up
Servicer shall not resign as servicer until a successor servicer has been
appointed or until a successor servicer has been appointed in accordance with
paragraph (c) above. The Controlling Party shall have the right to remove the
Back-up Servicer (or any successor Servicer) as successor Servicer under this
Section 7.02 without cause, and the Trustee shall appoint such other successor
Servicer as directed by the Controlling Party.
(e) Pending appointment of a successor to the Servicer
hereunder, the Back-up Servicer shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as the Trustee and such successor shall agree; provided, however,
that unless otherwise agreed by the Controlling Party, no such compensation
shall be in excess of that permitted the Servicer pursuant to Section 5.08,
together with other Servicing Compensation. The Servicer, the Back-up Servicer,
the Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
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Section 7.03 Waiver of Defaults. The Controlling Party may, on
behalf of all Certificateholders, waive any events permitting removal of the
Servicer as servicer pursuant to this Article VII; provided, however, that the
Controlling Party may not waive a default in making a required distribution on a
Certificate without the consent of the holder of such Certificate. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereto except to the extent
expressly so waived. Notice of any such waiver shall be given by the Trustee to
the Rating Agencies.
ARTICLE VIII
TERMINATION
Section 8.01 Termination. (a) Subject to Section 8.02, this
Agreement shall terminate upon notice to the Trustee of the later of the
distribution to Certificateholders of the final payment or collection with
respect to the last Mortgage Loan (or Periodic Advances of same by the
Servicer), or the disposition of all funds with respect to the last Mortgage
Loan and the remittance of all funds due hereunder and the payment of all
Trustee Fees and other amounts due and payable to the Trustee; provided,
however, that in no event shall the Trust established by this Agreement
terminate later than: (i) twenty-one years after the death of the last surviving
lineal descendant of Xxxxxx X. Xxxxxxx, late Ambassador of the United States to
the Court of St. Xxxxx, alive as of the date hereof or (ii) the Distribution
Date in December 2033.
(b) In addition, subject to Section 8.02, Servicer may, at its
option and at its sole cost and expense, elect to cause this Agreement to be
terminated and all the Offered Certificates to be redeemed in whole, but not in
part, on the first Distribution Date after any Distribution Date on which the
Aggregate Principal Balance is equal to or less than 10% of the Maximum Pool
Principal Balance (the "Clean-Up Call Date") by purchasing, on such succeeding
Distribution Date, all of the outstanding Mortgage Loans and REO Properties at a
price equal to the sum of (i) 100% of the aggregate Principal Balance of each
outstanding Mortgage Loan and each REO Property, (ii) the greater of (1) the
aggregate amount of accrued and unpaid interest on the Mortgage Loans through
the related Due Period and (2) 30 days' accrued interest thereon computed at a
rate equal to the related Mortgage Interest Rate, in each case net of the
Servicing Fee, (iii) any Back-up Servicer Fees or other amounts due to the
Back-up Servicer hereunder, and (iv) any Trustee Fees or other amounts due to
the Trustee hereunder (the "Termination Price"); provided, that in no event will
the Termination Price be less than the sum of the aggregate Certificate
Principal Balance of the Offered Certificates, plus all accrued and unpaid
interest on the Offered Certificates plus all amounts due the Trustee and the
Back-up Servicer hereunder plus all unreimbursed Periodic Advances and Servicing
Advances. Any such purchase shall be accomplished by deposit of the Termination
Price into the Distribution Account.
(c) If on any Distribution Date, the Servicer determines that
there are no outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than funds in the Distribution Account, the Servicer shall send
a final distribution notice promptly to each such Certificateholder in
accordance with paragraph (d) below.
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(d) Notice of any termination, specifying the Distribution
Date upon which the Trust Fund will terminate and the Certificateholders shall
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Servicer by letter
to Certificateholders mailed during the month of such final distribution before
the Servicer Remittance Date in such month, specifying (i) the Distribution Date
upon which final payment of the Certificates will be made upon presentation and
surrender of Certificates at the office of the Trustee therein designated, (ii)
the amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Trustee
therein specified. The Servicer shall give such notice to the Trustee therein
specified. The Servicer shall give such notice to the Trustee at the time such
notice is given to Certificateholders.
(e) In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the time
specified in the above-mentioned written notice, the Servicer shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice, all of the Certificates
shall not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates and
the cost thereof shall be paid out of the funds and other assets which remain
subject hereto. If within nine months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto and the Trustee upon transfer of such funds shall be
discharged of any responsibility for such funds and the Certificateholders shall
look only to the Class R Certificateholders for payment and not to the Trustee.
Such funds shall remain uninvested.
Section 8.02 Additional Termination Requirements. (a) In the
event that the Servicer exercises its purchase option as provided in Section
8.01, the Trust Fund shall be terminated in accordance with the following
additional requirements, unless the Trustee has been furnished with an Opinion
of Counsel to the effect that the failure of the Trust Fund to comply with the
requirements of this Section 8.02 will not (i) result in the imposition of taxes
on "prohibited transactions" of any REMIC created hereunder as defined in
Section 860F of the Code or (ii) cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that any Offered Certificates or Class X
Certificates are outstanding:
(i) Within 90 days prior to the final Distribution Date
the Servicer shall adopt and the Trustee shall sign, a plan of complete
liquidation of each REMIC created hereunder meeting the requirements of
a "Qualified Liquidation" under Section 860F of the Code and any
regulations thereunder;
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(ii) At or after the time of adoption of such a plan of
complete liquidation and at or prior to the final Distribution Date,
the Trustee shall sell all of the assets of the REMIC I to the Servicer
for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited (A) to the Class A Certificateholders, the
Class A Certificate Principal Balance, plus one month's interest
thereon at the Class A Pass-Through Rate, (B) to the Class M-1
Certificateholders, the Class M-1 Certificate Principal Balance, plus
one month's interest thereon at the Class M-1 Pass-Through Rate, (C) to
the Class M-2 Certificateholders, the Class M-2 Certificate Principal
Balance, plus one month's interest thereon at the Class M-2
Pass-Through Rate, (D) to the Class B Certificateholders, the Class B
Certificate Principal Balance, plus one month's interest thereon at the
Class B Pass-Through Rate, (E) to the Class X Certificateholders, all
cash on hand after such payment to the Class A, Class A-IO, Class M-1,
Class M-2 and Class B Certificateholders (but in no event in excess of
the Class X Distribution Amount), and (F) to the Class R Certificates
in respect of the Class R-III Interest, any remaining amounts (other
than cash retained to meet claims) and the Trust Fund shall terminate
at such time; provided, however, that any such payment will be made
after all outstanding fees, costs and expenses of the Trustee have been
paid in full.
