EX-4.1
[EXECUTION VERSION]
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XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor,
OCWEN FEDERAL BANK FSB,
as Servicer,
CDC MORTGAGE CAPITAL INC.,
as Unaffiliated Seller,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee,
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2002
CDC MORTGAGE CAPITAL TRUST 2002-HE2
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2002-HE2
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS............................................................................................13
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES..........................................47
SECTION 2.01 CONVEYANCE OF MORTGAGE LOANS...............................................................47
SECTION 2.02 ACCEPTANCE BY THE TRUSTEE OF THE MORTGAGE LOANS............................................51
SECTION 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE UNAFFILIATED SELLER AND THE SERVICER......52
SECTION 2.04 THE DEPOSITOR AND THE MORTGAGE LOANS.......................................................55
SECTION 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH SUBSTITUTIONS AND NON-QUALIFIED
MORTGAGES..................................................................................55
SECTION 2.06 EXECUTION AND DELIVERY OF CERTIFICATES.....................................................56
SECTION 2.07 REMIC MATTERS..............................................................................56
SECTION 2.08 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR............................................56
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.......................................................58
SECTION 3.01 SERVICER TO SERVICE MORTGAGE LOANS.........................................................58
SECTION 3.02 SUBSERVICING AGREEMENTS BETWEEN THE SERVICER AND SUBSERVICERS..............................59
SECTION 3.03 SUCCESSOR SUBSERVICERS.....................................................................60
SECTION 3.04 LIABILITY OF THE SERVICER..................................................................61
SECTION 3.05 NO CONTRACTUAL RELATIONSHIP BETWEEN SUBSERVICERS AND THE TRUSTEE...........................61
SECTION 3.06 ASSUMPTION OR TERMINATION OF SUBSERVICING AGREEMENTS BY TRUSTEE............................61
SECTION 3.07 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS; ESTABLISHMENT OF CERTAIN ACCOUNTS............62
SECTION 3.08 SUBSERVICING ACCOUNTS......................................................................64
SECTION 3.09 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS; ESCROW ACCOUNTS........................65
SECTION 3.10 COLLECTION ACCOUNT.........................................................................65
SECTION 3.11 WITHDRAWALS FROM THE COLLECTION ACCOUNT....................................................67
SECTION 3.12 INVESTMENT OF FUNDS IN THE ACCOUNT.........................................................68
SECTION 3.13 MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND OMISSIONS AND FIDELITY COVERAGE.............69
SECTION 3.14 ENFORCEMENT OF DUE-ON-SALE CLAUSES ASSUMPTION AGREEMENTS...................................71
SECTION 3.15 REALIZATION UPON DEFAULTED MORTGAGE LOANS..................................................72
SECTION 3.16 RELEASE OF MORTGAGE FILES..................................................................73
SECTION 3.17 TITLE, CONSERVATION AND DISPOSITION OF REO PROPERTY........................................74
SECTION 3.18 NOTIFICATION OF ADJUSTMENTS................................................................76
SECTION 3.19 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE MORTGAGE LOANS...............76
SECTION 3.20 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE SERVICER TO BE HELD FOR THE
TRUSTEE....................................................................................76
SECTION 3.21 SERVICING COMPENSATION.....................................................................77
SECTION 3.22 ANNUAL STATEMENT AS TO COMPLIANCE..........................................................77
SECTION 3.23 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING STATEMENT; FINANCIAL STATEMENTS...........77
SECTION 3.24 TRUSTEE TO ACT AS SERVICER.................................................................78
SECTION 3.25 COMPENSATING INTEREST......................................................................79
SECTION 3.26 CREDIT REPORTING; XXXXX-XXXXX-XXXXXX ACT...................................................79
SECTION 3.27 ADVANCE FACILITIES.........................................................................79
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER............................................................81
SECTION 4.01 ADVANCES...................................................................................81
SECTION 4.02 PRIORITIES OF DISTRIBUTION.................................................................82
SECTION 4.03 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS...................................................86
SECTION 4.04 CERTAIN MATTERS RELATING TO THE DETERMINATION OF LIBOR.....................................89
SECTION 4.05 THE CLASS A INSURANCE POLICY...............................................................89
SECTION 4.06 EFFECT OF PAYMENTS BY THE CLASS A CERTIFICATE INSURER; SUBROGATION.........................91
ARTICLE V THE CERTIFICATES.......................................................................................92
SECTION 5.01 THE CERTIFICATES...........................................................................92
SECTION 5.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES................93
SECTION 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES..........................................97
SECTION 5.04 PERSONS DEEMED OWNERS......................................................................98
SECTION 5.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES..................................98
SECTION 5.06 MAINTENANCE OF OFFICE OR AGENCY............................................................98
SECTION 5.07 RIGHTS OF THE CLASS A CERTIFICATE INSURER TO EXERCISE RIGHTS OF CLASS A
CERTIFICATEHOLDERS.........................................................................98
SECTION 5.08 TRUSTEE TO ACT SOLELY WITH CONSENT OF THE CLASS A CERTIFICATE INSURER......................99
SECTION 5.09 MORTGAGE LOANS, TRUST FUND AND ACCOUNTS HELD FOR BENEFIT OF THE CLASS A
CERTIFICATE INSURER........................................................................99
SECTION 5.10 CLASS A CERTIFICATE INSURER DEFAULT.......................................................100
ARTICLE VI THE DEPOSITOR AND THE SERVICER.......................................................................100
SECTION 6.01 RESPECTIVE LIABILITIES OF THE DEPOSITOR AND THE SERVICER..................................100
SECTION 6.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE SERVICER..................................100
SECTION 6.03 LIMITATION ON LIABILITY OF THE DEPOSITOR, THE SERVICER AND OTHERS.........................101
SECTION 6.04 LIMITATION ON RESIGNATION OF THE SERVICER.................................................102
SECTION 6.05 ADDITIONAL INDEMNIFICATION BY THE SERVICER; THIRD PARTY CLAIMS............................102
ARTICLE VII DEFAULT.............................................................................................102
SECTION 7.01 EVENTS OF DEFAULT.........................................................................102
SECTION 7.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR..................................................104
SECTION 7.03 NOTIFICATION TO CERTIFICATEHOLDERS........................................................105
ARTICLE VIII CONCERNING THE TRUSTEE.............................................................................106
SECTION 8.01 DUTIES OF THE TRUSTEE.....................................................................106
SECTION 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.....................................................107
SECTION 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.....................................108
SECTION 8.04 TRUSTEE MAY OWN CERTIFICATES..............................................................108
SECTION 8.05 TRUSTEE'S FEES AND EXPENSES...............................................................108
SECTION 8.06 ELIGIBILITY REQUIREMENTS FOR THE TRUSTEE..................................................109
SECTION 8.07 RESIGNATION AND REMOVAL OF THE TRUSTEE....................................................109
SECTION 8.08 SUCCESSOR TRUSTEE.........................................................................110
SECTION 8.09 MERGER OR CONSOLIDATION OF THE TRUSTEE....................................................110
SECTION 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.............................................110
SECTION 8.11 TAX MATTERS...............................................................................112
SECTION 8.12 PERIODIC FILINGS..........................................................................114
SECTION 8.13 TAX CLASSIFICATION OF CERTAIN ACCOUNTS....................................................114
ARTICLE IX TERMINATION..........................................................................................115
SECTION 9.01 TERMINATION UPON LIQUIDATION OR PURCHASE OF THE MORTGAGE LOANS............................115
SECTION 9.02 FINAL DISTRIBUTION ON THE CERTIFICATES....................................................115
SECTION 9.03 ADDITIONAL TERMINATION REQUIREMENTS.......................................................116
ARTICLE X MISCELLANEOUS PROVISIONS..............................................................................117
SECTION 10.01 AMENDMENT.................................................................................117
SECTION 10.02 RECORDATION OF AGREEMENT; COUNTERPARTS....................................................119
SECTION 10.03 GOVERNING LAW.............................................................................119
SECTION 10.04 INTENTION OF PARTIES......................................................................119
SECTION 10.05 NOTICES...................................................................................120
SECTION 10.06 SEVERABILITY OF PROVISIONS................................................................121
SECTION 10.07 ASSIGNMENT................................................................................121
SECTION 10.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS................................................121
SECTION 10.09 INSPECTION AND AUDIT RIGHTS...............................................................122
SECTION 10.10 CERTIFICATES NONASSESSABLE AND FULLY PAID.................................................122
SECTION 10.11 THE CLASS A CERTIFICATE INSURER DEFAULT...................................................122
SECTION 10.12 THIRD PARTY BENEFICIARY...................................................................123
SECTION 10.13 WAIVER OF JURY TRIAL......................................................................123
SECTION 10.14 LIMITATION OF DAMAGES.....................................................................123
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of the Servicer
Schedule III Representations and Warranties as to the Unaffiliated Seller
EXHIBITS
Exhibit A Form of Class A, Class M-1, Class M-2, Class B-1 and Class B-2 Certificate
Exhibit B Form of Class A-IO Certificate
Exhibit C Form of Class P Certificate
Exhibit D Form of Class R Certificate
Exhibit E Form of Class X Certificate
Exhibit F Form of Initial Certification of Trustee
Exhibit G Form of Final Certification of Trustee
Exhibit H Form of Transfer Affidavit
Exhibit I Form of Transferor Certificate
Exhibit J Form of Rule 144A Letter
Exhibit K Form of Request for Release
Exhibit L Form of Subsequent Transfer Agreement
iv
THIS POOLING AND SERVICING AGREEMENT, dated as of July 1, 2002,
among XXXXXX XXXXXXX ABS CAPITAL I INC., a Delaware corporation, as depositor
(the "DEPOSITOR"), OCWEN FEDERAL BANK FSB, a federally chartered savings bank,
as servicer (the "SERVICER"), CDC MORTGAGE CAPITAL INC., a New York corporation,
as unaffiliated seller (the "UNAFFILIATED SELLER") and DEUTSCHE BANK NATIONAL
TRUST COMPANY (f/k/a Bankers Trust Company of California, N.A.), a national
banking association, as trustee (the "TRUSTEE"),
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that three segregated asset pools within the
Trust Fund be treated for federal income tax purposes as comprising three REMICs
(each a "REMIC" or, in the alternative, the Lower Tier REMIC, the Middle Tier
REMIC and the Upper Tier REMIC, respectively). Each Certificate, other than the
Class P and Class R Certificates, represents ownership of a regular interest in
the Upper Tier REMIC for purposes of the REMIC Provisions. The Class R
Certificate represents ownership of the sole class of residual interest in each
of the Lower Tier REMIC, the Middle Tier REMIC and the Upper Tier REMIC for
purposes of the REMIC Provisions. Class UT-R, Class MT-R and Class LT-R comprise
the Class R Certificate. The Startup Day for each REMIC described herein is the
Closing Date. The latest possible maturity date for each regular interest is the
date referenced for such regular interests in this preliminary statement.
The Upper Tier REMIC shall hold as assets the several classes of
uncertificated Middle Tier Regular Interests, set out below. Each such Middle
Tier Regular Interest is hereby designated as a regular interest in the Middle
Tier REMIC. The Middle Tier REMIC shall hold as assets the several classes of
uncertificated Lower Tier Regular Interests, set out below. Each such Lower Tier
Regular Interest is hereby designated as a regular interest in the Lower Tier
REMIC. Class MT-A, Class MT-M-1, Class MT-M-2, Class MT-B-1 and Class MT-B-2 are
hereby designated the MT Accretion Directed Classes. The Class P Certificate
represents beneficial ownership of the Prepayment Charges, which portion of the
Trust Fund shall be treated as a grantor trust.
The Lower Tier REMIC shall hold as assets all of the assets included
in the Trust Fund other than Prepayment Charges and the Excess Reserve Fund
Account.
LOWER TIER CLASS LOWER TIER INITIAL LOWER TIER LATEST POSSIBLE MATURITY
DESIGNATION INTEREST RATE PRINCIPAL AMOUNT DATE
---------------- ------------- ------------------ ------------------------
Class LT-1 (1) $1,472,200 January 25, 2033
Class LT-2 (1) $1,515,400 January 25, 2033
Class LT-3 (1) $1,558,900 January 25, 2033
Class LT-4 (1) $1,602,500 January 25, 2033
Class LT-5 (1) $1,591,400 January 25, 2033
Class LT-6 (1) $1,580,400 January 25, 2033
Class LT-7 (1) $1,569,500 January 25, 2033
Class LT-8 (1) $1,558,800 January 25, 2033
Class LT-9 (1) $1,548,300 January 25, 2033
Class LT-10 (1) $1,537,800 January 25, 2033
Class LT-11 (1) $1,526,100 January 25, 2033
Class LT-12 (1) $1,512,700 January 25, 2033
Class LT-13 (1) $1,483,100 January 25, 2033
Class LT-14 (1) $1,449,700 January 25, 2033
Class LT-15 (1) $1,416,100 January 25, 2033
Class LT-16 (1) $1,382,700 January 25, 2033
Class LT-17 (1) $1,350,000 January 25, 2033
Class LT-18 (1) $1,318,200 January 25, 2033
Class LT-19 (1) $1,287,000 January 25, 2033
Class LT-20 (1) $14,130,400 January 25, 2033
Class LT-21 (1) $920,200 January 25, 2033
Class LT-22 (1) $898,400 January 25, 2033
Class LT-23 (1) $877,200 January 25, 2033
Class LT-24 (1) $856,400 January 25, 2033
Class LT-25 (1) $836,200 January 25, 2033
Class LT-26 (1) $816,500 January 25, 2033
Class LT-27 (1) $797,100 January 25, 2033
Class LT-28 (1) $778,300 January 25, 2033
Class LT-29 (1) $759,800 January 25, 2033
Class LT-30 (1) $741,900 January 25, 2033
Class LT-31 (1) $724,300 January 25, 2033
Class LT-32 (1) $707,200 January 25, 2033
2
Class LT-33 (1) $690,500 January 25, 2033
Class LT-34 (1) $674,100 January 25, 2033
Class LT-35 (1) $658,100 January 25, 2033
Class LT-36 (1) $26,885,300 January 25, 2033
Class LT-37 (1) $324,050,491 January 25, 2033
Class LT-R (2) (2)
(1) The interest rate with respect to any Distribution Date for these interests
is a per annum variable rate equal to the WAC Cap.
(2) The Class LT-R Interest is the sole class of residual interest in the Lower
Tier REMIC and it does not have a principal amount or an interest rate.
On each Distribution Date, all Unpaid Realized Loss Amounts,
prepayments, and payments of scheduled principal generated with respect to the
Mortgage Loans shall be allocated in the following order: (i) to the Class LT-37
Interest, until such Class is paid in full or eliminated by such losses and (ii)
to the Class LT-1, Class LT-2, Class LT-3, Class LT-4, Class LT-5, Class LT-6,
Class LT-7, Class LT-8, Class LT-9, Class LT-10, Class LT-11, Class LT-12, Class
LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17, Class LT-18, Class
LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class
LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class
LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36 in
that order until each respective Class is paid in full or eliminated by such
losses.
The Middle Tier REMIC shall hold as assets all of the Lower
Tier Regular Interests.
CORRESPONDING LATEST
MIDDLE TIER CLASS MIDDLE TIER UPPER TIER POSSIBLE
DESIGNATION INTEREST RATE INITIAL LOWER TIER PRINCIPAL AMOUNT REMIC CLASS MATURITY DATE
------------------------ --------------- ------------------------------------- -------------- --------------
Class MT-A (1) 1/2 initial Corresponding Upper Tier A January 25,
REMIC Class initial principal balance 2033
Class MT-M-1 (1) 1/2 initial Corresponding Upper Tier M-1 January 25,
REMIC Class initial principal balance 2033
Class MT-M-2 (1) 1/2 initial Corresponding Upper Tier M-2 January 25,
REMIC Class initial principal balance 2033
3
CORRESPONDING LATEST
MIDDLE TIER CLASS MIDDLE TIER UPPER TIER POSSIBLE
DESIGNATION INTEREST RATE INITIAL LOWER TIER PRINCIPAL AMOUNT REMIC CLASS MATURITY DATE
------------------------ --------------- ------------------------------------- -------------- --------------
Class MT-B-1 (1) 1/2 initial Corresponding Upper Tier B-1 January 25,
REMIC Class initial principal balance 2033
Class MT-B-2 (1) 1/2 initial Corresponding Upper Tier B-2 January 25,
REMIC Class initial principal balance 2033
Class MT-Accrual (1) 1/2 Pool Balance plus1/2Subordinated N/A January 25,
Amount 2033
Class MT-A-IO (2) (3) A-IO August 25,
2005
Class MT-R (4) (4)
(1) On any Distribution Date, a per annum interest rate equal to the weighted
average of the per annum interest rates on the Lower Tier REMIC Regular
Interests where (i) on the first Distribution Date, the interest rates on
Class LT-1, Class LT-2, Class LT-3, Class LT-4, Class LT-5, Class LT-6,
Class LT-7, Class LT-8, Class LT-9, Class LT-10, Class LT-11, Class LT-12,
Class LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17, Class
LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23,
Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class
LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34,
Class LT-35, and Class LT-36 are first reduced by 5.25%; (ii) on the
second Distribution Date, the interest rates on Class LT-2, Class LT-3,
Class LT-4, Class LT-5, Class LT-6, Class LT-7, Class LT-8, Class LT-9,
Class LT-10, Class LT-11, Class LT-12, Class LT-13, Class LT-14, Class
LT-15, Class LT-16, Class LT-17, Class LT-18, Class LT-19, Class LT-20,
Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class LT-25, Class
LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class LT-31,
Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36 are
first reduced by 5.25%; (iii) on the third Distribution Date, the interest
rates on Class LT-3, Class LT-4, Class LT-5, Class LT-6, Class LT-7, Class
LT-8, Class LT-9, Class LT-10, Class LT-11, Class LT-12, Class LT-13,
Class LT-14, Class LT-15, Class LT-16, Class LT-17, Class LT-18, Class
LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24,
Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class
LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35,
and Class LT-36 are first reduced by 5.25%; (iv) on the fourth
Distribution Date, the interest rates on Class LT-4, Class LT-5, Class
LT-6, Class LT-7, Class LT-8, Class LT-9, Class LT-10, Class LT-11, Class
LT-12, Class LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17,
Class LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class
LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28,
Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class
LT-34, Class LT-35, and Class LT-36 are first reduced by 5.25%; (v) on the
fifth Distribution Date, the interest rates on Class LT-5, Class LT-6,
Class LT-7, Class LT-8, Class LT-9, Class LT-10, Class LT-11, Class LT-12,
Class LT-13, Class LT-14,
4
Class LT-15, Class LT-16, Class LT-17, Class LT-18, Class LT-19, Class
LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class LT-25,
Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class
LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36
are first reduced by 5.25%; (vi) on the sixth Distribution Date, the
interest rates on Class LT-6, Class LT-7, Class LT-8, Class LT-9, Class
LT-10, Class LT-11, Class LT-12, Class LT-13, Class LT-14, Class LT-15,
Class LT-16, Class LT-17, Class LT-18, Class LT-19, Class LT-20, Class
LT-21, Class LT-22, Class LT-23, Class LT-24, Class LT-25, Class LT-26,
Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class LT-31, Class
LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36 are first
reduced by 5.25%; (vii) on the seventh Distribution Date, the interest
rates on Class LT-7, Class LT-8, Class LT-9, Class LT-10, Class LT-11,
Class LT-12, Class LT-13, Class LT-14, Class LT-15, Class LT-16, Class
LT-17, Class LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22,
Class LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class
LT-28, Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33,
Class LT-34, Class LT-35, and Class LT-36 are first reduced by 5.25%;
(viii) on the eighth Distribution Date, the interest rates on Class LT-8,
Class LT-9, Class LT-10, Class LT-11, Class LT-12, Class LT-13, Class
LT-14, Class LT-15, Class LT-16, Class LT-17, Class LT-18, Class LT-19,
Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class
LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30,
Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class
LT-36 are first reduced by 5.25%; (ix) on the ninth Distribution Date, the
interest rates on Class LT-9, Class LT-10, Class LT-11, Class LT-12, Class
LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17, Class LT-18,
Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class
LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29,
Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class
LT-35, and Class LT-36 are first reduced by 5.25%; (x) on the tenth
Distribution Date, the interest rates on Class LT-10, Class LT-11, Class
LT-12, Class LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17,
Class LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class
LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28,
Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class
LT-34, Class LT-35, and Class LT-36 are first reduced by 5.25%; (xi) on
the eleventh Distribution Date, the interest rates on Class LT-11, Class
LT-12, Class LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17,
Class LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class
LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28,
Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class
LT-34, Class LT-35, and Class LT-36 are first reduced by 5.25%; (xii) on
the twelfth Distribution Date, the interest rates on Class LT-12, Class
LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17, Class LT-18,
Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class
LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29,
Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class
LT-35, and Class LT-36 are first reduced by 5.25%; (xiii) on the
thirteenth Distribution Date, the interest rates on Class LT-13, Class
LT-14, Class LT-15, Class LT-16, Class LT-17, Class LT-18, Class LT-19,
Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class
LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30,
Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class
LT-36 are first reduced by 5.25%; (xiv) on the fourteenth
5
Distribution Date, the interest rates on Class LT-14, Class LT-15, Class
LT-16, Class LT-17, Class LT-18, Class LT-19, Class LT-20, Class LT-21,
Class LT-22, Class LT-23, Class LT-24, Class LT-25, Class LT-26, Class
LT-27, Class LT-28, Class LT-29, Class LT-30, Class LT-31, Class LT-32,
Class LT-33, Class LT-34, Class LT-35, and Class LT-36 are first reduced
by 5.25%; (xv) on the fifteenth Distribution Date, the interest rates on
Class LT-15, Class LT-16, Class LT-17, Class LT-18, Class LT-19, Class
LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class LT-25,
Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class
LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36
are first reduced by 5.25%; (xvi) on the sixteenth Distribution Date, the
interest rates on Class LT-16, Class LT-17, Class LT-18, Class LT-19,
Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class
LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30,
Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class
LT-36 are first reduced by 5.25%; (xvii) on the seventeenth Distribution
Date, the interest rates on Class LT-17, Class LT-18, Class LT-19, Class
LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class LT-25,
Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class
LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36
are first reduced by 5.25%; (xviii) on the eighteenth Distribution Date,
the interest rates on Class LT-18, Class LT-19, Class LT-20, Class LT-21,
Class LT-22, Class LT-23, Class LT-24, Class LT-25, Class LT-26, Class
LT-27, Class LT-28, Class LT-29, Class LT-30, Class LT-31, Class LT-32,
Class LT-33, Class LT-34, Class LT-35, and Class LT-36 are first reduced
by 5.25%; (xix) on the nineteenth Distribution Date, the interest rates on
Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class
LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29,
Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class
LT-35, and Class LT-36 are first reduced by 5.25%; (xx) on the twentieth
Distribution Date, the interest rates on Class LT-20, Class LT-21, Class
LT-22, Class LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27,
Class LT-28, Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class
LT-33, Class LT-34, Class LT-35, and Class LT-36 are first reduced by
5.25%; (xxi) on the twenty-first Distribution Date, the interest rates on
Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class LT-25, Class
LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class LT-31,
Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36 are
first reduced by 5.25%; (xxii) on the twenty-second Distribution Date, the
interest rates on Class LT-22, Class LT-23, Class LT-24, Class LT-25,
Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class
LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36
are first reduced by 5.25%; (xxiii) on the twenty-third Distribution Date,
the interest rates on Class LT-23, Class LT-24, Class LT-25, Class LT-26,
Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class LT-31, Class
LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36 are first
reduced by 5.25%; (xxiv) on the twenty-fourth Distribution Date, the
interest rates on Class LT-24, Class LT-25, Class LT-26, Class LT-27,
Class LT-28, Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class
LT-33, Class LT-34, Class LT-35, and Class LT-36 are first reduced by
5.25%; (xxv) on the twenty-fifth Distribution Date, the interest rates on
Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class
LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35,
and Class LT-36 are first reduced by 5.25%; (xxvi) on the twenty-sixth
Distribution Date, the interest rates on
6
Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class
LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36
are first reduced by 5.25%; (xxvii) on the twenty-seventh Distribution
Date, the interest rates on Class LT-27, Class LT-28, Class LT-29, Class
LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35,
and Class LT-36 are first reduced by 5.25%; (xxviii) on the twenty-eighth
Distribution Date, the interest rates on Class LT-28, Class LT-29, Class
LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35,
and Class LT-36 are first reduced by 5.25%; (xxix) on the twenty-ninth
Distribution Date, the interest rates on Class LT-29, Class LT-30, Class
LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36
are first reduced by 5.25%; (xxx) on the thirtieth Distribution Date, the
interest rates on Class LT-30, Class LT-31, Class LT-32, Class LT-33,
Class LT-34, Class LT-35, and Class LT-36 are first reduced by 5.25%;
(xxxi) on the thirty-first Distribution Date, the interest rates on Class
LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36
are first reduced by 5.25%; (xxxii) on the thirty-second Distribution
Date, the interest rates on Class LT-32, Class LT-33, Class LT-34, Class
LT-35, and Class LT-36 are first reduced by 5.25%; (xxxiii) on the
thirty-third Distribution Date, the interest rates on Class LT-33, Class
LT-34, Class LT-35, and Class LT-36 are first reduced by 5.25%; (xxxiv) on
the thirty-fourth Distribution Date, the interest rates on Class LT-34,
Class LT-35, and Class LT-36 are first reduced by 5.25%; (xxxv) on the
thirty-fifth Distribution Date, the interest rates on Class LT-35, and
Class LT-36 are first reduced by 5.25% and (xxxvi) on the thirty-sixth
Distribution Date, the interest rate on Class LT-36 is first reduced by
5.25%.
(2) The Class MT-A-IO Interest will bear interest at a per annum rate equal to
5.25% for the first 36 Distribution Dates and 0.00% thereafter.
(3) The Class MT-A-IO will have a notional principal balance equal to (i) on
the first Distribution Date, the sum of the principal balances of Class
LT-1, Class LT-2, Class LT-3, Class LT-4, Class LT-5, Class LT-6, Class
LT-7, Class LT-8, Class LT-9, Class LT-10, Class LT-11, Class LT-12, Class
LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17, Class LT-18,
Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class
LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29,
Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class
LT-35, and Class LT-36; (ii) on the second Distribution Date, the sum of
the principal balances of Class LT-2, Class LT-3, Class LT-4, Class LT-5,
Class LT-6, Class LT-7, Class LT-8, Class LT-9, Class LT-10, Class LT-11,
Class LT-12, Class LT-13, Class LT-14, Class LT-15, Class LT-16, Class
LT-17, Class LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22,
Class LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class
LT-28, Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33,
Class LT-34, Class LT-35, and Class LT-36; (iii) on the third Distribution
Date, the sum of the principal balances of Class LT-3, Class LT-4, Class
LT-5, Class LT-6, Class LT-7, Class LT-8, Class LT-9, Class LT-10, Class
LT-11, Class LT-12, Class LT-13, Class LT-14, Class LT-15, Class LT-16,
Class LT-17, Class LT-18, Class LT-19, Class LT-20, Class LT-21, Class
LT-22, Class LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27,
Class LT-28, Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class
LT-33, Class LT-34, Class LT-35, and Class LT-36; (iv) on the fourth
Distribution Date, the sum of the principal balances of Class LT-4, Class
LT-5, Class LT-6, Class LT-7, Class LT-8, Class
7
LT-9, Class LT-10, Class LT-11, Class LT-12, Class LT-13, Class LT-14,
Class LT-15, Class LT-16, Class LT-17, Class LT-18, Class LT-19, Class
LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class LT-25,
Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class
LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class
LT-36; (v) on the fifth Distribution Date, the sum of the principal
balances of Class LT-5, Class LT-6, Class LT-7, Class LT-8, Class LT-9,
Class LT-10, Class LT-11, Class LT-12, Class LT-13, Class LT-14, Class
LT-15, Class LT-16, Class LT-17, Class LT-18, Class LT-19, Class LT-20,
Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class LT-25, Class
LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class LT-31,
Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36; (vi)
on the sixth Distribution Date, the sum of the principal balances of Class
LT-6, Class LT-7, Class LT-8, Class LT-9, Class LT-10, Class LT-11, Class
LT-12, Class LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17,
Class LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class
LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28,
Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class
LT-34, Class LT-35, and Class LT-36; (vii) on the seventh Distribution
Date, the sum of the principal balances of Class LT-7, Class LT-8, Class
LT-9, Class LT-10, Class LT-11, Class LT-12, Class LT-13, Class LT-14,
Class LT-15, Class LT-16, Class LT-17, Class LT-18, Class LT-19, Class
LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class LT-25,
Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class
LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class
LT-36; (viii) on the eighth Distribution Date, the sum of the principal
balances of Class LT-8, Class LT-9, Class LT-10, Class LT-11, Class LT-12,
Class LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17, Class
LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23,
Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class
LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34,
Class LT-35, and Class LT-36; (ix) on the ninth Distribution Date, the sum
of the principal balances of Class LT-9, Class LT-10, Class LT-11, Class
LT-12, Class LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17,
Class LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class
LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28,
Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class
LT-34, Class LT-35, and Class LT-36; (x) on the tenth Distribution Date,
the sum of the principal balances of Class LT-10, Class LT-11, Class
LT-12, Class LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17,
Class LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class
LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28,
Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class
LT-34, Class LT-35, and Class LT-36; (xi) on the eleventh Distribution
Date, the sum of the principal balances of Class LT-11, Class LT-12, Class
LT-13, Class LT-14, Class LT-15, Class LT-16, Class LT-17, Class LT-18,
Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class
LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29,
Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class
LT-35, and Class LT-36; (xii) on the twelfth Distribution Date, the sum of
the principal balances of Class LT-12, Class LT-13, Class LT-14, Class
LT-15, Class LT-16, Class LT-17, Class LT-18, Class LT-19, Class LT-20,
Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class LT-25, Class
LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class LT-31,
Class LT-32, Class LT-33,
8
Class LT-34, Class LT-35, and Class LT-36; (xiii) on the thirteenth
Distribution Date, the sum of the principal balances of Class LT-13, Class
LT-14, Class LT-15, Class LT-16, Class LT-17, Class LT-18, Class LT-19,
Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24, Class
LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30,
Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class
LT-36; (xiv) on the fourteenth Distribution Date, the sum of the principal
balances of Class LT-14, Class LT-15, Class LT-16, Class LT-17, Class
LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23,
Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class
LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34,
Class LT-35, and Class LT-36; (xv) on the fifteenth Distribution Date, the
sum of the principal balances of Class LT-15, Class LT-16, Class LT-17,
Class LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class
LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28,
Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class
LT-34, Class LT-35, and Class LT-36; (xvi) on the sixteenth Distribution
Date, the sum of the principal balances of Class LT-16, Class LT-17, Class
LT-18, Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23,
Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class
LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34,
Class LT-35, and Class LT-36; (xvii) on the seventeenth Distribution Date,
the sum of the principal balances of Class LT-17, Class LT-18, Class
LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class LT-24,
Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class
LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35,
and Class LT-36; (xviii) on the eighteenth Distribution Date, the sum of
the principal balances of Class LT-18, Class LT-19, Class LT-20, Class
LT-21, Class LT-22, Class LT-23, Class LT-24, Class LT-25, Class LT-26,
Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class LT-31, Class
LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36; (xix) on
the nineteenth Distribution Date, the sum of the principal balances of
Class LT-19, Class LT-20, Class LT-21, Class LT-22, Class LT-23, Class
LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29,
Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class
LT-35, and Class LT-36; (xx) on the twentieth Distribution Date, the sum
of the principal balances of Class LT-20, Class LT-21, Class LT-22, Class
LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28,
Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class
LT-34, Class LT-35, and Class LT-36; (xxi) on the twenty-first
Distribution Date, the sum of the principal balances of Class LT-21, Class
LT-22, Class LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27,
Class LT-28, Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class
LT-33, Class LT-34, Class LT-35, and Class LT-36; (xxii) on the
twenty-second Distribution Date, the sum of the principal balances of
Class LT-22, Class LT-23, Class LT-24, Class LT-25, Class LT-26, Class
LT-27, Class LT-28, Class LT-29, Class LT-30, Class LT-31, Class LT-32,
Class LT-33, Class LT-34, Class LT-35, and Class LT-36; (xxiii) on the
twenty-third Distribution Date, the sum of the principal balances of Class
LT-23, Class LT-24, Class LT-25, Class LT-26, Class LT-27, Class LT-28,
Class LT-29, Class LT-30, Class LT-31, Class LT-32, Class LT-33, Class
LT-34, Class LT-35, and Class LT-36; (xxiv) on the twenty-fourth
Distribution Date, the sum of the principal balances of Class LT-24, Class
LT-25, Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30,
Class LT-31, Class LT-32, Class LT-33, Class
9
LT-34, Class LT-35, and Class LT-36; (xxv) on the twenty-fifth
Distribution Date, the sum of the principal balances of Class LT-25, Class
LT-26, Class LT-27, Class LT-28, Class LT-29, Class LT-30, Class LT-31,
Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class LT-36;
(xxvi) on the twenty-sixth Distribution Date, the sum of the principal
balances of Class LT-26, Class LT-27, Class LT-28, Class LT-29, Class
LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35,
and Class LT-36; (xxvii) on the twenty-seventh Distribution Date, the sum
of the principal balances of Class LT-27, Class LT-28, Class LT-29, Class
LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35,
and Class LT-36; (xxviii) on the twenty-eighth Distribution Date, the sum
of the principal balances of Class LT-28, Class LT-29, Class LT-30, Class
LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35, and Class
LT-36; (xix) on the twenty-ninth Distribution Date, the sum of the
principal balances of Class LT-29, Class LT-30, Class LT-31, Class LT-32,
Class LT-33, Class LT-34, Class LT-35, and Class LT-36; (xxx) on the
thirtieth Distribution Date, the sum of the principal balances of Class
LT-30, Class LT-31, Class LT-32, Class LT-33, Class LT-34, Class LT-35,
and Class LT-36; (xxxi) on the thirty-first Distribution Date, the sum of
the principal balances of Class LT-31, Class LT-32, Class LT-33, Class
LT-34, Class LT-35, and Class LT-36; (xxxii) on the thirty-second
Distribution Date, the sum of the principal balances of Class LT-32, Class
LT-33, Class LT-34, Class LT-35, and Class LT-36; (xxxiii) on the
thirty-third Distribution Date, the sum of the principal balances of Class
LT-33, Class LT-34, Class LT-35, and Class LT-36; (xxxiv) on the
thirty-fourth Distribution Date, the sum of the principal balances of
Class LT-34, Class LT-35, and Class LT-36; (xxxv) on the thirty-fifth
Distribution Date, the sum of the principal balances of Class LT-35 and
Class LT-36; (xxxvi) on the thirty-sixth Distribution Date, the principal
balance of Class LT-36 and (xxxvii) thereafter, zero.
(4) The Class MT-R Interest is the sole class of residual interest in the
Middle Tier REMIC and it does not have a principal amount or an interest
rate.
On each Distribution Date, 50% of the increase in the Subordinated
Amount will be payable as a reduction of the principal balances of the MT
Accretion Directed Classes (each such Class will be reduced by an amount equal
to 50% of any increase in the Subordinated Amount that is attributable to a
reduction in the principal balance of its Corresponding Class) and will be
accrued and added to the principal balance of the MT Accrual Class. On each
Distribution Date, the increase in the principal balance of the MT Accrual Class
may not exceed interest accruals for such Distribution Date for the MT Accrual
Class. In the event that: (i) 50% of the increase in the Subordinated Amount
exceeds (ii) interest accruals on the MT Accrual Class for such Distribution
Date, the excess for such Distribution Date (accumulated with all such excesses
for all prior Distribution Dates) will be added to any increase in the
Subordinated Amount for purposes of determining the amount of interest accrual
on the MT Accrual Class payable as principal on the MT Accretion Directed
Classes on the next Distribution Date pursuant to the first sentence of this
paragraph. All payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans shall be allocated 50% to the MT Accrual Class,
and 50% to the MT Accretion Directed Classes (principal payments shall be
allocated among such MT Accretion Directed Classes in an amount equal to 50% of
the principal amounts allocated to their respective Corresponding Classes),
until paid in full. Notwithstanding the above, principal payments allocated to
the Class X Certificates that result in the reduction in
10
the Subordinated Amount shall be allocated to the MT Accrual Class (until paid
in full). Realized losses shall be applied so that after all distributions have
been made on each Distribution Date (i) the principal balances of each of the MT
Accretion Directed Class is equal to 50% of the principal balance of their
Corresponding Class, and (ii) the MT Accrual Class is equal to 50% of the
aggregate principal balance of the Mortgage Pool plus 50% of the Subordinated
Amount.
The Upper Tier REMIC shall issue the following classes of interests
and each Upper Tier Interest, other than the Class UT-R Interest, is hereby
designated as a regular interest in the Upper Tier REMIC.
INITIAL
UPPER TIER UPPER TIER
UPPER TIER CLASS INTEREST PRINCIPAL CORRESPONDING LATEST POSSIBLE
DESIGNATION RATE AMOUNT CERTIFICATE MATURITY DATE
---------------- ---------- ---------- ------------- ----------------
Class A (1) $328,101,000 Class A(7) January 25, 2033
Class A-IO (2) (6) Class A-IO August 25, 2005
Class M-1 (3) $ 27,342,000 Class M-1(7) January 25, 2033
Class M-2 (3) $ 21,266,000 Class M-2(7) January 25, 2033
Class B-1 (3) $ 16,810,000 Class B-1(7) January 25, 2033
Class B-2 (3) $ 6,481,000 Class B-2(7) January 25, 2033
Class X (4) (4) Class X January 25, 2033
Class UT-R (5) Class R
(1) The Class A Interest ill bear interest during each Interest Accrual Period
thereafter at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus 0.290% and (ii) the WAC Cap
or (b) after the Optional Termination Date, the lesser of (i) LIBOR plus
0.580% and (ii) the WAC Cap.
(2) The Class A-IO Interest will bear interest at a per annum rate equal to
5.25% for the first 36 Distribution Dates and 0.00% thereafter.
(3) The Class M-1, Class M-2, Class B-1 and Class B-2 Interests will bear
interest during each Interest Accrual Period thereafter at a per annum
rate equal to (a) on or prior to the Optional Termination Date, the lesser
of (i) LIBOR plus 0.700%, 1.500%, 2.000% and 2.650%, respectively, and
(ii) the WAC Cap or (b) after the Optional Termination Date, the lesser of
(i) LIBOR plus 1.050%, 2.250%, 3.000% and 3.975%, respectively, and (ii)
the WAC Cap.