(b) By their acceptance of the Certificates, the Holders
thereof hereby agree to appoint the Servicer as their attorney in fact to: (i)
adopt such a plan of complete liquidation (and the Certificateholders hereby
appoint the Trustee as their attorney in fact to sign such plan) as appropriate
and (ii) to take such other action in connection therewith as may be reasonably
required to carry out such plan of complete liquidation all in accordance with
the terms hereof.
Section 8.03 Accounting Upon Termination of Servicer. Upon
termination of the Servicer, the Servicer shall, at its expense:
(a) deliver to its successor or, if none shall yet have been
appointed, to the Trustee, the funds in any Account;
(b) deliver to its successor or, if none shall yet have been
appointed, to the Collateral Agent on behalf of the Trustee all Mortgage Files
and related documents and statements held by it hereunder and a Mortgage Loan
portfolio computer tape;
(c) deliver to its successor or, if none shall yet have been
appointed, to the Trustee and, upon request, to the Certificateholders a full
accounting of all funds, including a statement showing the Monthly Payments
collected by it and a statement of monies held in trust by it for the payments
or charges with respect to the Mortgage Loans; and
(d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Mortgage Loans to its successor and to more fully and
definitively vest in such successor all rights, powers, duties,
responsibilities, obligations and liabilities of the "Servicer" under this
Agreement.
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ARTICLE IX
THE TRUSTEE
Section 9.01 Duties of Trustee. (a) The Trustee, prior to the
occurrence of an Event of Default of which a Responsible Officer of the Trustee
shall have actual knowledge and after the curing of all Events of Default which
may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge has occurred and
has not been cured or waived, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform on their face to the requirements of this
Agreement; provided, however, that the Trustee shall not be responsible for the
accuracy or content of any resolution, certificate, statement, opinion, report,
document, order or other instrument furnished by the Servicer, the Back-up
Servicer (if not the Trustee) or the Unaffiliated Seller hereunder. If any such
instrument is found not to conform on its face to the requirements of this
Agreement, the Trustee will, at the expense of the Servicer notify the Depositor
of such instrument in the event the Trustee, after so requesting, does not
receive a satisfactorily corrected instrument.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) prior to the occurrence of an Event of Default of
which a Responsible Officer of the Trustee shall have actual knowledge,
and after the curing of all such Events of Default which may have
occurred, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of such duties and obligations
as are specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the Trustee
and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
(ii) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer or other
officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with this Agreement or at the direction of the
Controlling Party or with the consent of the Controlling Party,
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement;
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(iv) the Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default
(except an Event of Default with respect to the nonpayment of any
amount described in Section 7.01(a)), unless a Responsible Officer of
the Trustee shall have received written notice thereof. In the absence
of receipt of such notice, the Trustee may conclusively assume that
there is no default or Event of Default;
(v) the Trustee shall not be required to expend or risk its
own funds or otherwise incur financial liability for the performance of
any of its duties hereunder or the exercise of any of its rights or
powers if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it and none of the provisions contained in
this Agreement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of
the Servicer under this Agreement except during such time, if any, as
the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement; and
(vi) subject to the other provisions of this Agreement (and
except in its capacity as successor Servicer) and without limiting the
generality of this Section, the Trustee shall have no duty (A) to see
to any recording, filing, or depositing of this Agreement or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance
of any such recording or filing or depositing or to any rerecording,
refiling or redepositing of any thereof, (B) to see to any insurance,
(C) to see to the payment or discharge of any tax, assessment, or other
governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust, the
Trust Fund, the Certificateholders or the Mortgage Loans, (D) to
confirm or verify the contents of any reports or certificates of the
Servicer delivered to the Trustee pursuant to this Agreement believed
by the Trustee to be genuine and to have been signed or presented by
the proper party or parties or (E) execute the certification required
by the Sarbanes Oxley Act of 2002.
Section 9.02 Certain Matters Affecting the Trustee. (a) Except
as otherwise provided in Section 9.01:
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
Opinion of Counsel, advice of counsel, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Trustee may consult with counsel and any Opinion of
Counsel or written advice of counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel or advice of counsel;
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(iii) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to institute,
conduct or defend by litigation hereunder or in relation hereto at the
request, order or direction of the Controlling Party or any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders or Controlling Party, as applicable,
shall have offered to the Trustee reasonable security or indemnity
reasonably satisfactory to it against the costs, expenses and
liabilities which may be incurred therein by the Trustee or thereby;
nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge (which
has not been cured), to exercise such of the rights and powers vested
in it by this Agreement, and to use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in
writing to do so by the Majority Certificateholders; provided, however,
that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
satisfactory to the Trustee against such cost, expense or liability as
a condition to taking any such action. The reasonable expense of every
such examination shall be paid by the Servicer or, if paid by the
Trustee, shall be repaid by the Servicer upon demand from the
Servicer's own funds;
(vi) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act;
(vii) the Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust created hereby or the
powers granted hereunder; and
(viii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, attorneys or custodians and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed by the Trustee with due care.
(b) Following the Startup Day, the Trustee shall not knowingly
accept any contribution of assets to the Trust Fund, unless the Trustee shall
have received an Opinion of Counsel (at the expense of the Servicer) to the
effect that the inclusion of such assets in the Trust Fund will not cause any
REMIC created hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject any REMIC created hereunder to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances. The Trustee agrees to indemnify the Trust Fund and the
Servicer for any taxes and costs, including any attorney's fees, imposed or
incurred by the Trust Fund or the Servicer as a result of the breach of the
Trustee's covenants set forth within this subsection (b).
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Section 9.03 Trustee Not Liable for Certificates or Mortgage
Loans. The recitals, representations, warranties and covenants contained herein
or in the Certificates (other than the certificate of authentication on the
Certificates) shall be taken as the statements, representations, warranties and
covenants of the Unaffiliated Seller or the Servicer as the case may be, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Depositor of any of the Certificates or the proceeds
of the Certificates, or for the use or application of any funds paid to the
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Servicer. The Trustee shall not be responsible for the
legality or validity of the Agreement or the validity, priority, perfection or
sufficiency of the security for the Certificates issued or intended to be issued
hereunder. The Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to record this Agreement.
Section 9.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgor of Certificates
with the same rights it would have if it were not Trustee, and may otherwise
deal with the parties hereto.
Section 9.05 Trustee's Fees and Expenses; Indemnity. (a) The
Trustee acknowledges that in consideration of the services rendered by the
Trustee in the execution of the trust hereby created and in the exercise and
performance of any of the powers and duties hereunder it is entitled to receive
the Trustee's Fee in accordance with the provision of Section 6.05(a) (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of any express trust). Additionally, the Trustee hereby covenants, for
the benefit of the Depositor, that the Trustee has arranged separately with the
Servicer for the payment or reimbursement to the Trustee of all of the Trustee's
expenses in connection with this Agreement, including, without limitation, all
reasonable out of pocket expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ). Notwithstanding any
other provision of this Agreement to the contrary, the Servicer covenants and
agrees to indemnify the Trustee and its officers, directors, employees and
agents from, and hold it harmless against, any and all losses, liabilities,
damages, claims or expenses incurred in connection with any legal action
relating to this Agreement, the Certificates or incurred in connection with the
administration of the Trust, other than any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence of the Trustee in the
performance of its duties hereunder or by reason of the Trustee's reckless
disregard of obligations and duties hereunder. For the avoidance of doubt, the
parties hereto acknowledge that it is the intent of the parties that the
Depositor shall not pay any of the Trustee's fees and expenses in connection
with this transaction.
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(b) The Trust Fund, the Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified by the Servicer and held
harmless against any loss, liability, claim, damage or expense arising out of,
or imposed upon the Trust or the Trustee through the Servicer's acts or
omissions in violation of this Agreement, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence of
the Trustee in the performance of its duties hereunder or by reason of the
Trustee's reckless disregard of obligations and duties hereunder. The Servicer
shall immediately notify the Trustee, the Back-up Servicer, the Custodian, the
Depositor and all Certificateholders if a claim is made by a third party with
respect to this Agreement, and the Servicer shall assume the defense of any such
claim and advance all expenses in connection therewith, including reasonable
counsel fees, and promptly advance funds to pay, discharge and satisfy any
judgment or decree which may be entered against the Servicer, the Back-up
Servicer, the Custodian, the Depositor, the Trustee and/or any Certificateholder
in respect of such claim. The obligations of the Servicer under this Section
9.05 arising prior to any resignation or termination of the Servicer hereunder
shall survive the resignation or removal of the Trustee, termination of the
Servicer and payment of the Certificates, and shall extend to any co-trustee or
separate trustee appointed pursuant to this Article IX. Anything in this
Agreement to the contrary notwithstanding, in no event shall the Trustee be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Trustee has
been advised of the likelihood of such loss or damage and regardless of the form
of action.
Section 9.06 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a banking entity (a) organized and doing
business under the laws of any state or the United States of America subject to
supervision or examination by federal or state authority, (b) authorized under
such laws to exercise corporate trust powers, including taking title to the
Trust Fund assets on behalf of the Certificateholders, (c) be a wholly owned
subsidiary of a bank holding company having a combined capital and surplus of at
least $50,000,000, (d) whose long-term deposits, if any, shall be rated at least
BBB- by S&P and Baa3 by Moody's (except as provided herein) or such lower
long-term deposit rating as may be approved in writing by the Rating Agencies,
and (e) reasonably acceptable to the Servicer as evidenced in writing. If such
banking entity publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority, then
for the purposes of determining an entity's combined capital and surplus for
clause (c) of this Section, the amount set forth in its most recent report of
condition so published shall be deemed to be its combined capital and surplus.
In case at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect specified in Section 9.07.
Section 9.07 Resignation and Removal of the Trustee. (a) The
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Servicer, the Back-up Servicer, the
Rating Agencies and the Depositor. Upon receiving such notice of resignation,
the Servicer may promptly appoint a successor trustee by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Depositor, the Back-up Servicer, the Certificateholders and the Unaffiliated
Seller by the Servicer. Unless a successor trustee shall have been so appointed
and shall have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
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(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.06 and shall fail to resign after
written request therefor by the Servicer or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or the
Trustee shall breach any of its obligations hereunder in any material respect,
then the Servicer or the Controlling Party may remove the Trustee and the
Servicer shall, at the direction of the Controlling Party, within thirty (30)
days after such removal, appoint, a successor trustee by written instrument, in
duplicate, which instrument shall be delivered to the Trustee so removed and to
the successor trustee. A copy of such instrument shall be delivered to the
Depositor, the Back-up Servicer, the Certificateholders, the Rating Agencies and
the Unaffiliated Seller by the Servicer.