(4) The Class X Interest has an initial principal balance of $5,063,191, but
it will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the principal balances of the Middle Tier Regular Interests as of the
first day of the related Interest Accrual Period. With respect to any
Interest Accrual Period, the Class X Interest shall bear interest at a
rate equal to the excess, if any, of the
11
WAC Cap over the product of (i) 2 and (ii) the weighted average
Pass-Through Rate of the Middle Tier REMIC Interests, other than the Class
MT-A-IO, where the MT Accrual Class is subject to a cap equal to zero and
each MT Accretion Directed Class is subject to a cap equal to the
Pass-Through Rate on its Corresponding Class. With respect to any
Distribution Date, interest that so accrues on the notional principal
balance of the Class X Interest shall be deferred in an amount equal to
any increase in the Subordinated Amount on such Distribution Date. Such
deferred interest shall not itself bear interest.
(5) The Class UT-R Interest is the sole class of residual interest in the
Upper Tier REMIC. The Class UT-R Interest does not have an interest rate.
(6) The Class A-IO Interest will have a notional principal balance equal to
the notional principal balance of Class MT-A-IO.
(7) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account in respect of any
Basis Risk CarryForward Amounts. For federal income tax purposes, the
Trustee will treat a Certificateholder's right to receive payments from
the Excess Reserve Fund Account as payments made pursuant to a notional
principal contract written by the Class X Certificateholder.
The minimum denomination for each Class of Certificates, other than
the Class P, Class R and the Class X Certificates, will be $25,000 and integral
multiples of $1 thereof. The Class P, Class R and the Class X Certificates will
each represent a 100% Percentage Interest in such class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates......... All Classes of Certificates other than the
Physical Certificates.
Subordinated Certificates....... Class M-1, Class M-2, Class B-1 and Class B-2
Certificates.
Delay Certificates.............. None.
ERISA-Restricted Certificates... Class R Certificates, Class P Certificate and
Class X Certificate; any certificate with a
rating below the lowest applicable permitted
rating under the Underwriters' Exemption.
Floating Rate Certificates...... Class A and Subordinated Certificates.
Interest Only Certificates...... Class A-IO Certificates.
LIBOR Certificates.............. Class A and Subordinated Certificates.
12
Non-Delay Certificates.......... Class A, Class A-IO, Class X and Subordinated
Certificates.
Offered Certificates............ All Classes of Certificates other than the
Private Certificates.
Physical Certificates........... Class P, Class X and Class R Certificates.
Private Certificates............ Class P, Class X and Class R Certificates.
Rating Agencies................. Moody's, Fitch, Inc. and Standard & Poor's.
Regular Certificates............ All Classes of Certificates other than the
Class P and Class R Certificates.
Residual Certificates........... Class R Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
60+ DAY DELINQUENT LOAN: Each Mortgage Loan with respect to which
any portion of a Scheduled Payment is, as of the last day of the prior Due
Period, two months or more past due (without giving effect to any grace period),
each Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for
which the Mortgagor has filed for bankruptcy.
ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01 of this Agreement.
ACCOUNT: Any of the Capitalized Interest Account, the Collection
Account, the Distribution Account, any Escrow Account, the Excess Reserve Fund
Account, the Class A Insurance Payment Account or the Pre-Funding Account. Each
Account shall be an Eligible Account.
ACCRUED CERTIFICATE INTEREST DISTRIBUTION AMOUNT: With respect to
any Distribution Date for each Class of Certificates (other than the Class X
Certificate), the amount of interest accrued during the related Interest Accrual
Period at the applicable Pass-Through Rate on the related Class Certificate
Balance (or with respect to the Class A-IO Certificates, the Class A-IO Notional
Balance) immediately prior to such Distribution Date, as reduced (except with
respect to Class A-IO Certificates) by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.02.
13
ADDITION NOTICE: A written notice from the Unaffiliated Seller to
the Trustee, the Rating Agencies and the Class A Certificate Insurer that the
Unaffiliated Seller desires to make a Subsequent Transfer.
ADJUSTABLE RATE MORTGAGE LOAN: A Mortgage Loan bearing interest at
an adjustable rate.
ADJUSTED MORTGAGE RATE: As to each Mortgage Loan and at any time,
the per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
ADJUSTED NET MORTGAGE RATE: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
ADJUSTMENT DATE: As to any Mortgage Loan, the first Due Date on
which the related Mortgage Rate adjusts as set forth in the related Mortgage
Note and each Due Date thereafter on which the Mortgage Rate adjusts as set
forth in the related Mortgage Note.
ADVANCES: Collectively, the P&I Advances and Servicing Advances.
ADVANCE FACILITY: As defined in Section 3.27.
ADVANCE FACILITY TRUSTEE: As defined in Section 3.27.
ADVANCE REIMBURSEMENT AMOUNT: As defined in Section 3.27.
ADVANCING PERSON: As defined in Section 3.27.
AFFILIATE: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AGREEMENT: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
AMOUNT HELD FOR FUTURE DISTRIBUTION: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments and Liquidation Proceeds on the Mortgage Loans received after the
end of the related Prepayment Period and (ii) all Scheduled Payments on the
Mortgage Loans due after the end of the related Due Period.
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
Regular Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
14
APPRAISED VALUE: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
ASSIGNMENT AND RECOGNITION AGREEMENT: The BNC Assignment Agreement,
the IFC Assignment Agreement, the Community Bank Assignment Agreement, the
People's Choice Assignment Agreement or the Chapel Mortgage Assignment
Agreement, as applicable.
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
BALLOON LOAN: Any Mortgage Loan that provided on the date of
origination for an amortization schedule extending beyond its stated maturity
date.
BASIC PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
BASIS RISK CARRYFORWARD AMOUNT: With respect to each Class of
Regular Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Regular Certificates is
based upon the WAC Cap, the excess of (i) the amount of interest such Class of
Certificates would otherwise be entitled to receive on such Distribution Date
had such rate been calculated as the sum of LIBOR and the applicable
Pass-Through Margin on such Class of Certificates for such Distribution Date,
over (ii) the amount of interest payable on such Class of Certificates
calculated at the WAC Cap for such Distribution Date and (B) the Basis Risk
CarryForward Amount for such Class of Certificates for all previous Distribution
Dates not previously paid, together with interest thereon at a rate equal to the
sum of LIBOR and the applicable Pass-Through Margin for such Class of
Certificates for such Distribution Date.
BASIS RISK PAYMENT: For any Distribution Date, an amount equal to
any Basis Risk CarryForward Amount, PROVIDED, HOWEVER, that with respect to any
Distribution Date, the payment cannot exceed the amounts otherwise distributable
on the Class X Certificates plus any Interest Rate Cap Payment with respect to
such Distribution Date.
BEST'S: Best's Key Rating Guide, as the same shall be amended from
time to time.
BNC: BNC Mortgage, Inc., a Delaware corporation.
BNC ASSIGNMENT AGREEMENT: The Assignment and Recognition Agreement,
dated as of July 31, 2002, by and among the Unaffiliated Seller, the Depositor
and BNC, and each other Assignment and Recognition Agreement by and among the
Unaffiliated Seller, the Depositor and BNC in connection with any Subsequent
Transfer of BNC Mortgage Loans.
15
BNC MORTGAGE LOAN: A Mortgage Loan which was acquired from BNC by
the Unaffiliated Seller pursuant to the BNC Purchase Agreement, and which has
been acquired by the Trust Fund.
BNC PURCHASE AGREEMENT: The Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of February 26, 2002, by and between
the Unaffiliated Seller and BNC.
BOOK-ENTRY CERTIFICATES: As specified in the Preliminary Statement.
BUSINESS DAY: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the State of New
York, New Jersey and Florida, (b) the state in which the Servicer's servicing
operations are located, or (c) the State in which the Trustee's operations are
located, are authorized or obligated by law or executive order to be closed.
CAP AGREEMENT: The interest rate cap agreement dated July 31, 2002
with the Cap Provider, as "Party A" thereunder, and the Unaffiliated Seller, as
"Party B" thereunder, or any replacement thereof.
CAP PROVIDER: CDC Financial Products, Inc., and any successor
thereto.
CAPITALIZED INTEREST ACCOUNT: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.07(e) in the name of the
Trustee for the benefit of the Offered Certificateholders and designated
"Deutsche Bank National Trust Company, in trust for registered holders of CDC
Mortgage Capital Trust 2002-HE2, Mortgage Pass-Through Certificates, Series
2002-HE2".
CAPITALIZED INTEREST REQUIREMENT: With respect to the Distribution
Dates occurring in August 2002, September 2002 and October 2002, the excess, if
any, of (x) the Accrued Certificate Interest Distribution Amounts for all
classes of the Offered Certificates for such Distribution Date over (y) all
scheduled installments of interest (net of the related Expense Fees) due on the
Mortgage Loans in the related Due Period. In no event will the Capitalized
Interest Requirement be less than zero.
CERTIFICATE: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
CERTIFICATE BALANCE: With respect to any Class of Certificates,
other than the Class R Certificate, at any date, the maximum dollar amount of
principal to which the Holder thereof is then entitled hereunder, such amount
being equal to the Denomination thereof minus all distributions of principal
previously made with respect thereto and in the case of any Subordinated
Certificates, reduced by any Applied Realized Loss Amounts applicable to such
Class of Subordinated Certificates. The Class R Certificate has no Certificate
Balance.
CERTIFICATE INSURANCE POLICY: The Financial Guaranty Insurance
Policy No. 51309-N, and all endorsements thereto dated the Closing Date, issued
by the Class A Certificate Insurer for the benefit of the Class A
Certificateholders.
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CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
CERTIFICATE REGISTER: The register maintained pursuant to Section
5.02.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; PROVIDED, HOWEVER,
that if any such Person (including the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Trustee is entitled to rely conclusively
on a certification of the Depositor or any affiliate of the Depositor in
determining which Certificates are registered in the name of an affiliate of the
Depositor.
CHAPEL MORTGAGE: Chapel Mortgage Corporation, a New Jersey
corporation.
CHAPEL MORTGAGE ASSIGNMENT AGREEMENT: The Assignment and Recognition
Agreement, dated as of July 31, 2002, by and among the Unaffiliated Seller, the
Depositor and Chapel Mortgage, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Chapel
Mortgage in connection with any Subsequent Transfer of Chapel Mortgage Mortgage
Loans.
CHAPEL MORTGAGE MORTGAGE LOAN: A Mortgage Loan which was acquired
from Chapel Mortgage by the Unaffiliated Seller pursuant to the Chapel Mortgage
Purchase Agreement, and which has been acquired by the Trust Fund.
CHAPEL MORTGAGE PURCHASE AGREEMENT: The Mortgage Loan Purchase and
Warranties Agreement, dated as of June 4, 2002, by and between the Unaffiliated
Seller and Chapel Mortgage.
CLASS: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
CLASS A CERTIFICATE INSURER: Financial Security Assurance Inc., a
monoline stock insurance company organized and created under the laws of the
State of New York, and any successors thereto.
CLASS A CERTIFICATE INSURER DEFAULT: The existence and continuance
of any of the following:
(a) the Class A Certificate Insurer shall have failed to make a
required payment when due under the Class A Insurance Policy;
17
(b) the Class A Certificate Insurer shall have (i) filed a
petition or commenced any case or proceeding under any provision or
chapter of the United States Bankruptcy Code, the New York State Insurance
Law or any other similar federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation, or reorganization, (ii) made a
general assignment for the benefit of its creditors or (iii) had an order
for relief entered against it under the United States Bankruptcy Code, the
New York State Insurance Law or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation, or
reorganization that is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or any other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent, or receiver for the Certificate Insurer or for
all or any material portion of its property or (ii) authorizing the taking
of possession by a custodian, trustee, agent, or receiver of the
Certificate Insurer or of all or any material portion of its property.
CLASS A CERTIFICATES: All Certificates bearing the class designation
of "Class A Certificates".
CLASS A DEFICIENCY: With respect to any Distribution Date and the
Class A Certificates, an amount equal to the excess of the sum of:
(i) the excess of (x) the Accrued Certificate Interest
Distribution Amount for the Class A Certificates on such Distribution
Date, over (y) the Interest Amount Available, less the Premium Amount and
the Trustee Fee, in each case for such Distribution Date; plus
(ii) the Class A Principal Parity Amount, if any, for such
Distribution Date.
CLASS A INSURANCE PAYMENT ACCOUNT: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 4.05(c) in the name of
the Trustee for the benefit of the Class A Certificateholders and the Class A
Certificate Insurer, and designated "Deutsche Bank National Trust Company, in
trust for Financial Security Assurance Inc. and the registered holders of CDC
Mortgage Capital Trust 2002-HE2, Mortgage Pass-Through Certificates, Series
2002-HE2."
CLASS A PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balance of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) the product of 62.00% of the Current Maximum Amount and (B)
the Current Maximum Amount minus 2,025,316.
CLASS A PRINCIPAL PARITY AMOUNT: With respect to any Distribution
Date, the excess, if any, of (i) the aggregate Class Certificate Balance of the
Class A Certificates on that Distribution Date, after taking into account any
reduction therein on such Distribution Date from sources other than the Class A
Insurance Policy over (ii) the Current Maximum Amount on such Distribution Date.
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CLASS A-IO CERTIFICATES: All Certificates bearing the class
designation of "Class A-IO Certificates".
CLASS A-IO NOTIONAL BALANCE: With respect to any Distribution Date,
the lesser of (i) the Class A-IO Scheduled Notional Balance and (ii) the Current
Maximum Amount with respect to such Distribution Date.
CLASS A-IO SCHEDULED NOTIONAL BALANCE: The applicable amount set
forth in the following schedule:
Class A-IO Class A-IO Class A-IO
Period Notional Balance Period Notional Balance Period Notional Balance
1 $81,012,700 14 $60,955,600 27 $33,416,600
2 $79,540,500 15 $59,505,900 28 $32,619,500
3 $78,025,100 16 $58,089,800 29 $31,841,200
4 $76,466,200 17 $56,707,100 30 $31,081,400
5 $74,863,700 18 $55,357,100 31 $30,339,500
6 $73,272,300 19 $54,038,900 32 $29,615,200
7 $71,691,900 20 $52,751,900 33 $28,908,000
8 $70,122,400 21 $38,621,500 34 $28,217,500
9 $68,563,600 22 $37,701,300 35 $27,543,400
10 $67,015,300 23 $36,802,900 36 $26,885,300
11 $65,477,500 24 $35,925,700 37 and
12 $63,951,400 25 $35,069,300 thereafter $0
13 $62,438,700 26 $34,233,100
CLASS A-IO WAC RATE: With respect to any Distribution Date, (a) the
product of the Pass-Through Rate for the Class A-IO Certificates and the Class
A-IO Scheduled Notional Balance prior to such Distribution Date divided by (b)
the Current Maximum Amount on such Distribution Date.
CLASS B-1 CERTIFICATES: All Certificates bearing the class
designation of "Class B-1 Certificates".
CLASS B-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2
Certificates (after taking into account distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), and (D) the Class Certificate
Balance of the Class B-1 Certificates immediately prior to such Distribution
Date over (ii) the lesser of (A) 94.30% of the Current Maximum Amount and (B)
the Current Maximum Amount minus approximately $2,025,316.
19
CLASS B-2 CERTIFICATES: All Certificates bearing the class
designation of "Class B-2 Certificates".
CLASS B-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2
Certificates (after taking into account distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (D) the Class Certificate
Balance of the Class B-1 Certificates (after taking into account distribution of
the Class B-1 Principal Distribution Amount on such Distribution Date), and (E)
the Class Certificate Balance of the Class B-2 Certificates immediately prior to
such Distribution Date over (ii) the lesser of (A) 97.50% of the Current Maximum
Amount and (B) the Current Maximum Amount minus approximately $2,025,316.
CLASS CERTIFICATE BALANCE: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
CLASS M-1 CERTIFICATES: All Certificates bearing the class
designation of "Class M-1 Certificates".
CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 75.50%
of the Current Maximum Amount and (B) the Current Maximum Amount MINUS
approximately $2,025,316.
CLASS M-2 CERTIFICATES: All Certificates bearing the class
designation of "Class M-2 Certificates".
CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class A Principal Distribution Amount on
such Distribution Date), and (C) the Class Certificate Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 86.00% of the Current Maximum Amount and (B) the Current Maximum Amount
MINUS approximately $2,025,316.
CLASS P CERTIFICATES: All Certificates bearing the class designation
of "Class P Certificates".
CLASS R CERTIFICATES: All Certificates bearing the class designation
of "Class R Certificates".
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CLASS X CERTIFICATES: All Certificates bearing the designation of
"Class X Certificates".
CLASS X DISTRIBUTABLE AMOUNT: On any Distribution Date, the sum of
(i) the amount of interest that has accrued on the Class X Regular Interest and
not applied as an Extra Principal Distribution Amount on such Distribution Date,
plus any such accrued interest remaining undistributed from prior Distribution
Dates, and (ii) any portion of the principal balance of the Class X Regular
Interest which is distributable as a Subordination Reduction Amount, less any
amounts paid as a Basis Risk Payment.
CLOSING DATE: July 31, 2002.
CODE: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COLLECTION ACCOUNT: As defined in Section 3.10(a).
COMMUNITY BANK: Community Bank of Northern Virginia, a Virginia
corporation.
COMMUNITY BANK ASSIGNMENT AGREEMENT: The Assignment and Recognition
Agreement, dated as of July 31, 2002, by and among the Unaffiliated Seller, the
Depositor and Community Bank, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Community Bank
in connection with any Subsequent Transfer of Community Bank Mortgage Loans.
COMMUNITY BANK MORTGAGE LOAN: A Mortgage Loan which was acquired
from Community Bank by the Unaffiliated Seller pursuant to the Community Bank
Purchase Agreement, and which has been acquired by the Trust Fund.
COMMUNITY BANK PURCHASE AGREEMENT: The Mortgage Loan Purchase and
Warranties Agreement, dated as of July 4, 2002, by and between the Unaffiliated
Seller and Community Bank.
COMPENSATING INTEREST: For any Distribution Date, the lesser of (a)
the Prepayment Interest Shortfall, if any, for the Distribution Date, and (b)
the amount of the Servicing Fee payable to the Servicer for such Distribution
Date.
CONDEMNATION PROCEEDS: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
CORPORATE TRUST OFFICE: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which office at the date of the
execution of this Agreement is located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx,
Xxxxxxxxxx 00000, Attn: Trust Administration-DC02M2, facsimile no. (714)
247-6478 and which is the address to which notices to and correspondence with
the Trustee should be directed.
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CORRESPONDING CLASS: The class of interests in any REMIC created
under this Agreement that correspond to the Class of interests in another such
REMIC or to a Class of Certificates in the manner set out below:
MIDDLE TIER UPPER TIER CORRESPONDING
CLASS DESIGNATION INTEREST CERTIFICATE
----------------- ----------- -------------
Class MT-A Class A Class A
Class MT-M-1 Class M-1 Class M-1
Class MT-M-2 Class M-2 Class M-2
Class MT-B-1 Class B-1 Class B-1
Class MT-B-2 Class B-2 Class B-2
Class MT-A-IO Class A-IO Class A-IO
CUMULATIVE LOSS PERCENTAGE: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Applied Realized Loss Amounts incurred from the Cut-off Date to the
last day of the preceding calendar month and the denominator of which is the
Scheduled Principal Balance of the Mortgage Loans as of the Cut-off Date.
CURRENT MAXIMUM AMOUNT: With respect to any Distribution Date, the
sum of (i) the aggregate of the Stated Principal Balances of the Mortgage Loans
in the Trust at such time, and (ii) with respect to each Distribution Date on or
prior to October 25, 2002, the Pre-Funding Amount immediately prior to the
Distribution Date, net of investment earnings on deposit therein.
CUSTODIAL FILE: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (i) - (viii) of Section 2.01(c).
CUT-OFF DATE: With respect to the Initial Mortgage Loans, July 1,
2002, and with respect to each Subsequent Mortgage Loan, the related Subsequent
Cut-off Date.
CUT-OFF DATE POOL PRINCIPAL BALANCE: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
DATA TAPE INFORMATION: The information provided by the Unaffiliated
Seller as of July 1, 2002 to the Depositor setting forth the following
information with respect to each Mortgage Loan: (1) the Mortgagor's name; (2) as
to each Mortgage Loan, the Scheduled Principal Balance as of the Cut-off Date;
(3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating whether the
Mortgaged Property is owner-occupied; (6) the type of Mortgaged Property; (7)
the first date on which the Monthly Payment was due on the Mortgage Loan and, if
such date is not consistent with the Due Date currently in effect, such Due
Date; (8) the "paid through date" based on payments received from the related
Mortgagor; (9) the original principal amount of the Mortgage Loan; (10) with
respect to Adjustable Rate Mortgage Loans, the
22
Maximum Mortgage Rate; (11) the type of Mortgage Loan (I.E., fixed or
adjustable); (12) a code indicating the purpose of the loan (I.E., purchase,
rate and term refinance, equity take-out refinance); (13) a code indicating the
documentation style (I.E., full, asset verification, income verification and no
documentation); (14) the credit risk score (FICO score); (15) the loan credit
grade classification (as described in the Underwriting Guidelines); (16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17)
the Mortgage Rate at origination; (18) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(19) the Value of the Mortgaged Property; (20) a code indicating the type of
Prepayment Charges applicable to such Mortgage Loan, if any; and (21) with
respect to each Adjustable Rate Mortgage Loan, the Periodic Mortgage Rate Cap.
With respect to the Mortgage Loans in the aggregate, the Data Tape Information
shall set forth the following information, as of the Cut-off Date: (1) the
number of Mortgage Loans; (2) the current aggregate outstanding principal
balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
DEFINITIVE CERTIFICATES: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
DELAY CERTIFICATES: As specified in the Preliminary Statement.
DELETED MORTGAGE LOAN: A Mortgage Loan that is repurchased by the
Unaffiliated Seller or the related Originator, as applicable, or replaced with a
Substitute Mortgage Loan in accordance with the terms hereof and the related
Mortgage Loan Purchase Agreement.
DELINQUENCY TRIGGER EVENT: With respect to a Distribution Date after
the Stepdown Date, the event that is in effect if the quotient (expressed as a
percentage) of (x) the three month rolling daily average of the Stated Principal
Balance of 60+ Day Delinquent Loans as of the last day of the related Due
Period, over (y) the Pool Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period exceeds 38.00% of the prior period's
Senior Enhancement Percentage.
DELINQUENT: A mortgage loan is "Delinquent" if any monthly payment
due on a due date is not made by the close of business on the next scheduled due
date for that mortgage loan (including all Mortgage Loans in foreclosure,
Mortgage Loans in respect of REO Properties
23
and Mortgage Loans for which the related Mortgagor has declared bankruptcy). A
mortgage loan is "30 days Delinquent" if the monthly payment has not been
received by the close of business on the corresponding day of the month
immediately succeeding the month in which that monthly payment was due or, if
there was no corresponding date (E.G., as when a 30-day month follows a 31-day
month in which the payment was due on the 31st day of that month), then on the
last day of that immediately preceding month; and similarly for "60 days
Delinquent" and "90 days Delinquent," etc.
DELIVERY DATE: With respect to the Initial Mortgage Loans, the
Closing Date; with respect to any Subsequent Mortgage Loans, the related
Subsequent Transfer Date therefor.
DENOMINATION: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
DEPOSITOR: Xxxxxx Xxxxxxx ABS Capital I Inc., a Delaware
corporation, or its successor in interest.
DEPOSITORY: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DETERMINATION DATE: With respect to each Remittance Date, the
Business Day immediately preceding such Remittance Date.
DISTRIBUTION ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name of the Trustee
for the benefit of the Certificateholders and designated "Deutsche Bank National
Trust Company, in trust for registered holders of CDC Mortgage Capital Trust
2002-HE2, Mortgage Pass-Through Certificates, Series 2002-HE2".
DISTRIBUTION DATE: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such day is not a Business Day, the
next succeeding Business Day, commencing in August 2002.
DOCUMENT EXCEPTION REPORT: The report attached to Exhibit G hereto.
DUE DATE: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
DUE PERIOD: With respect to each Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
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ELIGIBLE ACCOUNT: Either (i) a demand account maintained with an
Eligible Institution or (ii) a trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in its
fiduciary capacity or (iii) any other account acceptable to each Rating Agency.
Eligible Accounts may bear interest, and may include, if otherwise qualified
under this definition, accounts maintained with the Trustee.
ELIGIBLE INSTITUTION: A federal or state chartered depository
institution or trust company, which (x) with respect to any Eligible Account,
the amounts on deposit in which will be held for 30 days or less, the commercial
paper, short term debt obligations, or other short-term deposits of which are
rated at least A-1 by Fitch, A-1 by Standard & Poor's and "P-1" by Moody's (or a
comparable rating if another Rating Agency is specified by the Depositor by
written notice to the Servicer and the Trustee) or (y) with respect to any
Eligible Account, the amounts on deposit in which will be held for more than 30
days, the long-term unsecured debt obligations of which are rated at least AA-
by Fitch, AA- by Standard & Poor's and Aa3 by Moody's (or a comparable rating if
another Rating Agency is specified by the Depositor by written notice to the
Servicer and the Trustee).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-QUALIFYING UNDERWRITING: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption 97-34, 62 Fed. Reg. 39021 (1997), as amended (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-RESTRICTED CERTIFICATE: As specified in the Preliminary
Statement.
ESCROW ACCOUNT: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
ESCROW PAYMENTS: As defined in Section 3.09(b) of this Agreement.
EVENT OF DEFAULT: As defined in Section 7.01.
EXCESS RESERVE FUND ACCOUNT: The separate Eligible Account created
and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c) in the
name of the Trustee for the benefit of the Offered Certificateholders and
designated "Deutsche Bank National Trust Company, in trust for registered
holders of CDC Mortgage Capital Trust 2002-HE2, Mortgage Pass-Through
Certificates, Series 2002-HE2".
EXCESS SUBORDINATED AMOUNT: With respect to any Distribution Date,
the excess, if any, of (a) the Subordinated Amount on such Distribution Date
over (b) the Specified Subordinated Amount for such Distribution Date.
EXPENSE FEES: As to each Mortgage Loan, the sum of the Servicing Fee
and the Trustee Fee.
EXPENSE FEE RATE: As to each Mortgage Loan, a per annum rate equal
to the sum of the Servicing Fee Rate and the Trustee Fee Rate.
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EXTRA PRINCIPAL DISTRIBUTION AMOUNT: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the Subordination Deficiency for such Distribution Date.
XXXXXX MAE: The Federal National Mortgage Association, or any
successor thereto.
XXXXXX XXX GUIDES: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FINAL CERTIFICATION: A certification submitted by the Trustee in
substantially the form of Exhibit G hereto.
FINAL RECOVERY DETERMINATION: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by an Originator as contemplated by the Assignment and Recognition Agreements, a
determination made by the Servicer that all Insurance Proceeds, Liquidation
Proceeds and other payments or recoveries which the Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made thereby.
FINAL SCHEDULED DISTRIBUTION DATE: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in each of the
following months:
FINAL SCHEDULED
DISTRIBUTION DATE
-----------------
Class A Certificates........................................ January 25, 2033
Class A-IO Certificates..................................... August 25, 2005
Class M-1 Certificates...................................... January 25, 2033
Class M-2 Certificates...................................... January 25, 2033
Class B-1 Certificates...................................... January 25, 2033
Class B-2 Certificates...................................... January 25, 2033
Class X Certificates........................................ January 25, 2033
Class P Certificates........................................ January 25, 2033
Class R Certificates........................................ January 25, 2033
FITCH: Fitch, Inc. If Fitch is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 10.05(b) the address for notices
to Fitch shall be Fitch, Inc., Xxx Xxxxx Xx. Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Residential Mortgage Surveillance Group - Xxxxxx Xxxxxxx ABS Capital
I Inc. 2002-HE2, or such other address as Fitch may hereafter furnish to the
Depositor and the Servicer
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FIXED RATE MORTGAGE LOAN: A Mortgage Loan bearing interest at a
fixed rate.
FLOATING RATE CERTIFICATES: As specified in the Preliminary
Statement.
FLOOR AMOUNT: An amount equal to the product of (x) 0.50% and (y)
the Maximum Pool Principal Balance.
GROSS MARGIN: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
IFC: IMPAC Funding Corporation, a California corporation.
IFC ASSIGNMENT AGREEMENT: The Assignment and Recognition Agreement,
dated as of July 31, 2002, by and among the Unaffiliated Seller, the Depositor
and IFC, and each other Assignment and Recognition Agreement by and among the
Unaffiliated Seller, the Depositor and IFC in connection with any Subsequent
Transfer of IFC Mortgage Loans.
IFC MORTGAGE LOAN: A Mortgage Loan which was acquired from IFC by
the Unaffiliated Seller pursuant to the IFC Purchase Agreement, and which has
been acquired by the Trust Fund.
IFC PURCHASE AGREEMENT: The Mortgage Loan Purchase and Warranties
Agreement, dated as of July 10, 2001 by and between the Unaffiliated Seller and
IFC.
I&I PAYMENTS: Payments due and owing under the Insurance and
Indemnity Agreement.
INDEX: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
INITIAL CUT-OFF DATE: July 1, 2002.
INITIAL MORTGAGE LOANS: The Mortgage Loans delivered by the
Depositor on the Startup Date.
INITIAL PRE-FUNDED AMOUNT: The amount of $39,433,311.
INSURANCE AND INDEMNITY AGREEMENT: The Insurance and Indemnity
Agreement dated as of July 1, 2002 among the Class A Certificate Insurer, the
Servicer and the Unaffiliated Seller, as such agreement may be amended or
supplemented in accordance with the provisions thereof.
INSURED PAYMENT: With respect to any Distribution Date, the Class A
Deficiency for that Distribution Date.
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INSURANCE POLICY: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
INSURANCE PROCEEDS: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
INTEREST ACCRUAL PERIOD: With respect to any Distribution Date, (i)
with respect to each Class of Non-Delay Certificates (except for the Class A-IO
Certificates) and the Corresponding Class of Lower Tier Regular Interests and
any Distribution Date, the period beginning with the immediately preceding
Distribution Date (or in the case of the first Distribution Date, the period
from and including the Closing Date to but excluding such first Distribution
Date) and ending on the day prior to the current Distribution Date (on an
actual/360 day count basis); (ii) for the Class A-IO Certificate, the period
beginning on the first day of the calendar month and ending on the last day of
the calendar month immediately preceding such Distribution Date (on a 30/360 day
count basis).
INTEREST AMOUNT AVAILABLE: With respect to any Distribution Date,
the sum of (i) the Interest Remittance Amount received by the Trustee from the
Servicer on the related Remittance Date and (ii) the Capitalized Interest
Requirement, if any, deposited to the Distribution Account on such Distribution
Date.
INTEREST RATE ADJUSTMENT DATE: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
INTEREST RATE CAP PAYMENT: Beginning on the first Distribution Date
and continuing through the 23 Distribution Dates thereafter, the amount equal to
the positive difference, if any, between LIBOR and 2.50% (on an actual/360 day
count basis).
INTEREST REMITTANCE AMOUNT: With respect to any Remittance Date, the
sum, without duplication, of:
(i) all scheduled installments of interest due on the Mortgage
Loans during the related Due Period and received or advanced by the
Servicer on or prior to the related Remittance Date;
(ii) Compensating Interest paid by the Servicer on such Remittance
Date;
(iii) the interest component of all Substitution Adjustment Amounts
and Repurchase Prices;
(iv) the interest component of all Condemnation Proceeds, Insurance
Proceeds and Liquidation Proceeds received by the Servicer during the
related Prepayment Period (in each case, net (but not to be reduced below
zero) of unreimbursed expenses incurred in connection with a liquidation
or foreclosure and unreimbursed Advances, if any); and
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(v) the interest component of the proceeds of any termination of
the Trust Fund.
REDUCED by the Servicing Fee for the related Due Period, together with amounts
in reimbursement for Advances previously made with respect to the Mortgage Loans
and other amounts as to which the Servicer is entitled to be reimbursed pursuant
to the Agreement.
INVESTMENT ACCOUNT: As defined in Section 3.12(a).
LATE COLLECTIONS: With respect to any Mortgage Loan and any Due
Period, all amounts received subsequent to the Determination Date immediately
following such Due Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of principal and/or interest due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) but
delinquent for such Due Period and not previously recovered.
LATE PAYMENT RATE: Has the meaning ascribed thereto in the Insurance
and Indemnity Agreement.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; PROVIDED that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Servicer, at
approximately 11:00 a.m. (New York City time) on such date for one-month U.S.
dollar loan to leading European banks.
LIBOR CERTIFICATES: As specified in the Preliminary Statement.
LIBOR DETERMINATION DATE: With respect to any Interest Accrual
Period (other than the initial Interest Accrual Period) for the LIBOR
Certificates, the second London Business Day preceding the commencement of such
Interest Accrual Period.
LIQUIDATED MORTGAGE LOAN: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified (in accordance with this Agreement) that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property.
29
LIQUIDATION EVENT: With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from coverage under this Agreement by reason of its being purchased,
sold or replaced pursuant to or as contemplated by this Agreement. With respect
to any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from coverage under this Agreement by reason of its being purchased
pursuant to this Agreement.
LIQUIDATION PROCEEDS: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through trustee's sale,
foreclosure sale or otherwise.
LOAN-TO-VALUE RATIO or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the original outstanding principal amount
of the Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the
lesser of (a) the Appraised Value of the Mortgaged Property at origination, and
(b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
LONDON BUSINESS DAY: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
LOSS TRIGGER EVENT: With respect to any Distribution Date, the event
that is in effect if the aggregate amount of Applied Realized Loss Amounts
incurred since the related Cut-off Date through the last day of the related
Prepayment Period divided by the Maximum Pool Principal Balance exceeds the
applicable percentage as follows with respect to such Distribution Date: (a)
3.50% commencing with the first Distribution Date, plus an additional 1/12th of
1.75% for each month thereafter for the Distribution Dates occurring from August
2005 to July 2006; (b) 5.25% for the first month, plus an additional 1/12th of
1.00% for each month thereafter for the Distribution Dates occurring from August
2006 to July 2007; (c) 6.25% for the first month, plus an additional 1/12th of
0.75% for each month thereafter for Distribution Dates occurring from August
2007 to July 2008; (d) 7.00% for the first month, plus an additional 1/12th of
0.25% for each month thereafter for Distribution Dates occurring from August
2008 to July 2009; and (e) 7.25% for Distribution Dates occurring in August 2009
and thereafter.
LOWER TIER REGULAR INTEREST: As described in the Preliminary
Statement.
LOWER TIER REMIC: As described in the Preliminary Statement
MAXIMUM MORTGAGE RATE: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Mortgage Loan.
MAXIMUM POOL PRINCIPAL BALANCE: The aggregate Stated Principal
Balances of all Initial Mortgage Loans as of the Initial Cut-off Date plus the
Initial Pre-Funded Amount.
MIDDLE TIER REGULAR INTEREST: As described in the Preliminary
Statement.
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MIDDLE TIER REMIC: As described in the Preliminary Statement.
MINIMUM MORTGAGE RATE: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Mortgage Loan.
MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 4.03.
MOODY'S: Xxxxx'x Investors Service, Inc. If Xxxxx'x is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(b)
the address for notices to Moody's shall be Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor and the Servicer.
MORTGAGE: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
MORTGAGE FILE: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
MORTGAGE LOAN PURCHASE AGREEMENT: The BNC Purchase Agreement, the
IFC Purchase Agreement, the People's Choice Purchase Agreement, the Chapel
Mortgage Purchase Agreement or the Community Bank Purchase Agreement, as
applicable.
MORTGAGE LOANS: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan, excluding
replaced or repurchased Mortgage Loans.
MORTGAGE LOAN SCHEDULE: A schedule of Mortgage Loans annexed hereto
as Schedule I, such schedule setting forth the following information with
respect to each Mortgage Loan: (1) the Originator's Mortgage Loan number; (2)
the city, state and zip code of the Mortgaged Property; (3) a code indicating
whether the Mortgaged Property is a single family residence, two-family
residence, three-family residence, four-family residence, PUD or condominium;
(4) the current Mortgage Interest Rate; (5) the current net Mortgage Rate; (6)
the current Monthly Payment; (7) the Gross Margin; (8) the original term to
maturity; (9) the scheduled maturity date; (10) the principal balance of the
Mortgage Loan as of the Cut-off Date after deduction of payments of principal
due on or before the Cut-off Date whether or not collected; (11) the
Loan-to-Value Ratio; (12) the next Interest Rate Adjustment Date; (13) the
lifetime Mortgage Interest Rate Cap; (14) whether the Mortgage Loan is
convertible or not; (15) a code indicating the mortgage guaranty insurance
company; (16) the Servicing Fee; (17) the identity of the related Originator of
such Mortgage Loan; (18) the Mortgagor's name; and (19)
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the "paid-through" date (based on payments received from the related Mortgagor)
as of the Cut-off Date.
MORTGAGE NOTE: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
MORTGAGE RATE: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time with respect to Adjustable Rate
Mortgage Loans.
MORTGAGE RATE CAPS: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
MORTGAGED PROPERTY: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
MORTGAGOR: The obligor(s) on a Mortgage Note.
NET MONTHLY EXCESS CASH FLOW: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
NET PREPAYMENT INTEREST SHORTFALL: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum of
the Compensating Interest payments made on such Distribution Date.
NIM CLOSING DATE: On or about August 9, 2002.
NIMS TRUST: CDC Mortgage Capital Inc. NIM Trust 2002-HE2N, a
Delaware business trust.
NON-DELAY CERTIFICATES: As specified in the Preliminary Statement.
NONRECOVERABLE ADVANCE: Any Servicing Advances previously made or
proposed to be made in respect of a Mortgage Loan or REO Property, which, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed Servicing Advance, would not, be ultimately recoverable from related
Insurance Proceeds, Liquidation Proceeds or otherwise. The determination by the
Servicer that it has made a Nonrecoverable Advance or that any proposed
Servicing Advances, if made, would constitute a Nonrecoverable Advance, shall be
evidenced by an Officers' Certificate delivered to the Trustee.
NONRECOVERABLE P&I ADVANCE: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related late
payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.
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NOTICE OF FINAL DISTRIBUTION: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
OFFERED CERTIFICATES: As specified in the Preliminary Statement.
OFFICER'S CERTIFICATE: A certificate signed by an officer of the
Servicer with responsibility for the servicing of the Mortgage Loans and listed
on a list delivered to the Trustee pursuant to this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may be
in-house counsel for the Servicer or the Subservicer, reasonably acceptable to
the Trustee and to the Class A Certificate Insurer, PROVIDED that any Opinion of
Counsel relating to (a) qualification of the Mortgage Loans in a REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of the
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Servicer of the Mortgage Loans or in an
affiliate of either and (iii) is not connected with the Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
OPTIONAL TERMINATION DATE: means:
(i) For so long as the Class X Certificates are 100% owned, either
directly or indirectly, by the Unaffiliated Seller or any Affiliate
thereof, then the Servicer may cause the Optional Termination Date to
occur on any Distribution Date when the aggregate Stated Principal Balance
of the Mortgage Loans is 10.00% or less of the Maximum Pool Principal
Balance; and
(ii) If the Class X Certificates are not 100% owned, either
directly or indirectly, by the Unaffiliated Seller or any Affiliate
thereof, then the Holders of a majority in Class Certificate Balance of
the Class X Certificates may cause the Optional Termination Date to occur
on any Distribution Date when the aggregate Stated Principal Balance of
the Mortgage Loans is 10.00% or less of the Maximum Pool Principal
Balance, and, if such Class X Certificateholders do not do so, then the
Servicer shall also have such right.