(c) If the Trustee fails to perform in accordance with the
terms of this Agreement, the Controlling Party may remove the Trustee and
appoint a successor trustee by written instrument or instruments, in triplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Servicer, one complete set to
the Trustee so removed and one complete set to the successor Trustee so
appointed.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 9.08.
Section 9.08 Successor Trustee. Any successor trustee
appointed as provided in Section 9.07 shall execute, acknowledge and deliver to
the Depositor, the Unaffiliated Seller, the Servicer, the Back-up Servicer and
to its predecessor trustee an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements held by it
hereunder, and the Servicer and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations. No successor trustee shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor trustee shall be eligible under the provisions of Section 9.06.
Upon acceptance of appointment by a successor trustee as provided in this
Section, the Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register and to the Rating Agencies. If the Servicer fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Servicer.
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Section 9.09 Merger or Consolidation of Trustee. Any Person
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation or national banking association resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation or national banking association succeeding to the business of
the trustee, shall be the successor of the Trustee hereunder, provided such
corporation or national banking association shall be eligible under the
provisions of Section 9.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
9.10 and the consent of the Servicer, such powers, duties, obligations, rights
and trusts as the Servicer and the Trustee may consider necessary or desirable.
If the Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request so to do, or in case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 9.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
(b) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 9.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly, except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust Fund or any portion thereof in any such jurisdiction) shall be exercised
and performed by such separate trustee or co-trustee at the direction of the
Trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
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(d) Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. The Trustee shall not
be responsible for any action or inaction of any such separate trustee or
co-trustee, provided that the Trustee appointed such separate trustee or
co-trustee with due care. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 9.11 Tax Returns. The Tax Matters Person will prepare,
sign and file all Tax Returns required to be filed by the Trust Fund in
accordance with Section 11.05(a)(i). The Servicer, upon request, will promptly
furnish the Trustee with all such information as may be reasonably required by
the Trustee for the purpose of the Trustee responding to reasonable requests for
information made by Certificateholders in connection with tax matters.
Section 9.12 Retirement of Certificates. The Trustee shall,
upon the retirement of the Certificates pursuant hereto or otherwise, furnish to
the Depositor, the Back-up Servicer and the Servicer a notice of such
retirement, and, upon retirement of the Certificates.
Section 9.13 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, any such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.
Section 9.14 Suits for Enforcement. In case an Event of
Default or other default by the Servicer hereunder shall occur and be
continuing, the Trustee, in its discretion, but subject to Section 9.01 and
Section 7.01, as applicable, may proceed to protect and enforce its rights and
the rights of the Certificateholders under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy, as the Trustee, being advised by
counsel, shall deem most effectual to protect and enforce any of the rights of
the Trustee or the Certificateholders.
ARTICLE X
THE COLLATERAL AGENT
Section 10.01 Duties of the Collateral Agent. (a) The
Collateral Agent, prior to the occurrence of an Event of Default of which a
Responsible Officer shall have actual knowledge and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. If an Event of
Default of which a Responsible Officer shall have actual knowledge has occurred
and has not been cured or waived, the Collateral Agent shall exercise such of
the rights and powers vested in it by this Agreement, and use the same degree of
care and skill in its exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
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(b) The Collateral Agent, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Collateral Agent which are specifically required to
be furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform on their face to the requirements of this
Agreement; provided, however, that the Collateral Agent shall not be responsible
for the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order or other instrument furnished by any Person hereunder.
If any such instrument is found not to conform on its face to the requirements
of this Agreement, the Collateral Agent shall note it as such on the applicable
certification delivered pursuant to Section 2.06.
(c) No provision of this Agreement shall be construed to
relieve the Collateral Agent from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct; provided, however,
that:
(i) prior to the occurrence of an Event of Default of which a
Responsible Officer shall have actual knowledge, and after the curing
of all such Events of Default which may have occurred, the duties and
obligations of the Collateral Agent shall be determined solely by the
express provisions of this Agreement, the Collateral Agent shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Collateral
Agent and, in the absence of bad faith on the part of the Collateral
Agent, the Collateral Agent may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Collateral Agent and
conforming to the requirements of this Agreement;
(ii) the Collateral Agent shall not be personally liable for
an error of judgment made in good faith by a Responsible Officer or
other officers of the Collateral Agent, unless it shall be proved that
the Collateral Agent was negligent in ascertaining the pertinent facts;
(iii) the Collateral Agent shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with this Agreement or at the direction of the
Controlling Party or the Trustee or with the consent of the Controlling
Party or the Trustee;
(iv) the Collateral Agent shall not be required to expend or
risk its own funds or otherwise incur financial liability for the
performance of any of its duties hereunder or the exercise of any of
its rights or powers if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it and none of the provisions
contained in this Agreement shall in any event require the Collateral
Agent to perform, or be responsible for the manner of performance of,
any of the obligations of the Servicer or the Trustee under this
Agreement; and
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(v) subject to the other provisions of this Agreement and
without limiting the generality of this Section 10.01, the Collateral
Agent shall have no duty (A) to see to any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing of any
thereof, (B) to see to any insurance, (C) to see to the payment or
discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or
levied against, any part of the Trust, the Trust Fund, the
Certificateholders or the Mortgage Loans, (D) to confirm or verify the
contents of any reports or certificates of any Person delivered to the
Collateral Agent pursuant to this Agreement believed by the Collateral
Agent to be genuine and to have been signed or presented by the proper
party or parties.
Section 10.02 Certain Matters Affecting the Collateral Agent.