ORIGINATOR: The party that originated or acquired a Mortgage Loan
and, more specifically, (i) with respect to any BNC Mortgage Loan, BNC, (ii)
with respect to any IFC Mortgage Loan, IFC, (iii) with respect to any People's
Choice Mortgage Loan, People's Choice, (iv) with respect to any Chapel Mortgage
Mortgage Loan, Chapel Mortgage and (v) with respect to any Community Bank
Mortgage Loan, Community Bank.
OTS: Office of Thrift Supervision, and any successor thereto.
OUTSTANDING: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
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(i) Certificates theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
OUTSTANDING MORTGAGE LOAN: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
OWNERSHIP INTEREST: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I ADVANCE: As to any Mortgage Loan or REO Property, any advance
made by the Servicer in respect of any Remittance Date with respect to any
Mortgage Loan representing the aggregate of all payments of principal and
interest on such Mortgage Loan, net of the related Servicing Fee, that were due,
and that were delinquent or unpaid on the related Determination Date, plus
certain amounts representing assumed payments not covered by any current net
income on the Mortgaged Properties acquired by foreclosure or deed in lieu of
foreclosure as determined pursuant to Section 4.01.
PASS-THROUGH MARGIN: With respect to each Class of Regular
Certificates, prior to the first Distribution Date after the Optional
Termination Date the following percentages: Class A Certificates, 0.290%, Class
M-1 Certificates, 0.700%, Class M-2 Certificates, 1.500%, Class B-1
Certificates, 2.000% and Class B-2 Certificates, 2.650%. On the first
Distribution Date after the Optional Termination Date, the Pass-Through Margins
shall increase to: Class A Certificates, 0.580%, Class M-1 Certificates, 1.050%,
Class M-2 Certificates, 2.250%, Class B-1 Certificates, 3.000% and Class B-2
Certificates, 3.975%.
PASS-THROUGH RATE: For each Class of Certificates and each Lower
Tier Regular Interest, the per annum rate set forth or calculated in the manner
described in the Preliminary Statement.
PEOPLE'S CHOICE: People's Choice Home Loan, Inc., a Wyoming
corporation.
PEOPLE'S CHOICE ASSIGNMENT AGREEMENT: The Assignment and Recognition
Agreement, dated as of July 31, 2002, by and among the Unaffiliated Seller, the
Depositor and People's Choice, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and People's
Choice in connection with any Subsequent Transfer of People's Choice Mortgage
Loans.
PEOPLE'S CHOICE MORTGAGE LOAN: A Mortgage Loan which was acquired
from People's Choice by the Unaffiliated Seller pursuant to the People's Choice
Purchase Agreement, and which has been acquired by the Trust Fund.
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PEOPLE'S CHOICE PURCHASE AGREEMENT: The Mortgage Loan Purchase and
Warranties Agreement, dated as of April 16, 2002, by and between the
Unaffiliated Seller and People's Choice.
PERCENTAGE INTEREST: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
PERIODIC MORTGAGE RATE CAP: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Interest Rate adjustment as
set forth in the related Mortgage Note.
PERMITTED INVESTMENTS: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, PROVIDED such obligations are backed by
the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by, any Eligible Institution;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Eligible Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any state thereof and that are rated by each Rating Agency
that rates such securities in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency that rates such securities in
its highest short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds, including money market funds
advised by the Depositor or an Affiliate thereof, that have been rated
"Aaa" by Moody's, "AAA" by Fitch and "AAA" by Standard & Poor's; and
(vii) if previously confirmed in writing to the Trustee and to the
Class A Certificate Insurer, any other demand, money market or time
deposit, or any other
35
obligation, security or investment, as may be acceptable to the Rating
Agencies as a permitted investment of funds backing "Aaa" or "AAA" rated
securities;
PROVIDED, HOWEVER, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
PERMITTED TRANSFEREE: Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person, (vi) an "electing large partnership" within the meaning of section 775
of the Code and (vii) any other Person so designated by the Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause the REMIC hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.
PERSON: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
PHYSICAL CERTIFICATES: As specified in the Preliminary Statement.
POOL STATED PRINCIPAL BALANCE: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date which were Outstanding Mortgage Loans as of the last day of
the related Due Period.
PREFERENCE AMOUNT: Any amounts distributed in respect of the Class A
Certificates which are recovered from any Holder of a Class A Certificate as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code or other similar law in accordance with a final, nonappealable
order of a court having competent jurisdiction and which have not theretofore
been repaid to such Holder.
PREFERENCE CLAIM: As defined in Section 4.05(f) hereof.
PRE-FUNDING ACCOUNT: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(f) in the name of the Trustee
for the benefit of the
36
Certificateholders, and designated "Deutsche Bank National Trust Company, in
trust for registered holders of CDC Mortgage Capital Trust 2002-HE2, Mortgage
Pass-Through Certificates, Series 2002-HE2".
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 Date and
ending on the earliest to occur of (i) the date on which the amount on deposit
in the Pre-Funding Account (exclusive of any investment earnings) is less than
$100,000, (ii) the date on which any Event of Default occurs and (iii) October
24, 2002.
PREMIUM AMOUNT: The product of the Premium Rate and the Certificate
Balance of the Class A Certificates immediately prior to such Distribution Date.
PREMIUM RATE: The rate at which the "Premium" is determined as
described in the letter dated July 31, 2002 between the Unaffiliated Seller and
the Class A Certificate Insurer (a copy of which shall be provided by the
Unaffiliated Seller to the Trustee).
PREPAYMENT CHARGE: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment in full pursuant to the terms
of the related Mortgage Note.
PREPAYMENT INTEREST SHORTFALL: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was during the related Prepayment Period
the subject of a Principal Prepayment in Full that was applied by the Servicer
to reduce the outstanding principal balance of such Mortgage Loan on a date
preceding the Due Date in the succeeding Prepayment Period, an amount equal to
the product of (a) the Mortgage Rate net of the Servicing Fee Rate for such
Mortgage Loan, (b) the amount of the Principal Prepayment for such Mortgage
Loan, (c) 1/360 and (d) the number of days commencing on the date on which such
Principal Prepayment was applied and ending on the last day of the related
Prepayment Period.
PREPAYMENT PERIOD: With respect to any Distribution Date, the
calendar month preceding the calendar month in which such Distribution Date
occurs.
PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
PRINCIPAL PREPAYMENT: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding any prepayment
penalty or premium thereon and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
37
PRINCIPAL PREPAYMENT IN FULL: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
PRINCIPAL REMITTANCE AMOUNT: With respect to any Remittance Date,
the sum, without duplication, of:
(i) all scheduled installments of principal due on the Mortgage
Loans during the related Due Period and received or advanced by the Servicer on
or prior to the related Remittance Date;
(ii) the principal component of all Condemnation Proceeds,
Insurance Proceeds and Liquidation Proceeds during the related Prepayment Period
(in each case, net of remaining (I.E., not deducted from the Interest Remittance
Amount) unreimbursed expenses incurred in connection with a liquidation or
foreclosure and unreimbursed Advances, if any);
(iii) all partial or full prepayments on the Mortgage Loans received
during the related Prepayment Period;
(iv) the principal component of all Substitution Adjustment Amounts
and Repurchase Prices; and
(v) the principal component of the proceeds of any termination of
the Trust Fund.
reduced by remaining amounts (I.E., not deducted from the Interest Remittance
Amount) in reimbursement for Advances previously made with respect to the
Mortgage Loans and other amounts as to which the Servicer is entitled to be
reimbursed pursuant to this Agreement.
PRIVATE CERTIFICATES: As specified in the Preliminary Statement.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement, dated July 23,
2002, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: Planned Unit Development.
QUALIFIED INSURER: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
FNMA- or FHLMC-approved mortgage insurer or having a claims paying ability
rating of at least "AA" or equivalent rating by a nationally recognized
statistical rating organization. Any replacement insurer with respect to a
Mortgage Loan must have at least as high a claims paying ability rating as the
insurer it replaces had on the Closing Date.
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RATING AGENCY: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor and the Servicer.
RECORD DATE: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
PROVIDED, HOWEVER, that for any Certificate issued in Definitive Form, the
Record Date shall be the close of business on the last Business Day of the month
immediately preceding such applicable Distribution Date.
REFERENCE BANK: As defined in Section 4.04.
REGULAR CERTIFICATES: As specified in the Preliminary Statement.
REIMBURSEMENT AMOUNT: As of any Distribution Date, the sum of (a)(i)
all Insured Payments previously received by the Trustee and all Preference
Amounts previously paid by the Class A Certificate Insurer and in each case not
previously repaid to the Class A Certificate Insurer pursuant to Sections
6.05(a)(ii) hereof plus (ii) interest accrued on each such Insured Payment and
Preference Amounts not previously repaid calculated at the Late Payment Rate
from the date the Trustee received the related Insured Payment or Preference
Amounts were paid by the Class A Certificate Insurer and (b)(i) any amounts then
due and owing to the Class A Certificate Insurer under the Insurance and
Indemnity Agreement (excluding the Premium Amount due on such Distribution
Date), as certified to the Trustee by the Class A Certificate Insurer plus (ii)
interest on such amounts at the rate specified in the Insurance and Indemnity
Agreement. The Class A Certificate Insurer shall notify the Trustee and the
Unaffiliated Seller of the amount of any Reimbursement Amount.
RELIEF ACT INTEREST SHORTFALL: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended,
and similar state laws.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.
REMIC PROVISIONS: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC TRUST: The segregated pool of assets consisting of the Trust
Fund, exclusive of Prepayment Charges and the Excess Reserve Fund Account.
39
REMITTANCE DATE: The 18th day (or if such 18th day is not a Business
Day, the first Business Day immediately preceding) of any month.
REO DISPOSITION: The final sale by the Servicer of any REO Property.
REO IMPUTED INTEREST: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO PROPERTY: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
REPRESENTATIVE: Xxxxxx Xxxxxxx & Co. Incorporated, as representative
on behalf of itself, Xxxxxx Brothers Inc. and Banc of America Securities LLC.
REPURCHASE PRICE: With respect to any Mortgage Loan, an amount equal
to the sum of (i) the unpaid principal balance of such Mortgage Loan as of the
date of repurchase and (ii) (x) if such Mortgage Loan is being repurchased by
the Unaffiliated Seller, the sum of (A) interest on such unpaid principal
balance of such Mortgage Loan at the Mortgage Rate from the last date through
which interest has been paid and distributed to the Trustee to the last day of
the month in which such repurchase occurs, (B) all unreimbursed Servicing
Advances and (C) all expenses reasonably incurred by the Servicer, the Trustee,
the Class A Certificate Insurer or the Unaffiliated Seller, as the case may be,
in respect of a breach or defect, including, without limitation, expenses
arising out of any such party's enforcement of the Originator's repurchase
obligation, to the extent not included in (B), or (y) if such Mortgage Loan is
being repurchased by the related Originator, all other amounts payable by such
Originator in accordance with the terms of the related Mortgage Loan Purchase
Agreement.
REQUEST FOR RELEASE: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit K.
RESIDUAL CERTIFICATES: As specified in the Preliminary Statement.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, any Assistant
Treasurer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers who at such
time shall be officers to whom, with respect to a particular matter, such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Agreement.
RULE 144A LETTER: As defined in Section 5.02(b).
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless
40
otherwise specified herein, shall give effect to any related Debt Service
Reduction and any Deficient Valuation that affects the amount of the monthly
payment due on such Mortgage Loan.
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan: (a)
as of the Cut-off Date, the outstanding principal balance of such Mortgage Loan
as of such date, net of the principal portion of all unpaid Monthly Payments, if
any, due on or before such date; (b) as of any Due Date subsequent to the
Cut-off Date up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such Mortgage Loan, the Scheduled
Principal Balance of such Mortgage Loan as of the Cut-off Date, minus the sum of
(i) the principal portion of each Monthly Payment due on or before such Due Date
but subsequent to the Cut-off Date, whether or not received, (ii) all Principal
Prepayments received before such Due Date but after the Cut-off Date, (iii) the
principal portion of all Liquidation Proceeds and Insurance Proceeds received
before such Due Date but after the Cut-off Date, net of any portion thereof that
represents principal due (without regard to any acceleration of payments under
the related Mortgage and Mortgage Note) on a Due Date occurring on or before the
date on which such proceeds were received and (iv) any reduction in the
principal balance of such Mortgage Loan incurred with respect thereto as a
result of a Deficient Valuation occurring before such Due Date, but only to the
extent such reduction in principal balance represents a reduction in the portion
of principal of such Mortgage Loan not yet due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) as of the
date of such Deficient Valuation; and (c) as of any Due Date subsequent to the
occurrence of a Liquidation Event with respect to such Mortgage Loan, zero.
SECURITIES ACT: The Securities Act of 1933, as amended.
SENIOR ENHANCEMENT PERCENTAGE: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount (in each case after taking into account the distributions of the
Principal Distribution Amount for such Distribution Date) by (y) the Current
Maximum Amount for that Distribution Date.
SENIOR SPECIFIED ENHANCEMENT PERCENTAGE: As of any date of
determination, 38.00%.
SERVICER: Ocwen Federal Bank FSB, a federally chartered savings
bank, and its successors and assigns, in its capacity as servicer hereunder.
SERVICER TERMINATION TEST: With respect to any Distribution Date,
the Servicer Termination Test will be failed with respect to the Servicer if
either:
(a) the Cumulative Loss Percentage exceeds (i) in months 1 through
24, 2.50%, (ii) in months 25 through 36, 4.00%, (iii) in months 37 through
48, 5.25% and (iv) in month 49 and thereafter, 6.70%; or
(b) the quotient (expressed as a percentage) of (x) the Stated
Principal Balance of Mortgage Loans 60 days Delinquent or more as of the
end of the related Due Period (including Mortgage Loans in bankruptcy,
foreclosure or represented by an REO
41
Property) over (y) the aggregate Stated Principal Balance of the Mortgage
Loans as of the end of the related Due Period, exceeds 20%.
SERVICING ADVANCES: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the performance of
its servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures and litigation, in
respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property and
(iv) the performance of its obligations under Section 3.01, Section 3.09,
Section 3.13 and Section 3.15 hereof. The Servicer shall not be required to make
any Nonrecoverable Advances.
SERVICING FEE: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the same principal amount
on which interest on such Mortgage Loan accrues for such calendar month. Such
fee shall be payable monthly, and shall be pro rated for any portion of a month
during which the Mortgage Loan is serviced by the Servicer under this Agreement.
The Servicing Fee is payable solely from, the interest portion (including
recoveries with respect to interest from Liquidation Proceeds and proceeds
received with respect to REO Properties, to the extent permitted by Section
3.11) of such Monthly Payment collected by the Servicer, or as otherwise
provided under Section 3.11.
SERVICING FEE RATE: With respect to each Mortgage Loan, 0.50% per
annum.
SERVICING FILE: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Trustee in the Custodial File
and copies of each of the other Mortgage Loan documents required to be delivered
by the related Originator pursuant to the terms of the related Mortgage Loan
Purchase Agreement.
SERVICING OFFICER: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
SIMILAR LAW: As defined in Section 5.02(b).
SPECIFIED SUBORDINATED AMOUNT: With respect to any Distribution Date
prior to the Stepdown Date, an amount equal to 1.25% of the Maximum Pool
Principal Balance and with respect to any Distribution Date on and after the
Stepdown Date, an amount equal to 2.50% of the Current Maximum Amount for that
Distribution Date, subject to a minimum amount equal to the Floor Amount;
PROVIDED, HOWEVER, that if, on any Distribution Date, a Trigger Event has
occurred, the Specified Subordinated Amount shall equal the Specified
Subordinated Amount for
42
the immediately preceding Distribution Date until the Distribution Date on which
a Trigger Event is no longer occurring.
STANDARD & POOR'S: Standard & Poor's Ratings Services, a division of
the XxXxxx-Xxxx Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 10.05(b) the
address for notices to Standard & Poor's shall be Xxxxxxxx & Xxxx'x, 00 Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance Group -
Xxxxxx Xxxxxxx ABS Capital I Inc. 2002-HE2, or such other address as Standard &
Poor's may hereafter furnish to the Depositor and the Servicer.
STARTUP DAY: The Closing Date.
STATED PRINCIPAL BALANCE: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Trustee with
respect to the related Mortgage Loan representing payments or recoveries of
principal, including Advances in respect of scheduled payments of principal. For
purposes of any Distribution Date, the Stated Principal Balance of any Mortgage
Loan will give effect to any scheduled payments of principal received or
advanced prior to the related Remittance Date and any unscheduled principal
payments and other unscheduled principal collections received during the related
Prepayment Period.
STEPDOWN DATE: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in August 2005 and (b) the Distribution Date on which the
aggregate Class Certificate Balances of the Class A Certificates are reduced to
zero and (ii) the first Distribution Date on which the Senior Enhancement
Percentage (calculated for this purpose only after taking into account scheduled
and unscheduled payments of principal on the Mortgage Loans on the last day of
the related Due Period but prior to any applications of Principal Distribution
Amount to the Offered Certificates on the applicable Distribution Date) is
greater than or equal to the Senior Specified Enhancement Percentage.
SUBORDINATED AMOUNT: As of any Distribution Date, the excess, if
any, of (a) the Current Maximum Amount for that Distribution Date on such
Distribution Date over (b) the aggregate of the Class Certificate Balances of
the Class A and Subordinated Certificates as of such Distribution Date (after
giving effect to the payment of the Principal Remittance Amount on such
Certificates on such Distribution Date).
SUBORDINATED CERTIFICATES: As specified in the Preliminary
Statement.
SUBORDINATION DEFICIENCY: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
SUBORDINATION REDUCTION AMOUNT: With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated Amount and
(b) the Total Monthly Excess Spread.
SUBSERVICER: As defined in Section 3.02(a).
43
SUBSERVICING ACCOUNT: As defined in Section 3.08.
SUBSERVICING AGREEMENT: As defined in Section 3.02 hereof.
SUBSEQUENT CUT-OFF DATE: As to any Subsequent Mortgage Loans, the
date specified in the Addition Notice delivered in connection therewith, which
date shall be the close of business on the first day of the month in which such
Subsequent Mortgage Loans will be conveyed to the Trust Fund.
SUBSEQUENT MORTGAGE LOANS: The Mortgage Loans hereafter transferred
and assigned to the Trust Fund pursuant to Section 2.01(d), each of which shall
have been purchased by the Unaffiliated Seller under a Mortgage Loan Purchase
Agreement.
SUBSEQUENT TRANSFER: The transfer and assignment by the Depositor to
the Trust of the Subsequent Mortgage Loans pursuant to the terms hereof.
SUBSEQUENT TRANSFER AGREEMENT: A subsequent transfer agreement in
substantially the form of Exhibit L.
SUBSEQUENT TRANSFER DATE: The Business Day on which a Subsequent
Transfer occurs.