Except as otherwise provided in Section 10.01 hereof:
(a) the Collateral Agent may rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's Certificate,
Opinion of Counsel, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) the Collateral Agent may consult with counsel and any
Opinion of Counsel or written advice of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel or advice of such counsel;
(c) the Collateral Agent shall be under no obligation to
exercise any of the powers vested in it by this Agreement or to institute,
conduct or defend by litigation hereunder or in relation hereto at the request,
order or direction of the Servicer or any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such Certificateholders or the
Servicer, as applicable, shall have offered to the Trustee reasonable security
or indemnity reasonably satisfactory to it against the costs, expenses and
liabilities which may be incurred therein by the Collateral Agent or thereby;
nothing contained herein shall, however, relieve the Collateral Agent of the
obligation, upon the occurrence of an Event of Default of which a Responsible
Officer shall have actual knowledge (which has not been cured), to exercise such
of the rights and powers vested in it by this Agreement, and to use the same
degree of care and skill in its exercise as a prudent person would exercise or
use under the circumstances in the conduct of such person's own affairs;
(d) the Collateral Agent shall not be personally liable for
any action taken, suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
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(e) the Collateral Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by the Controlling Party; provided, however, that if the payment within a
reasonable time to the Collateral Agent of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Collateral Agent, not reasonably assured to the Collateral Agent
by the security afforded to it by the terms of this Agreement, the Collateral
Agent may require reasonable indemnity reasonably satisfactory to the Collateral
Agent against such cost, expense or liability as a condition to taking any such
action. The reasonable expense of every such examination shall be paid by the
Servicer or, if paid by the Collateral Agent, shall be repaid by the Servicer
upon demand from the Servicer's own funds;
(f) the right of the Collateral Agent to perform any
discretionary act enumerated in this Agreement shall not be construed as a duty,
and the Collateral Agent shall not be answerable for anything other than its
negligence or willful misconduct in the performance of such act; and
(g) the Collateral Agent may execute any of the powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys.
Section 10.03 Collateral Agent Not Liable for Certificates or
Mortgage Loans. The recitals contained herein shall be taken as the statements
of the Trust and the Servicer, as the case may be, and the Collateral Agent
assumes no responsibility for their correctness. The Collateral Agent makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document. The Collateral Agent shall not be accountable
for the use or application of any funds paid to the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Servicer. The Collateral Agent shall not be responsible for the legality or
validity of the Agreement or the validity, priority, perfection or sufficiency
of the security for the Certificates issued or intended to be issued under this
Agreement.
Section 10.04 Collateral Agent May Own Certificates. The
Collateral Agent in its individual or any other capacity may become the owner or
pledgor of Certificates with the same rights it would have if it were not
Collateral Agent, and may otherwise deal with the parties hereto.
Section 10.05 Collateral Agent's Fees and Expenses; Indemnity.
(a) The Collateral Agent acknowledges that in consideration of the performance
of its duties hereunder it is entitled to receive its fees and expenses from the
Servicer, as separately agreed between the Servicer and the Collateral Agent.
The Depositor and the Trustee shall not pay any of the Collateral Agent fees and
expenses in connection with this transaction. The Collateral Agent shall not be
entitled to compensation for any expense, disbursement or advance as may arise
from its negligence or bad faith.
(b) The Collateral Agent and any director, officer, employee
or agent of the Collateral Agent shall be indemnified by first, the Trust and,
second, the Servicer and held harmless against any loss, liability, claim,
damage or reasonable expense incurred in connection with this Agreement other
than any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence of the Collateral Agent in the performance of its duties
hereunder or by reason of the Collateral Agent's reckless disregard of
obligations and duties hereunder. The obligations of the Servicer under this
Section 10.05 arising prior to any resignation or termination of the Servicer
hereunder shall survive termination of the Servicer and payment of the
Certificates.
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Section 10.06 Eligibility Requirements for Collateral Agent.
The Collateral Agent hereunder shall at all times be a banking entity (a)
organized and doing business under the laws of any state or the United States of
America subject to supervision or examination by federal or state authority, (b)
authorized under such laws to exercise corporate trust powers, including taking
title to the Trust Fund on behalf of the Trustee, for the benefit of the
Certificateholders, (c) be a wholly owned subsidiary of a bank holding company
having a combined capital and surplus of at least $50,000,000, (d) whose
long-term deposits, if any, shall be rated at least BBB- by S&P and Baa3 by
Moody's (except as provided herein) or such lower long-term deposit rating as
may be approved in writing by the Rating Agencies, and (e) reasonably acceptable
to the Servicer as evidenced in writing. If such banking entity publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
determining an entity's combined capital and surplus for clause (c) of this
Section 10.06, the amount set forth in its most recent report of condition so
published shall be deemed to be its combined capital and surplus. In case at any
time the Collateral Agent shall cease to be eligible in accordance with the
provisions of this Section 10.06, the Collateral Agent shall resign immediately
in the manner and with the effect specified in Section 10.07.
Section 10.07 Resignation and Removal of the Collateral Agent.
(a) The Collateral Agent may at any time resign and be discharged from the
trusts hereby created by giving thirty (30) days' written notice thereof to the
Trustee and the Servicer.
(b) If at any time the Collateral Agent shall cease to be
eligible in accordance with the provisions of Section 10.06 and shall fail to
resign after written request therefor by the Trustee or the Servicer, or if at
any time the Collateral Agent shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or a receiver of the Collateral Agent or of its
property shall be appointed, or any public officer shall take charge or control
of the Collateral Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Trustee or the Servicer or
the Controlling Party may remove the Collateral Agent.
(c) If the Collateral Agent fails to perform in accordance
with the terms of this Agreement, the Trustee, the Servicer or the Controlling
Party may remove the Collateral Agent.
(d) Upon removal or receipt of notice of resignation of the
Collateral Agent, the Trustee shall either (i) take possession of the Trustee's
Mortgage Files and assume the duties of the Collateral Agent hereunder or (ii)
appoint a successor Collateral Agent pursuant to Section 9.08. If the Trustee
shall assume the duties of the Collateral Agent hereunder, it shall notify the
Trust, the Depositor, the Servicer and Rating Agencies in writing.