SUBSTITUTE MORTGAGE LOAN: A Mortgage Loan substituted by the
Unaffiliated Seller or an Originator for a Deleted Mortgage Loan in accordance
with the terms of this Agreement or the related Mortgage Loan Purchase
Agreement, which must, on the date of such substitution, as confirmed in a
Request for Release, substantially in the form of Exhibit K, (i) have a Stated
Principal Balance, after deduction of the principal portion of the Scheduled
Payment due in the month of substitution, not in excess of, and not more than
10% less than, the Stated Principal Balance of the Deleted Mortgage Loan; (ii)
be accruing interest at a rate no lower than and not more than 1% per annum
higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio
no higher than that of the Deleted Mortgage Loan; (iv) have a remaining term to
maturity no greater than (and not more than one year less than that of) the
Deleted Mortgage Loan; and (v) comply with each representation and warranty set
forth in Sections 3.01(f) and (h) of the Unaffiliated Seller's Agreement and
each representation and warranty set forth in the applicable Mortgage Loan
Purchase Agreement.
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such term
pursuant to Section 2.03.
TAX SERVICE CONTRACT: As defined in Section 3.09(a).
TELERATE PAGE 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
TOTAL MONTHLY EXCESS SPREAD: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest collected (prior to the
Remittance Date) or advanced on the Mortgage Loans for Due Dates during the
related Due Period (net of Expense Fees, Premium
44
Amount and Reimbursement Amounts, if any) over (ii) the sum of the interest
payable to the Classes of Floating Rate Certificates and Class A-IO Certificates
on such Distribution Date.
TRANSFER: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
TRANSFER AFFIDAVIT: As defined in section 5.02(b).
TRANSFEROR CERTIFICATE: As defined in Section 5.02(b).
TRIGGER EVENT: The occurrence of either a Delinquency Trigger Event
or a Loss Trigger Event.
TRUST FUND: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) each
Account, and all amounts deposited therein pursuant to the applicable provisions
of this Agreement; (iii) property that secured a Mortgage Loan and has been
acquired by foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) all
rights of the Depositor against the Unaffiliated Seller under the Unaffiliated
Seller's Agreement; (v) all rights of the Depositor against each Originator
under the related Assignment and Recognition Agreement and the related Mortgage
Loan Purchase Agreement; (vi) the Class A Insurance Policy; (vii) the Cap
Agreement; and (viii) all proceeds of the conversion, voluntary or involuntary,
of any of the foregoing.
TRUSTEE: Deutsche Bank National Trust Company and its successors
and, if a successor trustee is appointed hereunder, such successor.
TRUSTEE FEE: As to any Distribution Date, an amount equal to the sum
of (a) the product of one-twelfth of the Trustee Fee Rate times the sum of (i)
the aggregate Stated Principal Balances of the Mortgage Loans at the end of the
prior Due Period, and (ii) the amount on deposit in the Pre-Funding Account at
the end of such prior Due Period and (b) any reasonable compensation and
expenses of a separate trustee or co-trustee to be paid pursuant to Section
8.10(d).
TRUSTEE FEE RATE: With respect to each Mortgage Loan, 0.0065% per
annum.
UNAFFILIATED SELLER'S AGREEMENT: The Unaffiliated Seller's
Agreement, dated as of the date hereof, among the Unaffiliated Seller and the
Depositor relating to the sale of the Mortgage Loans from the Unaffiliated
Seller to the Depositor.
UNPAID INTEREST AMOUNTS: As of any Distribution Date and any Class
of Certificates, the sum of (a) the excess of (i) the sum of the Accrued
Certificate Interest Distribution Amount for such Distribution Date and any
portion of such Accrued Certificate Interest Distribution Amount from prior
Distribution Dates remaining unpaid over (ii) the amount in respect of interest
on such Class of Certificates actually distributed on the preceding Distribution
Date and (b) 30 days' interest on such excess at the applicable Pass-Through
Rate (to the extent permitted by applicable law).
45
UNPAID REALIZED LOSS AMOUNT: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
Applied Realized Loss Amounts with respect to such Class over (ii) the sum of
all distributions in reduction of such Applied Realized Loss Amounts on all
previous Distribution Dates. Any amounts distributed to a Class of Subordinated
Certificates in respect of any Unpaid Realized Loss Amount will not be applied
to reduce the Class Certificate Balance of such Class.
UPPER TIER REGULAR INTEREST: As described in the Preliminary
Statement.
UPPER TIER REMIC: As described in the Preliminary Statement.
U.S. PERSON: Shall mean (i) a citizen or resident of the United
States; (ii) a corporation (or entity treated as a corporation for tax purposes)
created or organized in the United States or under the laws of the United States
or of any state thereof, including, for this purpose, the District of Columbia;
(iii) a partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United States or of any
state thereof, including, for this purpose, the District of Columbia (unless
provided otherwise by future Treasury regulations); (iv) an estate whose income
is includible in gross income for United States income tax purposes regardless
of its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control all substantial decisions of the
trust. Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
VOTING RIGHTS: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, (c) 2% of all Voting Rights shall be allocated to the
Class A-IO Certificates only during the first 36 Distribution Dates, and (d) the
remaining Voting Rights shall be allocated among Holders of the remaining
Classes of Certificates in proportion to the Certificate Balances of their
respective Certificates on such date.
WAC CAP: With respect to the Mortgage Loans as of any Distribution
Date, the product of (i) the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Mortgage Loans,
minus (a) the Class A-IO WAC Rate and (b) the Premium Rate, and (ii) a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of days in the Interest Accrual Period related to such Distribution Date.
46
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. CONVEYANCE OF MORTGAGE LOANS.
(a) The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee for the benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund, other than
any Subsequent Mortgage Loans, which will be so sold, transferred, assigned,
set-over and conveyed on the related Subsequent Transfer Date.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Unaffiliated Seller has delivered or caused to be delivered
to the Trustee for the benefit of the Certificateholders the following documents
or instruments with respect to each Mortgage Loan so assigned (to the extent
such documents or instruments are required to be delivered by the related
Originator under each Mortgage Loan Purchase Agreement):
(i) the original Mortgage Note bearing all intervening
endorsements evidencing a complete chain of assignment from the originator
to the related Originator, endorsed "Pay to the order of _________,
without recourse" and signed in the name of the related Originator by an
authorized officer. To the extent that there is no room on the face of the
Mortgage Notes for endorsements, the endorsement may be contained on an
allonge, if state law so allows and the Trustee is so advised by the
related Originator that state law so allows. If the Mortgage Loan was
acquired by an Originator in a merger, the endorsement must be by
"[related Originator], successor by merger to [name of predecessor]". If
the Mortgage Loan was acquired or originated by the related Originator
while doing business under another name, the endorsement must be by
"[related Originator], formerly known as [previous name]";
(ii) the original of any guarantee executed in connection with the
Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon. If
in connection with any Mortgage Loan, the original Mortgage with evidence
of recording thereon can not be delivered on or prior to the related
Delivery Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office retains the
original recorded Mortgage, then the related Originator, as required by
the terms of the related Mortgage Loan Purchase Agreement, will be
required to deliver to the Trustee a photocopy of such Mortgage and (i)
the original recorded Mortgage or a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the
original recorded Mortgage promptly upon receipt thereof by the related
Originator (but in any event within 360 days from the related Delivery
Date); or (ii) in the case of a Mortgage where a public recording office
retains the original recorded Mortgage or in the case where a Mortgage is
lost after recordation in a public recording
47
office, a copy of such Mortgage certified by such public recording office
to be a true and complete copy of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation
or extension agreements, if any, with evidence of recording thereon;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank, in form and substance acceptable for recording;
(vi) the originals of all intervening assignments of mortgage,
evidencing a complete chain of assignment from the originator to the
related Originator, with evidence of recording thereon or if any such
intervening assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains the
original recorded assignments of mortgage;
(vii) the original or duplicate lender's title policy and all
riders_thereto or, if such original is unavailable, either an original
title binder or an original or copy of the title commitment, and if copies
then certified to be true and complete by the title company; and
(viii) the security agreement, chattel mortgage or equivalent
document executed in connection with the Mortgage, if any.
From time to time, the Servicer shall forward to the Trustee
additional original documents, additional documents evidencing an assumption,
modification, consolidation or extension of a Mortgage Loan approved by the
Servicer, in accordance with the terms of this Agreement. All such mortgage
documents held by the Trustee as to each Mortgage Loan shall constitute the
"CUSTODIAL FILE".
On or prior to the related Delivery Date, the Unaffiliated Seller
shall deliver, or cause the related Originator to deliver, to the Trustee
Assignments of Mortgages, in blank, for each Mortgage Loan. If an Assignment of
Mortgage is required to be recorded pursuant to the terms hereof, the Trustee
shall promptly forward such Assignments of Mortgage to the Servicer for
recording. No later than thirty (30) Business Days following the date of receipt
by the Servicer of the recording information for a Mortgage, the Servicer shall
promptly submit or cause to be submitted for recording, at the expense of the
Unaffiliated Seller (the Unaffiliated Seller to seek reimbursement from the
related Originator under the applicable Mortgage Loan Purchase Agreement) in the
appropriate public office for real property records, each Assignment of Mortgage
referred to in Section 2.01(b)(v). Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignment of Mortgage shall not be required to be completed and
submitted for recording with respect to any Mortgage Loan (other than any
Mortgage Loan where the Mortgaged Property is located in any state where
recordation is required by any Rating Agency to obtain the initial ratings on
the Certificates, which states as of the date hereof, are Florida and Maryland)
until the earliest to occur of (i) direction by Class A Certificate Insurer or
(ii) upon a determination by the Servicer that recordation is necessary for the
enforcement of rights under, or satisfaction or assignment of, the related
Mortgage, at which time, the Servicer shall record any such
48
Assignment of Mortgage in accordance with the terms hereof. If any Assignment of
Mortgage is required to be recorded pursuant to the terms hereof, the Mortgage
shall be assigned from the related Originator, to "Deutsche Bank National Trust
Company, as trustee under the Pooling and Servicing Agreement dated as of July
1, 2002, Xxxxxx Xxxxxxx ABS Capital I Inc. Trust 2002-HE2." In the event that
any such assignment is lost or returned unrecorded because of a defect therein,
the Unaffiliated Seller shall cause the related Originator to promptly prepare a
substitute assignment to cure such defect and thereafter cause each such
assignment to be duly recorded. In the event the Unaffiliated Seller does not
pay or otherwise reimburse the Servicer for any of the foregoing costs of
recording any such Assignment of Mortgage, the Servicer shall be entitled to be
reimbursed from the Trust Fund from amounts on deposit in the Collection
Account. In the event the related Originator fails to reimburse the Unaffiliated
Seller for the recording costs described above, upon receipt of written
direction from the Unaffiliated Seller, the Trustee shall assign its rights
under the applicable Mortgage Loan Purchase Agreement solely with respect to
payment of such expenses to the Unaffiliated Seller.
On or prior to the Closing Date, the Unaffiliated Seller shall
deliver to the Trustee a copy of the Data Tape Information in electronic,
machine readable medium in a form mutually acceptable to the Trustee. Within ten
days of the Closing Date, the Unaffiliated Seller shall deliver a copy of the
complete Mortgage Loan Schedule to the Trustee.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Trustee within 90 days following the related Delivery Date, and in the
event that the Originator does not cure such failure within 30 days of discovery
or receipt of written notification of such failure from the Depositor, the
Trustee or the Class A Certificate Insurer, the Trustee shall notify the related
Originator to repurchase the Mortgage Loan pursuant to the related Mortgage Loan
Purchase Agreement, upon the request of the Depositor, the Trustee or the Class
A Certificate Insurer, at the Repurchase Price and in the manner specified in
Section 2.03. The foregoing repurchase provision shall not apply in the event
that the related Originator cannot deliver such original or copy of any document
submitted for recordation to the appropriate public recording office within the
specified period due to a delay caused by the recording office in the applicable
jurisdiction; PROVIDED that the related Originator shall instead be required to
deliver a recording receipt of such recording office or, if such recording
receipt is not available, an officer's certificate of a servicing officer of the
Originator confirming that such document has been accepted for recording.
(c) PURCHASE AND SALE OF SUBSEQUENT MORTGAGE LOANS.
(i) Subject to the satisfaction of the conditions set forth in
paragraph (ii) below, and upon the Trustee's receipt of a Subsequent
Transfer Agreement executed by all other parties thereto, in consideration
of the Trustee's delivery on the related Subsequent Transfer Dates to or
upon the order of the Depositor of all or a portion of the balance of
funds in the Pre-Funding Account, the Depositor shall on any Subsequent
Transfer Date sell, transfer, assign, set over and convey to the Trustee
without recourse but subject to terms and provisions of this Agreement,
all of the right, title and interest of the Depositor in and to the
Subsequent Mortgage Loans, including the outstanding
49
principal of and interest due on such Subsequent Mortgage Loans, and all
other related assets included or to be included in the Trust Fund with
respect thereto.
The amount released from the Pre-Funding Account with respect to a
transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%) of the
aggregate Stated Principal Balances as of the related Subsequent Cut-off Date of
the Subsequent Mortgage Loans so transferred.
(ii) The Subsequent Mortgage Loans and the other property and
rights related thereto described in paragraph (a) above shall be
transferred by the Depositor to the Trust Fund only upon the satisfaction
of each of the following conditions on or prior to the related Subsequent
Transfer Date:
(a) the Unaffiliated Seller shall have provided the
Depositor, the Trustee, the Rating Agencies and the Class A
Certificate Insurer with a timely Addition Notice, which shall
include a Mortgage Loan Schedule, listing the Subsequent Mortgage
Loans and shall have provided any other information reasonably
requested by any of the foregoing with respect to the Subsequent
Mortgage Loans;
(b) the Servicer shall have deposited in the Collection
Account all collections of (x) principal in respect of the
Subsequent Mortgage Loans received and due after the related
Subsequent Cut-off Date and (y) interest due on the Subsequent
Mortgage Loans after the related Subsequent Cut-off Date;
(c) as of each Subsequent Transfer Date, the Unaffiliated
Seller was not insolvent nor will be made insolvent by such transfer
nor is the Unaffiliated Seller aware of any pending insolvency;
(d) such addition will not result in a "prohibited
transaction" (as defined in the REMIC Provisions) for any REMIC held
by the Trust Fund, and will not cause any REMIC held by the Trust
Fund to cease to qualify as a REMIC, as evidenced by an Opinion of
Counsel with respect to such matters (which may be a blanket opinion
dated the Closing Date);
(e) the Pre-Funding Period shall not have terminated;
(f) the Unaffiliated Seller shall have delivered to the
Trustee an executed Assignment and Recognition Agreement with
respect to each related Originator of Subsequent Mortgage Loans to
be added to the Trust Fund on such Subsequent Transfer Date;
(g) the Unaffiliated Seller shall have delivered to the
Trustee an Officer's Certificate confirming the satisfaction of each
condition precedent specified in this paragraph (ii), and the
Opinion of Counsel referenced in clause (d); and
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(h) the Unaffiliated Seller and the Depositor shall have
delivered to the Trustee an executed copy of a Subsequent Transfer
Agreement, substantially in the form of Exhibit L hereto.
(iii) The obligation of the Trust Fund to purchase the Subsequent
Mortgage Loans on a Subsequent Transfer Date is subject to the
requirements that, following the purchase of such Subsequent Mortgage
Loans, and with respect to the entire mortgage loan pool:
(a) no more than 2.50% may be second liens;
(b) no more than 25.00% may be Fixed Rate Mortgage Loans;
(c) the weighted average original term to maturity may not
exceed 360 months;
(d) the weighted average gross Mortgage Rate must not be
less than 8.75%, or more than 9.25%;
(e) the weighted average LTV must not exceed 81%, and no
more than 48.00% of the Mortgage Loans may have LTVs in excess of
80%;
(f) no Mortgage Loan may have a Stated Principal Balance in
excess of $1,000,000 as of the related Cut-off Date;
(g) at least 90.00% of the Mortgage Loans must have
prepayment penalties;
(h) the weighted average Gross Margin for the Adjustable
Rate Mortgage Loans must be at least 6.20%; and
(i) the weighted average credit score (FICO score) must be
at least 605, and not more than 2.00% of the Mortgage Loans may have
credit scores below 500.
Any of the above requirements may be waived or modified in any
respect by the Class A Certificate Insurer.
(iv) In connection with the transfer and assignment of the
Subsequent Mortgage Loans, the Unaffiliated Seller shall satisfy the
document delivery requirements set forth in Section 2.01(b).
Section 2.02 ACCEPTANCE BY THE TRUSTEE OF THE MORTGAGE LOANS.
The Trustee shall acknowledge, on each Delivery Date, receipt of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit F, and declares that it holds and will hold such documents and the other
documents delivered to it pursuant to Section 2.01, and that it holds or will
hold such other assets as are included in the Trust Fund, in trust for
51
the exclusive use and benefit of all present and future Certificateholders and
the Class A Certificate Insurer. The Trustee acknowledges that it will maintain
possession of the related Mortgage Notes in the State of California, unless
otherwise permitted by the Rating Agencies and the Class A Certificate Insurer.
In connection with each Delivery, the Trustee shall deliver via
facsimile (with original to follow the next Business Day) to the Depositor, the
Unaffiliated Seller and the Class A Certificate Insurer an Initial Certification
on or prior to the related Delivery Date, certifying receipt of the related
Mortgage Notes and Assignments of Mortgage for each related Mortgage Loan. The
Trustee shall not be responsible to verify the validity, sufficiency or
genuineness of any document in any Custodial File.
Within 120 days after the related Delivery Date, the Trustee shall
ascertain that all documents required to be delivered to it are in its
possession, and shall deliver to the Depositor, the Unaffiliated Seller and the
Class A Certificate Insurer a Final Certification to the effect that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in such certification
as an exception and not covered by such certification): (i) all documents
required to be delivered to it are in its possession; (ii) such documents have
been reviewed by it and appear regular on their face and relate to such Mortgage
Loan; (iii) based on its examination and only as to the foregoing documents, the
information set forth in items (1), (2) and (18) of the Mortgage Loan Schedule
and items (1), (9) and (17) of the Data Tape Information respecting such
Mortgage Loan is correct; and (iv) each Mortgage Note has been endorsed as
provided in Section 2.01 of this Agreement. The Trustee shall not be responsible
to verify the validity, sufficiency or genuineness of any document in any
Custodial File. Upon receipt of such Final Certification, if the Depositor, the
Unaffiliated Seller or the Class A Certificate Insurer determines that any
noncompliance identified by the Trustee is a breach of a representation or
warranty relating to such Mortgage Loan , such party shall give written notice
to the Trustee thereof.
The Trustee shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
UNAFFILIATED SELLER AND THE SERVICER.
(a) The Servicer hereby makes the representations and warranties set
forth in Schedule II hereto to the Depositor and the Trustee, as of the
Closing Date.
(b) CDC Mortgage Capital Inc., in its capacity as the Unaffiliated
Seller, hereby makes the representations and warranties set forth in
Schedule III hereto, as of the Closing Date.
(c) It is understood and agreed by the Servicer and the Unaffiliated
Seller that the representations and warranties set forth in Section 2.03
shall survive the transfer of the
52
Mortgage Loans to the Trust Fund, and shall inure to the benefit of the
Trust Fund notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or Assignment of Mortgage or the examination or failure to
examine any Mortgage File. Upon discovery by any of the Depositor, the
Unaffiliated Seller, the Class A Certificate Insurer, the Trustee or the
Servicer of a breach by the Unaffiliated Seller of any of the foregoing
representations or any of the representations and warranties made pursuant
to Sections 3.01(f) and (h) of the Unaffiliated Seller's Agreement or by
any Originator of the representations and warranties made pursuant to the
related Assignment and Recognition Agreement, the party discovering such
breach shall give prompt written notice to the others.