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Section 10.08 Successor Collateral Agent. Upon the resignation
or removal of the Collateral Agent, the Trustee may appoint a successor
Collateral Agent, with the written approval of the Servicer; provided, however,
that the successor Collateral Agent so appointed shall satisfy the eligibility
criteria set forth in Section 10.06 hereof, shall in no event be the
Unaffiliated Seller, the Depositor or the Servicer or any Person known to a
Responsible Officer of the Trustee to be an Affiliate of the Unaffiliated
Seller, the Depositor or the Servicer and shall be approved by the Servicer. The
Trustee or such custodian, as the case may be, shall assume the duties of the
Collateral Agent hereunder. Any successor Collateral Agent appointed as provided
in this Section 10.08 shall execute, acknowledge and deliver to the Trust, the
Depositor, the Servicer, the Back-up Servicer, the Trustee and to its
predecessor Collateral Agent an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor Collateral Agent
shall become effective and such successor Collateral Agent, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as if
originally named as Collateral Agent herein. The predecessor Collateral Agent
shall deliver to the successor Collateral Agent all of the Trustee's Mortgage
Files and related documents and statements held by it hereunder, and the
Servicer and the predecessor Collateral Agent shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor Collateral Agent all
such rights, powers, duties and obligations. The cost of any such transfer to
the successor Collateral Agent shall be for the account of the Collateral Agent
in the event of the resignation of the Collateral Agent, and shall be for the
account of the Servicer in the event of the removal of the Collateral Agent. No
successor Collateral Agent shall accept appointment as provided in this Section
10.08 unless at the time of such acceptance such successor Collateral Agent
shall be eligible under the provisions of Section 10.06. Upon acceptance of
appointment by a successor Collateral Agent as provided in this Section 10.08,
the Servicer shall mail notice of the succession of such Collateral Agent
hereunder to all Certificateholders at their addresses as shown in the
Certificate Register and to the Rating Agencies. If the Servicer fails to mail
such notice within ten (10) days after acceptance of appointment by the
successor Collateral Agent, the successor Collateral Agent shall cause such
notice to be mailed at the expense of the Servicer.
Section 10.09 Merger or Consolidation of Collateral Agent. Any
Person into which the Collateral Agent may be merged or converted or with which
it may be consolidated or any corporation or national banking association
resulting from any merger, conversion or consolidation to which the Collateral
Agent shall be a party, or any corporation or national banking association
succeeding to the business of the Collateral Agent, shall be the successor of
the Collateral Agent hereunder; provided, that, such corporation or national
banking association shall be eligible under the provisions of Section 10.06,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Limitation on Liability of the Depositor, the
Back-up Servicer and the Servicer. None of the Depositor, the Servicer, the
Back-up Servicer or any of the directors, officers, employees or agents of the
Depositor, the Servicer or the Back-up Servicer shall be under any liability to
the Trust or the Certificateholders for any action taken, or for refraining from
the taking of any action, in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Depositor, the Back-up Servicer or the Servicer or any such Person against any
breach of warranties, representations, covenants or agreements made herein, or
against any specific liability imposed on each such party pursuant to this
Agreement or against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations or duties hereunder. The
Depositor, the Back-up Servicer or the Servicer and any director, officer,
employee or agent of the Depositor, the Back-up Servicer or the Servicer may
rely in good faith on any document of any kind which, prima facie, is properly
executed and submitted by any appropriate Person respecting any matters arising
hereunder.
Section 11.02 Acts of Certificateholders. (a) Except as
otherwise specifically provided herein, whenever Certificateholder action,
consent or approval is required under this Agreement, such action, consent or
approval shall be deemed to have been taken or given on behalf of, and shall be
binding upon, all Certificateholders if the Controlling Party agrees to take
such action or give such consent or approval.
(b) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(c) No Certificateholder shall have any right to vote (except
as expressly provided for herein) or in any manner otherwise control the
operation and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(d) Prior to the execution of any amendment to this Agreement,
the Trustee shall be entitled to receive and rely upon an Opinion of Counsel
(which shall be an expense of the Trust) stating that the execution of such
amendment is authorized and permitted by this Agreement. The Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Trustee's own rights, duties or immunities under this Agreement.
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Section 11.03 Amendment. (a) This Agreement may be amended
from time to time by the Servicer, the Depositor and the Trustee by written
agreement, without notice to or consent of the Certificateholders to cure any
ambiguity, to correct or supplement any provisions herein, to comply with any
changes in the Code, or to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be inconsistent with the
provisions of this Agreement or effect a significant change in the permitted
activities of the Trust; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, at the expense of the party requesting the
change, delivered to the Trustee, adversely affect in any material respect the
interests of any Certificateholder; provided, further, that no such amendment
shall (x) reduce in any manner the amount of, or delay the timing of, payments
received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, or change the
rights or obligations of any other party hereto without the consent of such
party, or (y) amend or alter Section 2.01(b) hereof. The Trustee shall give
prompt written notice to the Rating Agencies of any amendment made pursuant to
this Section 11.03 or pursuant to Section 6.09 of the Unaffiliated Seller's
Agreement.
(b) This Agreement may be amended from time to time by the
Servicer, the Depositor and the Trustee with the consent of the Controlling
Party and the Holders of the majority of the Percentage Interest in the Class R
Certificates for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders; provided, however, that no such amendment
shall be made unless the Trustee receives an Opinion of Counsel, at the expense
of the party requesting the change, that such change (i) will not adversely
affect the status of any REMIC created hereunder as a REMIC, (ii) will not cause
a tax to be imposed on any REMIC created hereunder and (iii) such change will
not effect a significant change in the permitted activities of the Trust;
provided, further, that no such amendment shall reduce in any manner the amount
of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Class of Certificates without the consent of
the Holders of such Class of Certificates or reduce the percentage for the
Holders of which are required to consent to any such amendment without the
consent of the Holders of 100% of such Class of Certificates affected thereby.