(d) Within 90 days of the earlier of either discovery by or notice
to the Unaffiliated Seller of any breach of a representation or warranty
set forth in Section 3.01(f) or (h) of the Unaffiliated Seller's Agreement
that materially and adversely affects the value of the Mortgage Loans or
the interest of the Trustee, the Class A Certificate Insurer or the
Certificateholders therein, the Unaffiliated Seller shall use its best
efforts to cure such breach in all material respects and, if such breach
cannot be remedied, the Unaffiliated Seller shall, (i) if such 90 day
period expires prior to the second anniversary of the related Delivery
Date, remove such Mortgage Loan from the Trust Fund and substitute in its
place a Substitute Mortgage Loan, in the manner and subject to the
conditions set forth in this Section 2,03; or (ii) repurchase such
Mortgage Loan at the Repurchase Price; PROVIDED, HOWEVER, that any such
substitution pursuant to (i) above shall not be effected prior to the
delivery to the Trustee of the Opinion of Counsel required by Section
2.05, if any, and a Request for Release substantially in the form of
Exhibit K, and the Mortgage File for any such Substitute Mortgage Loan
With respect to any Substitute Mortgage Loan or Loans, the
Unaffiliated Seller shall deliver to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related Assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No substitution is permitted to be made in any calendar month
after the Determination Date for such month. Scheduled Payments due with respect
to Substitute Mortgage Loans in the Due Period of substitution shall not be part
of the Trust Fund and will be retained by the related Originator on the next
succeeding Distribution Date. For the Due Period of substitution, distributions
to Certificateholders will include the monthly payment due on any Deleted
Mortgage Loan for such Due Period and thereafter the related Originator shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan.
For any month in which the Unaffiliated Seller substitutes one or
more Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (after application of the scheduled principal portion of the monthly
payments due in the Due Period of substitution). The Unaffiliated Seller shall
deposit the amount of such shortage (the "SUBSTITUTION ADJUSTMENT AMOUNT") plus,
an amount equal to the aggregate of any unreimbursed Advances and accrued and
unpaid Servicing Fees with respect to such Deleted Mortgage Loans into the
Collection Account on or before the Remittance Date for the Distribution Date in
the month succeeding the calendar month during which the related Mortgage Loan
became required to be purchased or replaced hereunder.
53
(e) Upon discovery that any document does not comply with the
requirements set forth in clauses (i) through (iv) of the Trustee's review
of the Custodial Files pursuant to Section 2.02 or receipt of written
notice of a breach of a representation and warranty or written notice that
a Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, the Trustee shall in turn
promptly notify the applicable Originator (with a copy to the Servicer,
the Class A Certificate Insurer and the Unaffiliated Seller) in writing of
such non compliance or breach and request that the related Originator cure
such non compliance or breach within the time period set forth in the
applicable Mortgage Loan Purchase Agreement (but in any event, within 60
days from the date the related Originator is notified of such non
compliance or breach) and if the related Originator does not cure such non
compliance or breach in all material respects during such period, the
Trustee shall notify such Originator to repurchase such Mortgage Loan from
the Trust Fund at the Repurchase Price, and such repurchase must occur no
later than the 90th day following the Trustee's original notice of such
noncompliance or breach if such noncompliance or breach is a failure of
the Mortgage Loan to constitute a "qualified mortgage" within the meaning
of Section 860G(a)(3) of the Code.
(f) Upon delivery of the Final Certification with respect to each
Mortgage Loan, the Trustee will notify the related Originator within 5
Business Days of such delivery of any missing documents from the Custodial
File and if the related Originator does not deliver such missing documents
within 60 days from the date the related Originator is notified of such
noncompliance or breach, the Trustee shall notify such Originator to
repurchase such Mortgage Loan from the Trust Fund at the Repurchase Price.
(g) Based solely on information received with respect to any
Substitute Mortgage Loan from the Unaffiliated Seller or the related
Originator, as applicable, the Servicer shall amend the Mortgage Loan
Schedule to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Substitute Mortgage Loan or Loans and the Servicer
shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, the Substitute Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the Unaffiliated Seller
shall be deemed to have made with respect to such Substitute Mortgage Loan
or Loans, as of the date of substitution, the representations and
warranties made pursuant to Sections 3.01(f) and (h) of the Unaffiliated
Seller's Agreement with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Collection Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph, the Trustee shall release the
Mortgage File relating to such Deleted Mortgage Loan to the Unaffiliated
Seller or the related Originator, as applicable, and shall execute and
deliver at the Unaffiliated Seller's or related Originator's direction, as
applicable, such instruments of transfer or assignment prepared by such
party, in each case without recourse, as shall be necessary to vest title
in the Unaffiliated Seller or the related Originator, or its designee, as
applicable, the Trustee's interest in any Deleted Mortgage Loan
substituted for pursuant to this Section 2.03.
(h) In the event that the Unaffiliated Seller or the related
Originator, as applicable, shall have repurchased a Mortgage Loan, the
Repurchase Price therefor shall be deposited in the Collection Account
pursuant to Section 3.10 on or before the Remittance Date for the
Distribution Date in the month following the month during which the
Unaffiliated Seller or the related Originator, as applicable, became
obligated hereunder to repurchase or replace
54
such Mortgage Loan and upon such deposit of the Repurchase Price, the
delivery of the Opinion of Counsel required by Section 2.05 and receipt of
a Request for Release in the form of Exhibit K hereto, the Trustee shall
release the related Custodial File to such Person as directed by the
Servicer, and the Trustee shall execute and deliver at such Person's
direction such instruments of transfer or assignment prepared by such
Person, in each case without recourse, as shall be necessary to transfer
title from the Trustee. It is understood and agreed that the obligation
under this Agreement of any Person to cure, repurchase or replace any
Mortgage Loan as to which a breach has occurred and is continuing shall
constitute the sole remedy against such Persons respecting such breach
available to Certificateholders, the Depositor, the Unaffiliated Seller,
the Class A Certificate Insurer or the Trustee on their behalf. In the
event such required repurchase or replacement does not occur, the Trustee
shall take such actions as directed upon written direction from the
Depositor or the Class A Certificate Insurer and the provision of
reasonable indemnity satisfactory to the Trustee in accordance with
Sections 6.03 and 8.02.
(i) If the Unaffiliated Seller is required to repurchase or
replace a Mortgage Loan pursuant to the terms hereof, upon receipt by the
Trustee of written direction from the Unaffiliated Seller and either the
related Repurchase Price or Substitute Mortgage Loan, as applicable, the
Trustee shall assign to the Unaffiliated Seller its rights under the
related Mortgage Loan Purchase Agreement solely with respect to such
Mortgage Loan by an assignment in form and substance mutually satisfactory
to the Unaffiliated Seller and the Trustee.
(j) The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the respective Custodial Files to
the Trustee.
Section 2.04 THE DEPOSITOR AND THE MORTGAGE LOANS.
The Depositor hereby represents and warrants to the Trustee and to
the Class A Certificate Insurer with respect to each Mortgage Loan as of the
date hereof or such other date set forth herein that as of the related Delivery
Date, and following the transfer of the Mortgage Loans to it by the Unaffiliated
Seller, the Depositor had good title to the Mortgage Loans and the Mortgage
Notes were subject to no offsets, defenses or counterclaims.
The Depositor hereby assigns, transfers and conveys to the Trustee
all of its rights with respect to the Initial Mortgage Loans and shall, on each
subsequent Transfer Date, convey all of its right, title and interest with
respect to the related subsequent Mortgage Loans.
Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
SUBSTITUTIONS AND NON-QUALIFIED MORTGAGES.
Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.03 shall be made more than 30 days after the
related Delivery Date unless the Unaffiliated Seller delivers, or causes the
related Originator to deliver, as applicable, to the Trustee an Opinion of
Counsel, at the expense of the Unaffiliated Seller or the related Originator, as
applicable, addressed to the Trustee, to the effect that such substitution will
not (i) result in the imposition of the tax on "prohibited transactions" on the
Trust Fund or contributions after the Startup Date, as defined in Sections
860F(a)(2) and 860G(d) of the Code, respectively or (ii)
55
cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Section 2.06 EXECUTION AND DELIVERY OF CERTIFICATES.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates, and for the benefit of the Class A Certificate Insurer.
Section 2.07 REMIC MATTERS.
The Preliminary Statement sets forth the designations for federal
income tax purposes of all interests created hereby. The "Startup Day" for
purposes of the REMIC Provisions shall be the Closing Date. The "latest possible
maturity date" is January 25, 2033, which is the sixth Distribution Date
following the latest Mortgage Loan maturity date.
Section 2.08 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents, warrants and covenants to the
Trustee, the Servicer and to the Class A Certificate Insurer and the that as of
the date of this Agreement or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
56
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's reasonable
judgment, might materially and adversely affect the performance by the Depositor
of its obligations under this Agreement, or the validity or enforceability of
this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee, the Depositor had, or, with respect to the subsequent
Mortgage Loans, will have, good title to, and was, or will be, the sole owner of
each Mortgage Loan, free of any interest of any other Person, and the Depositor
has transferred, or shall transfer, all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders and
for the benefit of the Class A Certificate Insurer, all right, title, and
interest of the Depositor thereto as note holder and mortgagee or (ii) to grant
to the Trustee, for the benefit of the Certificateholders and for the benefit of
the Class A Certificate Insurer, the security interest referred to in Section
10.04 hereof.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.08 shall survive delivery of the
respective Custodial Files to the Trustee or to a custodian, as the case may be,
and shall inure to the benefit of the Trustee.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 SERVICER TO SERVICE MORTGAGE LOANS.
(a) For and on behalf of the Certificateholders and for the
benefit of the Class A Certificate Insurer, the Servicer shall service and
administer the Mortgage Loans in accordance with the terms of this Agreement and
the respective Mortgage Loans and, to the extent consistent with such terms, in
the same manner in which it services and administers similar mortgage loans for
its own portfolio, giving due consideration to customary and usual standards of
practice of mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Subservicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute and deliver
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. The Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Servicer shall also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.15, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and any Subservicer
such documents as are necessary or appropriate to enable the Servicer or any
Subservicer to carry out
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their servicing and administrative duties hereunder, and the Trustee hereby
grants to the Servicer, and this Agreement shall constitute, a power of attorney
to carry out such duties including a power of attorney to take title to
Mortgaged Properties after foreclosure on behalf of the Trustee. The Trustee
shall execute a separate power of attorney in favor of the Servicer for the
purposes described herein to the extent necessary or desirable to enable the
Servicer to perform its duties hereunder. The Trustee shall not be liable for
the actions of the Servicer or any Subservicers under such powers of attorney.
(b) Subject to Section 3.09(b) hereof, in accordance with the
standards of the preceding paragraph, the Servicer shall advance or cause to be
advanced funds as necessary for the purpose of effecting the timely payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09(b), and further as provided in
Section 3.11. Any cost incurred by the Servicer or by Subservicers in effecting
the timely payment of taxes and assessments on a Mortgaged Property shall not be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the principal balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan or (ii) permit any modification, waiver or amendment of any term
of any Mortgage Loan that would both (A) effect an exchange or reissuance of
such Mortgage Loan under Section 1001 of the Code (or final, temporary or
proposed Treasury regulations promulgated thereunder) and (B) cause any REMIC to
fail to qualify as a REMIC under the Code or the imposition of any tax on
"prohibited transactions" or "contributions after the startup date" under the
REMIC Provisions, or (iii) except as provided in Section 3.07(a), waive any
Prepayment Charges.
(d) The Servicer may delegate its responsibilities under this
Agreement; PROVIDED, HOWEVER, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
Section 3.02 SUBSERVICING AGREEMENTS BETWEEN THE SERVICER AND
SUBSERVICERS.
(a) Subject to the consent of the Class A Certificate Insurer (so
long as no Class A Certificate Insurer Default has occurred and is continuing),
which consent shall not be unreasonably withheld, the Servicer may enter into
Subservicing Agreements with Subservicers, for the servicing and administration
of the Mortgage Loans.
Each Subservicer shall be (i) authorized to transact business in the
state or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the
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FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage servicer. Each
Subservicing Agreement must impose on the Subservicer requirements conforming to
the provisions set forth in Section 3.08 and provide for servicing of the
Mortgage Loans consistent with the terms of this Agreement. The Servicer will
examine each Subservicing Agreement and will be familiar with the terms thereof.
The terms of any Subservicing Agreement will not be inconsistent with any of the
provisions of this Agreement. The Servicer and the Subservicers may enter into
and make amendments to the Subservicing Agreements or enter into different forms
of Subservicing Agreements; PROVIDED, HOWEVER, that any such amendments or
different forms shall be consistent with and not violate the provisions of this
Agreement, and that no such amendment or different form shall be made or entered
into which could be reasonably expected to be materially adverse to the
interests of the Trustee, without the consent of the Trustee. Any variation
without the consent of the Trustee from the provisions set forth in Section 3.08
relating to insurance or priority requirements of Subservicing Accounts, or
credits and charges to the Subservicing Accounts or the timing and amount of
remittances by the Subservicers to the Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The Servicer shall
deliver to the Trustee, the Unaffiliated Seller, the Class A Certificate Insurer
and the Depositor copies of all Subservicing Agreements, and any amendments or
modifications thereof, promptly upon the Servicer's execution and delivery of
such instruments.
(b) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 3.03 SUCCESSOR SUBSERVICERS.
The Servicer shall be entitled to terminate any Subservicing
Agreement and the rights and obligations of any Subservicer pursuant to any
Subservicing Agreement in accordance with the terms and conditions of such
Subservicing Agreement. In the event of termination of any Subservicer, all
servicing obligations of such Subservicer shall be assumed simultaneously by the
Servicer without any act or deed on the part of such Subservicer or the
Servicer, and the Servicer either shall service directly the related Mortgage
Loans or shall enter into a Subservicing Agreement with a successor Subservicer
which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to an Event of Default).
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Section 3.04 LIABILITY OF THE SERVICER.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Servicer shall remain obligated and primarily liable to the Trustee for the
servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 3.01 without diminution of such obligation or liability by
virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Mortgage Loans. The Servicer shall be entitled to enter into any agreement
with a Subservicer for indemnification of the Servicer by such Subservicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05 NO CONTRACTUAL RELATIONSHIP BETWEEN SUBSERVICERS AND
THE TRUSTEE.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor Servicer) shall not be deemed
a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 ASSUMPTION OR TERMINATION OF SUBSERVICING AGREEMENTS BY
TRUSTEE.
In the event the Servicer at any time shall for any reason no longer
be the Servicer (including by reason of the occurrence of a Event of Default),
the Trustee or its designee shall thereupon assume all of the rights and
obligations of the Servicer under each Subservicing Agreement that the Servicer
may have entered into, with copies thereof provided to the Trustee prior to the
Trustee assuming such rights and obligations, unless the Trustee elects to
terminate any Subservicing Agreement in accordance with its terms as provided in
Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor Servicer shall be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Subservicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on
61
behalf of it, and otherwise use its best efforts to effect the orderly and
efficient transfer of the Subservicing Agreements to the assuming party.
Section 3.07 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS;
ESTABLISHMENT OF CERTAIN ACCOUNTS.
(a) The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Servicer may (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) extend the due dates for the Scheduled
Payments due on a Mortgage Note for a period of not greater than 180 days;
PROVIDED that any extension pursuant to clause (ii) above shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii) above, the Servicer shall make timely advances on such
Mortgage Loan during such extension pursuant to Section 4.01 and in accordance
with the amortization schedule of such Mortgage Loan without modification
thereof by reason of such arrangements, subject to Section 4.01(d) pursuant to
which the Servicer shall not be required to make any such advances that are
Nonrecoverable P&I Advances. Notwithstanding the foregoing, the Servicer may not
waive, in whole or in part, a Prepayment Charge, except under the following
circumstances: (i) such waiver relates to a default or a reasonably foreseeable
default and would, in the reasonable judgment of the Servicer, maximize recovery
of total proceeds taking into account the value of such Prepayment Charge and
the related Mortgage Loan, and doing so is standard and customary in servicing
mortgage loans similar to the Mortgage Loans (including any waiver of a
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is
related to a default or a reasonably foreseeable default), and in no event will
the Servicer waive a Prepayment Charge in connection with a refinancing of a
Mortgage Loan that is not related to a default or a reasonably foreseeable
default or (ii) such Prepayment Charge is not permitted to be collected by
applicable law. If a Prepayment Charge is waived other than as permitted by the
prior sentence, then the Servicer is required to pay the amount of such waived
Prepayment Charge, for the benefit of the Holders of the Class P Certificates,
by depositing such amount into the Collection Account together with and at the
time that the amount prepaid on the related Mortgage Loan is required to be
deposited into the Collection Account.
(b) (i) The Trustee shall establish and maintain the Excess
Reserve Fund Account, on behalf of the Class X Certificateholders, to
secure their limited recourse obligation to pay to the Floating Rate
Certificateholders Basis Risk CarryForward Amounts.
(ii) On each Distribution Date, the Trustee shall deposit the
amount of any Basis Risk Payment and any Interest Rate Cap Payment for
such date into the Excess Reserve Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis
Risk CarryForward Amount on any Class of Certificates, the Trustee shall
(1) withdraw from
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the Distribution Account and deposit in the Excess Reserve Fund Account,
as set forth in Section 4.02(a)(iii)(f), the lesser of (a) the sum of (x)
the Class X Distributable Amount (without regard to the reduction in the
definition thereof with respect to the Basis Risk CarryForward Amount) (to
the extent remaining after the distributions specified in Sections
4.02(a)(iii)(a)-(e)) and (y) the Interest Rate Cap Payment, if any, with
respect to such Distribution Date, and (b) the Basis Risk CarryForward
Amount and (2) withdraw from the Excess Reserve Fund Account amounts
necessary to pay to such Class or Classes of Certificates the Basis Risk
CarryForward Amount. Such payments shall be allocated to those Classes on
a PRO RATA basis based upon the amount of Basis Risk CarryForward Amount
owed to each such Class and shall be paid in the priority set forth in
Section 4.02(a)(iii)(g) hereof.
(ii) The Trustee shall account for the Excess Reserve Fund Account
as an outside reserve fund within the meaning of Treasury regulation
1.860G-2(h) and not as an asset of any REMIC created pursuant to this
Agreement. The beneficial owner of the Excess Reserve Fund Account is the
Class X Certificateholder. For all federal tax purposes, amounts
transferred by the Upper Tier REMIC to the Excess Reserve Fund Account
shall be treated as distributions by the Trustee to the Class X
Certificateholder.
(iii) Any Basis Risk CarryForward Amounts paid by the Trustee to the
Floating Rate Certificateholders shall be accounted for by the Trustee as
amounts paid first to the Holders of the Class X Certificate and then to
the respective Class or Classes of Floating Rate Certificates. In
addition, the Trustee shall account for the Floating Rate
Certificateholders' rights to receive payments of Basis Risk CarryForward
Amounts as rights in a limited recourse interest rate cap contract written
by the Class X Certificateholders in favor of the Floating Rate
Certificateholders.
(iv) Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess Reserve
Fund Account except as expressly set forth in this Section 3.07(c).