(c) It shall not be necessary for the consent of Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof.
Section 11.04 Recordation of Agreement. To the extent
permitted by applicable law, this Agreement, or a memorandum thereof if
permitted under applicable law, is subject to recordation in all appropriate
public offices for real property records in all of the counties or other
comparable jurisdictions in which any or all of the properties subject to the
Mortgages are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Servicer at the direction of
the Controlling Party.
Section 11.05 Duration of Agreement. This Agreement shall
continue in existence and effect until terminated as herein provided.
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Section 11.06 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered to (i) in the case of the Servicer, American Business Credit, Inc.,
Xxxxxxxxxx Xxxxxx Xxxxxx, 000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxx, XX
00000, Attention: Xx. Xxxxxxx X. Xxxxx, (ii) in the case of the Unaffiliated
Seller, ABFS 2002-4, Inc., Balapointe Office Centre, 000 Xxxxxxxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxx Xxxxxx, XX 00000, Attention: Xx. Xxxxxxx X. Xxxxx, (iii) in the
case of the Trustee, the Collateral Agent and the Back-up Servicer, JPMorgan
Chase Bank, Institutional Trust Services, 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx,
XX 00000-0000 Attention: Structured Finance Services, ABFS 2002-4, (iv) in the
case of the Certificateholders, as set forth in the Certificate Register, (v) in
the case of Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 Attention: Home Equity Monitoring Group, (vi) in the case of Standard
& Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 Attention: Residential
Mortgage Surveillance Group, (vii) in the case of the Depositor or the
Underwriter, Credit Suisse First Boston Mortgage Securities Corp. or Credit
Suisse First Boston Corporation, Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Transaction Advisory Group. Any such notices shall be deemed to be
effective with respect to any party hereto upon the receipt of such notice by
such party, except that notices to the Certificateholders shall be effective
upon mailing or personal delivery.
Section 11.07 Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall be
held invalid for any reason whatsoever, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other covenants, agreements, provisions or
terms of this Agreement.
Section 11.08 No Partnership. Nothing herein contained shall
be deemed or construed to create a co-partnership or joint venture between the
parties hereto and the services of the Servicer shall be rendered as an
independent contractor and not as agent for the Certificateholders.
Section 11.09 Counterparts. This Agreement may be executed in
one or more counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed to be an
original; such counterparts, together, shall constitute one and the same
agreement.
Section 11.10 Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the Servicer, the Back-up Servicer,
the Depositor, the Trustee, the Collateral Agent and the Certificateholders and
their respective successors and permitted assigns.
Section 11.11 Headings. The headings of the various sections
of this Agreement have been inserted for convenience of reference only and shall
not be deemed to be part of this Agreement.
Section 11.12 [RESERVED]
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Section 11.13 Third Party Beneficiary. The parties agree that
the Unaffiliated Seller is intended and shall have all rights of a third-party
beneficiary of this Agreement.
Section 11.14 [RESERVED]
Section 11.15 Appointment of Tax Matters Person; Certain
Taxes. (a) The Holders of the Class R Certificates as the Tax Matters Person
hereby appoint the Servicer to act, as their agent in such capacity, for each
REMIC created hereunder for all purposes of the Code. The Tax Matters Person
will perform, or cause to be performed, such duties and take, or cause to be
taken, such actions as are required to be performed or taken by the Tax Matters
Person under the code. The Holders of the Class R Certificates may hereafter
appoint a different entity as their agent, or may appoint one of the Class R
Certificateholders to be the Tax Matters Person. The Tax Matters Person Shall:
(i) prepare, sign and file, or cause to be prepared and
filed, in a timely manner, a U.S. Real Estate Mortgage Investment
Conduit (REMIC) Income Tax Return (Form 1066) and any other Tax Return
required to be filed by each REMIC created hereunder, using a calendar
year as the taxable year for each REMIC created hereunder;
(ii) make, or cause to be made, an election, on behalf of
each REMIC created hereunder, to be treated as a REMIC on the federal
tax return of each REMIC created hereunder for its first taxable year;
(iii) prepare and forward, or cause to be prepared and
forwarded, to the Trustee, the Certificateholders and to the Internal
Revenue Service and any other relevant governmental taxing authority
all information returns or reports as and when required to be provided
to them in accordance with the REMIC Provisions;
(iv) to the extent that the affairs of the Trust Fund are
within its control, conduct such affairs of the Trust Fund at all times
that any Certificates are outstanding so as to maintain the status of
each REMIC created hereunder as a REMIC under the REMIC Provisions and
any other applicable federal, state and local laws, including, without
limitation, information reports relating to "original issue discount,"
as defined in the Code, based upon the Prepayment Assumption and
calculated by using the issue price of the Certificates;
(v) not knowingly or intentionally take any action or
omit to take any action that would cause the termination of the REMIC
status of any REMIC created hereunder;
(vi) pay the amount of any and all federal, state, and
local taxes, including, without limitation, upon the Trustee or the
Certificateholders in connection with the Trust, the Trust Fund or the
Mortgage Loans, prohibited transaction taxes as defined in Section 860F
of the Code, other than any amount due as a result of a transfer or
attempted or purported transfer in violation of Section 4.02, imposed
on any REMIC created hereunder when and as the same shall be due and
payable (but such obligation shall not prevent the Unaffiliated Seller
or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Unaffiliated Seller
from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings);
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(vii) ensure that any such returns or reports filed on
behalf of any REMIC created hereunder by the Trustee are properly
executed by the appropriate person and submitted in a timely manner;
(viii) represent any REMIC created hereunder in any
administrative or judicial proceedings relating to an examination or
audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of any REMIC created hereunder, enter
into settlement agreements with any governmental taxing agency, extend
any statute of limitations relating to any item of any REMIC created
hereunder and otherwise act on behalf of each REMIC created hereunder
in relation to any tax matter involving any REMIC created hereunder;
(ix) as provided in Section 5.11 hereof, make available
information necessary for the computation of any tax imposed (1) on
transferors of residual interests to transferees that are not Permitted
Transferees or (2) on pass-through entities, any interest in which is
held by an entity which is not a Permitted Transferee. The Trustee
covenants and agrees that it will cooperate with the Servicer in the
foregoing matters and that it will sign, as Trustee, any and all Tax
Returns required to be filed by each REMIC created hereunder.