(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section 3.10
in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Trustee in writing to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error
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in the Distribution Account. All funds deposited in the Distribution Account
shall be held by the Trustee in trust for the Certificateholders until disbursed
in accordance with this Agreement or withdrawn in accordance with Section 4.02.
In no event shall the Trustee incur liability for withdrawals from the
Distribution Account at the direction of the Servicer.
(e) The Trustee shall establish and maintain the Capitalized
Interest Account, on behalf of the Certificateholders. On the Closing Date, the
Trustee shall deposit $177,692 to the Capitalized Interest Account from the
proceeds of the sale of the Offered Certificates. Withdrawals from the
Capitalized Interest Account shall be made in accordance with Sections 4.02(c)
and (d) hereof. The Trustee shall account for the Capitalized Interest Account
as an outside reserve fund within the meaning of Treasury Regulation 1.860G-2(h)
and not as an asset of any REMIC created pursuant to this Agreement. The
beneficial owner of the Capitalized Interest Account shall be the Unaffiliated
Seller.
(f) The Trustee shall establish and maintain the Pre-Funding
Account, on behalf of the Certificateholders. On the Closing Date, the Trustee
shall deposit the Initial Pre-Funded Amount to the Pre-Funding Account from the
proceeds of the sale of the Offered Certificates. Withdrawals from the
Pre-Funding Account shall be made in accordance with Sections 4.02(e) and (f)
hereof.
(g) The Trustee may invest the funds in the Accounts if directed
in writing by the Servicer, with respect to the Collection Account and the
Distribution Account or by the Unaffiliated Seller, with respect to the
Pre-Funding Account and the Capitalized Interest Account in each case, in
Permitted Investments, which directions shall be in accordance with Section
3.12. Amounts on deposit in the Excess Reserve Fund Account shall not be
invested.
(h) The Servicer shall give prior written notice to the Trustee,
each Rating Agency and the Depositor of any proposed change of the location of
the Collection Account.
Section 3.08 SUBSERVICING ACCOUNTS.
In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Subservicer will be required to
establish and maintain one or more accounts (collectively, the "SUBSERVICING
ACCOUNT"). The Subservicing Account shall be an Eligible Account and shall
otherwise be acceptable to the Servicer. The Subservicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Subservicer's receipt thereof, all proceeds
of Mortgage Loans received by the Subservicer less its servicing compensation to
the extent permitted by the Subservicing Agreement, and shall thereafter deposit
such amounts in the Subservicing Account, in no event more than two Business
Days after the deposit of such funds into the clearing account. The Subservicer
shall thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Subservicing Account.
For purposes of this Agreement, the Servicer shall be deemed to have received
payments on the Mortgage Loans when the Subservicer receives such payments.
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Section 3.09 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
ESCROW ACCOUNTS.
(a) The Servicer shall ensure that each of the Mortgage Loans
shall be covered by a paid-in-full, life-of-the-loan tax service contract with a
nationally recognized provider acceptable to the Servicer (each, a "TAX SERVICE
CONTRACT"). Each Tax Service Contract shall be assigned to the Trustee, or its
designee, at the Servicer's expense in the event that the Servicer is terminated
as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph
(b) are not otherwise provided pursuant to the Tax Service Contracts described
in paragraph (a) hereof, the Servicer undertakes to perform such functions. The
Servicer shall establish and maintain, or cause to be established and
maintained, one or more accounts (the "ESCROW ACCOUNTS"), which shall be
Eligible Accounts. The Servicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer's receipt thereof, all collections from the Mortgagors (or related
advances from Subservicers) for the payment of taxes, assessments, hazard
insurance premiums and comparable items for the account of the Mortgagors
("ESCROW PAYMENTS") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the Servicer (or a Subservicer to
the extent provided in the related Subservicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay interest, if required and as described below, to Mortgagors on balances in
the Escrow Account; (v) clear and terminate the Escrow Account at the
termination of the Servicer's obligations and responsibilities in respect of the
Mortgage Loans under this Agreement or (vi) recover amounts deposited in error.
As part of its servicing duties, the Servicer or Subservicers shall pay to the
Mortgagors interest on funds in Escrow Accounts, to the extent required by law
and, to the extent that interest earned on funds in the Escrow Accounts is
insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Servicer shall determine whether any such payments are made
by the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The Servicer
assumes full responsibility for the payment of all such bills within such time
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments; PROVIDED,
HOWEVER, that such advances are deemed to be Servicing Advances.
Section 3.10 COLLECTION ACCOUNT.
(a) On behalf of the Trustee, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more Eligible
Accounts (such account or
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accounts, the "COLLECTION ACCOUNT"), held in trust for the benefit of the
Trustee. On behalf of the Trustee, the Servicer shall deposit or cause to be
deposited in the clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Servicer's receipt thereof, and
shall thereafter deposit in the Collection Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the related Cut-off Date (other
than in respect of principal or interest on the related Mortgage Loans due on or
before the related Cut-off Date, and except for $88,740.18 in interest, which is
being retained by the Unaffiliated Seller), or payments (other than Principal
Prepayments) received by it on or prior to the related Cut-off Date but
allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds to the extent such Insurance Proceeds
are not to be applied to the restoration of the related Mortgaged Property
or released to the related Mortgagor in accordance with the express
requirements of law or in accordance with prudent and customary servicing
practices and Liquidation Proceeds;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant
to the second paragraph of Section 3.13(a) in respect of any blanket
policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Charges collected by the Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the
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Trustee and the Depositor of the location of the Collection Account maintained
by it when established and prior to any change thereof.
Section 3.11 WITHDRAWALS FROM THE COLLECTION ACCOUNT.
(a) The Servicer shall, from time to time, make withdrawals from
the Collection Account for any of the following purposes or as described
in Section 4.01:
(i) On or prior to the Remittance Date, to remit to the Trustee
the Interest Remittance Amount and the Principal Remittance Amount in
respect of the related Distribution Date together with all amounts
representing Prepayment Charges from the Mortgage Loans received during
the related Prepayment Period;
(ii) to reimburse the Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Monthly Payments on Mortgage Loans with respect
to which such P&I Advances were made in accordance with the provisions of
Section 4.01;
(iii) to pay the Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Late Collections,
Liquidation Proceeds, Insurance Proceeds or other amounts as may be
collected by the Servicer from a Mortgagor, or otherwise received with
respect to such Mortgage Loan (or the related REO Property);
(iv) to pay to the Servicer as servicing compensation (in addition
to the Servicing Fee) on the Remittance Date any interest or investment
income earned on funds deposited in the Collection Account;
(v) to pay to the Unaffiliated Seller or the related Originator,
as applicable, with respect to each Mortgage Loan that has previously been
purchased or replaced by the Unaffiliated Seller or such Originator, as
applicable, pursuant to this Agreement, all amounts received thereon
subsequent to the date of purchase or substitution, as the case may be;
(vi) to reimburse the Servicer for any P&I Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01;
(vii) to pay, or to reimburse the Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant to
Section 3.15;
(viii) to reimburse the Servicer, the Depositor or the Trustee for
expenses incurred by or reimbursable to the Servicer, the Depositor or the
Trustee, as the case may be, pursuant to Section 6.03;
(ix) to reimburse the Servicer, the Unaffiliated Seller, the
Depositor, the Class A Certificate Insurer or the Trustee, as the case may
be, for expenses reasonably incurred in respect of the breach or defect
giving rise to the purchase obligation under Section 2.03
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of this Agreement that were included in the Repurchase Price of the
Mortgage Loan, including any expenses arising out of the enforcement of
the purchase obligation to the extent not otherwise paid pursuant to the
terms hereof;
(x) to withdraw any amounts deposited in the Collection Account in
error; and
(xi) to clear and terminate the Collection Account upon termination
of this Agreement.
(b) The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix)
above. The Servicer shall provide written notification to the Trustee, on or
prior to the next succeeding Remittance Date, upon making any withdrawals from
the Collection Account pursuant to subclause (a)(vii) above.
Section 3.12 INVESTMENT OF FUNDS IN THE ACCOUNT.
(a) The Servicer may direct the Trustee to invest the funds in
the Collection Account and the Distribution Account, and the Unaffiliated Seller
may direct the Trustee to invest the funds in the Pre-Funding Account and the
Capitalized Interest Account (each of such Accounts, for purposes of this
Section 3.12, an "INVESTMENT ACCOUNT"), in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand
no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement.
All such Permitted Investments shall be held to maturity, unless payable on
demand. Any investment of funds in an Investment Account shall be made in the
name of the Trustee. The Trustee shall be entitled to sole possession (except
with respect to investment direction of funds held in the related Account and
any income and gain realized thereon) over each such investment, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the Trustee. In the
event amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Trustee may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on
such date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) (i) All income and gain realized from the investment of
funds deposited in the Collection Account and the Distribution Account
held by or on behalf of the Servicer, shall be for the benefit of the
Servicer and shall be subject to its withdrawal in the manner set forth in
Section 3.11 in the case of income in the Collection Account,
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and on each Distribution Date, the Trustee shall withdraw from the
Distribution Account, and remit to the Servicer all amounts in respect of
such income and gain in the Distribution Account. Whether in regard to the
Collection Account or the Distribution Account, the Servicer shall deposit
in the Collection Account or the Distribution Account, as applicable, the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization
of such loss.
(ii) All income and gain realized from the investment of funds
deposited in the Pre-Funding Account and the Capitalized Interest Account
held by or on behalf of the Unaffiliated Seller shall be retained in such
Investment Account, subject to withdrawal as provided in Section 4.02.
Whether in regard to the Pre-Funding Account or the Capitalized Interest
Account, the Unaffiliated Seller shall deposit in the Pre-Funding Account
or the Capitalized Interest Account, as applicable, the amount of any loss
of principal incurred in respect of any such Permitted Investment made
with funds in such accounts immediately upon realization of such loss.
(c) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee shall take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate proceedings. The Trustee shall not be liable for the
amount of any loss incurred in respect of any investment or lack of investment
of funds held in any Investment Account or the Distribution Account if made in
accordance with this Section 3.12.
Section 3.13 MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND
OMISSIONS AND FIDELITY COVERAGE.
(a) The Servicer shall cause to be maintained for each Mortgage
Loan fire insurance with extended coverage on the related Mortgaged Property in
an amount which is at least equal to the least of (i) the current principal
balance of such Mortgage Loan, (ii) the amount necessary to fully compensate for
any damage or loss to the improvements that are a part of such property on a
replacement cost basis and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Servicer shall also
cause to be maintained fire insurance with extended coverage on each REO
Property in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property, plus accrued interest at the Mortgage Rate and related
Servicing Advances. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11. Any cost
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incurred by the Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Trustee, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards and
flood insurance has been made available, the Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of A:X or better in Best's
(or such other rating that is comparable to such rating) insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of itself, the
Trustee claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall also maintain a fidelity bond
in the form and amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx
Mac, unless the Servicer has obtained a waiver of such requirements from Xxxxxx
Mae or Xxxxxxx Mac. The Servicer shall provide the Trustee with copies of any
such insurance policies and fidelity bond. The Servicer shall be deemed to have
complied with this provision if an Affiliate of the Servicer has such errors and
omissions and fidelity bond coverage and, by the terms of such insurance policy
or fidelity bond, the coverage afforded thereunder extends to the Servicer. Any
such errors and omissions policy and fidelity bond shall by its terms not be
cancelable without thirty days' prior written notice to the Trustee. The
Servicer shall also cause each Subservicer to maintain a policy of insurance
covering errors and omissions and a fidelity bond which would meet such
requirements.
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Section 3.14 ENFORCEMENT OF DUE-ON-SALE CLAUSES ASSUMPTION
AGREEMENTS.
The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; PROVIDED, HOWEVER, that the
Servicer shall not be required to take such action if, in its sole business
judgment, the Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note, PROVIDED that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Servicer, has a credit risk rating at
least equal to that of the original Mortgagor. In connection with any
assumption, modification or substitution, the Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Servicer shall not take or enter
into any assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Servicer in respect of an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including, but not limited to, the related Mortgage Rate and the
amount of the Scheduled Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Trustee
that any such substitution, modification or assumption agreement has been
completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
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Section 3.15 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
The Servicer shall use its best efforts, consistent with customary
servicing practices as described in Section 3.01, to foreclose upon or otherwise
comparably convert (which may include an acquisition of REO Property) the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.07, and which are not
released from this Agreement pursuant to any other provision hereof. The
Servicer shall use reasonable efforts to realize upon such defaulted Mortgage
Loans in such manner as will maximize the receipt of principal and interest by
the Trustee, taking into account, among other things, the timing of foreclosure
proceedings. The foregoing is subject to the provisions that, in any case in
which Mortgaged Property shall have suffered damage from an uninsured cause, the
Servicer shall not be required to expend its own funds toward the restoration of
such property unless it shall determine in its sole discretion (i) that such
restoration will increase the net proceeds of liquidation of the related
Mortgage Loan to the Trustee, after reimbursement to itself for such expenses,
and (ii) that such expenses will be recoverable by the Servicer through
Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property,
as contemplated in Section 3.11. The Servicer shall be responsible for all other
costs and expenses incurred by it in any such proceedings; PROVIDED, HOWEVER,
that it shall be entitled to reimbursement thereof from the related property, as
contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds or any income from an REO Property, will be applied in the
following order of priority: first, to reimburse the Servicer or any Subservicer
for any related unreimbursed Servicing Advances, pursuant to Section 3.11 or
3.17; second, to accrued and unpaid interest on the Mortgage Loan or REO Imputed
Interest, at the Mortgage Rate, to the date of the liquidation or REO
Disposition, or to the Due Date prior to the Remittance Date on which such
amounts are to be distributed if not in connection with a liquidation or REO
Disposition; third, to reimburse the Servicer for any related xxxxxxxxxxxx X&X
Advances, pursuant to Section 3.11; and fourth, as a recovery of principal of
the Mortgage Loan. If the amount of the recovery so allocated to interest is
less than a full recovery thereof, that amount will be allocated as follows:
first, to unpaid Servicing Fees; and second, as interest at the Mortgage Rate
(net of the Servicing Fee Rate). The portion of the recovery so allocated to
unpaid Servicing Fees shall be reimbursed to the Servicer or any Subservicer
pursuant to Section 3.11 or 3.17. The portions of the recovery so allocated to
interest at the Mortgage Rate (net of the Servicing Fee Rate) and to principal
of the Mortgage Loan shall be applied as follows: first, to reimburse the
Servicer or any Subservicer for any related unreimbursed Servicing Advances in
accordance with Section 3.11 or 3.17, and second, to the Trustee in accordance
with the provisions of Section 4.02, subject to the last paragraph of Section
3.17 with respect to certain excess recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a
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qualified inspector. Upon completion of the inspection, the Servicer shall
promptly provide the Trustee with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Servicer
shall determine how to proceed with respect to the Mortgaged Property. In the
event (a) the environmental inspection report indicates that the Mortgaged
Property is contaminated by hazardous or toxic substances or wastes and (b) the
Servicer determines to proceed with foreclosure or acceptance of a deed in lieu
of foreclosure, the Servicer shall be reimbursed for all reasonable costs
associated with such foreclosure or acceptance of a deed in lieu of foreclosure
and any related environmental clean-up costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Servicer, the Servicer shall be entitled to be reimbursed from
amounts in the Collection Account pursuant to Section 3.11 hereof. In the event
the Servicer determines not to proceed with foreclosure or acceptance of a deed
in lieu of foreclosure, the Servicer shall be reimbursed from general
collections for all Servicing Advances made with respect to the related
Mortgaged Property from the Collection Account pursuant to Section 3.11 hereof.
Section 3.16 RELEASE OF MORTGAGE FILES.
(a) Upon the payment in full of any Mortgage Loan, or the receipt
by the Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Servicer will, within five (5) Business
Days of the payment in full, notify the Trustee by a certification (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.10 have been or will
be so deposited) of a Servicing Officer and shall request delivery to it of the
Custodial File. Upon receipt of such certification and request, the Trustee
shall promptly release the related Custodial File to the Servicer within five
(5) Business Days. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon
request of the Servicer and delivery to the Trustee, of a Request for Release,
release the related Custodial File to the Servicer, and the Trustee shall, at
the direction of the Servicer, execute such documents as shall be necessary to
the prosecution of any such proceedings and the Servicer shall retain the
Mortgage File in trust for the benefit of the Trustee. Such Request for Release
shall obligate the Servicer to return each and every document previously
requested from the Custodial File to the Trustee when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account or the Mortgage File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Servicer has delivered to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan was liquidated and that all amounts received or to be received in
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connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release of Documents shall be
released by the Trustee to the Servicer or its designee.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer any court pleadings, requests for trustee's
sale or other documents reasonably necessary to the foreclosure or trustee's
sale in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity, or shall
exercise and deliver to the Servicer a power of attorney sufficient to authorize
the Servicer to execute such documents on its behalf. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
Section 3.17 TITLE, CONSERVATION AND DISPOSITION OF REO PROPERTY.
(a) This Section shall apply only to REO Properties acquired for
the account of the Trustee and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from the Trustee pursuant to
any provision hereof. In the event that title to any such REO Property is
acquired, the deed or certificate of sale shall be issued to the Servicer, or to
its nominee, on behalf of the Trustee.
(b) The Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Servicer deems to be in the best interest of the Trustee. The Servicer shall
notify the Trustee from time to time as to the status of each REO Property.
(c) The Servicer shall use its best efforts to dispose of the REO
Property as soon as possible (subject to the Trustee's right to veto any
proposed sale of REO Property) and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless the
Servicer determines, and gives an appropriate notice to the Trustee to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, the Servicer shall report
monthly to the Trustee as to the progress being made in selling such REO
Property. Notwithstanding its veto rights, the Trustee has no obligation with
respect to REO dispositions.
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(d) [Reserved].
(e) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
Collection Account.
(f) The Servicer shall deposit net of reimbursement to the
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11 hereof, or cause to be deposited, on a daily basis
in the Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(g) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(h) Any net proceeds which are in excess of the applicable Stated
Principal Balance plus all unpaid REO Imputed Interest thereon through the date
of the REO Disposition shall be retained by the Servicer as additional servicing
compensation.
(i) The Servicer shall use its reasonable best efforts to sell, or
cause the Subservicer to sell, any REO Property as soon as possible, but in no
event later than the conclusion of the third calendar year beginning after the
year of its acquisition by the REMIC unless (i) the Servicer applies for an
extension of such period from the Internal Revenue Service pursuant to the REMIC
Provisions and Code Section 856(e)(3), in which event such REO Property shall be
sold within the applicable extension period, or (ii) the Servicer obtains for
the Trustee an Opinion of Counsel, addressed to the Depositor, the Trustee and
the Servicer, to the effect that the holding by the REMIC of such REO Property
subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause the
REMIC to fail to qualify as a REMIC under the REMIC Provisions or comparable
provisions of relevant state laws at any time. The Servicer shall manage,
conserve, protect and operate each REO Property for the Trustee solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) or result in the receipt by the REMIC of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code or
any "net income from foreclosure property" which is subject to taxation under
Section 860G(a)(1) of the Code. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by the
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the Trustee
on behalf of the Certificateholders, rent the same, or any part thereof, as the
Servicer deems to be in the best interest of the Trustee on behalf of the
Certificateholders for the period prior to the sale of such REO Property;
PROVIDED, HOWEVER, that any rent received or accrued with respect to such REO
Property qualifies as "rents from real property" as defined in Section 856(d) of
the Code.
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Section 3.18 NOTIFICATION OF ADJUSTMENTS.
With respect to each Adjustable Rate Mortgage Loan, the Servicer
shall adjust the Mortgage Rate