Notwithstanding the foregoing, at such time as the Trustee becomes the
successor Servicer, the holder of the largest percentage of the Class R
Certificates shall serve as Tax Matters Person until such time as an
entity is appointed to succeed the Trustee as Servicer;
(x) make available to the Internal Revenue Service and
those Persons specified by the REMIC Provisions all information
necessary to compute any tax imposed (A) as a result of the Transfer of
an Ownership Interest in a Class R Certificate to any Person who is not
a Permitted Transferee, including the information described in Treasury
regulations sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to
the "excess inclusions" of such Class R Certificate and (B) as a result
of any regulated investment company, real estate investment trust,
common trust fund, partnership, trust, estate or organization described
in Section 1381 of the Code that holds an Ownership Interest in a Class
R Certificate having as among its record holders at any time any Person
that is not a Permitted Transferee;
(xi) pay out of its own funds, without any right of
reimbursement, any and all tax related expenses of each REMIC created
hereunder (including, but not limited to, tax return preparation and
filing expenses and any professional fees or expenses related to audits
or any administrative or judicial proceedings with respect to each
REMIC created hereunder that involve the Internal Revenue Service or
state tax authorities), other than the expense of obtaining any Opinion
of Counsel required pursuant to Sections 3.03, 5.10 and 8.02 and other
than taxes except as specified herein;
(xii) upon filing with the Internal Revenue Service, the
Tax Matters Person shall furnish to the Holders of the Class R
Certificates the Form 1066 and each Form 1066Q and the Unaffiliated
Seller shall respond promptly to written requests made not more
frequently than quarterly by any Holder of Class R Certificates with
respect to the following matters:
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(A) the original projected principal and
interest cash flows on the Closing Date on the regular and
residual interests created hereunder and on the Mortgage
Loans, based on the Prepayment Assumption;
(B) the projected remaining principal and
interest cash flows as of the end of any calendar quarter with
respect to the regular and residual interests created
hereunder and the Mortgage Loans, based on the Prepayment
Assumption;
(C) the Prepayment Assumption and any interest
rate assumptions used in determining the projected principal
and interest cash flows described above;
(D) the original issue discount (or, in the case
of the Mortgage Loans, market discount) or premium accrued or
amortized through the end of such calendar quarter with
respect to the regular or residual interests created hereunder
and with respect to the Mortgage Loans, together with each
constant yield to maturity used in computing the same;
(E) the treatment of losses realized with
respect to the Mortgage Loans or the regular interests created
hereunder, including the timing and amount of any cancellation
of indebtedness income of any REMIC created hereunder with
respect to such regular interests or bad debt deductions
claimed with respect to the Mortgage Loans;
(F) the amount and timing of any non-interest
expenses of any REMIC created hereunder; and
(G) any taxes (including penalties and interest)
imposed on any REMIC created hereunder, including, without
limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or
state or local income or franchise taxes; and
(xiii) make any other required reports in respect of
interest payments in respect of the Mortgage Loans and acquisitions and
abandonments of Mortgaged Property to the Internal Revenue Service
and/or the borrowers, as applicable.
(b) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of any REMIC created
hereunder as defined in Section 860G(c) of the Code, on any contribution to any
REMIC created hereunder after the Startup Day pursuant to Section 860G(d) of the
Code, or any other tax is imposed, such tax shall be paid by (i) the Trustee, if
such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) the Servicer, if such tax arises out of
or results from a breach by the Servicer of any of its obligations under this
Agreement, or otherwise (iii) the holders of the Class R Certificates in
proportion to their Percentage Interests. To the extent such tax is chargeable
against the holders of the Class R Certificates, notwithstanding anything to the
contrary contained herein, the Trustee is hereby authorized to retain from
amounts otherwise distributable to the Holders of the Class R Certificates on
any Distribution Date sufficient funds to for the payment of such tax.
111
Section 11.16 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.
(b) THE DEPOSITOR, THE SERVICER, THE BACK-UP SERVICER, THE
COLLATERAL AGENT AND THE TRUSTEE HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT
LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION
10.06 HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER
THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE
DEPOSITOR, THE SERVICER, THE BACK-UP SERVICER, THE COLLATERAL AGENT AND THE
TRUSTEE EACH HEREBY WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE DEPOSITOR, THE
SERVICER, THE BACK-UP SERVICER THE COLLATERAL AGENT OR THE TRUSTEE TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY OF THEIR RIGHTS
TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.
(c) THE DEPOSITOR, THE SERVICER, THE BACK-UP SERVICER, THE
COLLATERAL AGENT AND THE TRUSTEE EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH THIS
AGREEMENT. INSTEAD, ANY DISPUTE WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A
JURY.
[Remainder of Page Intentionally Left Blank]
112
IN WITNESS WHEREOF, the Depositor, the Servicer, the Trustee,
the Collateral Agent and the Back-up 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.
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP., as Depositor
By:
-----------------------------
Name:
Title:
AMERICAN BUSINESS CREDIT, INC., as Servicer
By:
-----------------------------
Name:
Title:
JPMORGAN CHASE BANK, as Trustee, Collateral
Agent and Back-up Servicer
By:
-----------------------------
Name:
Title:
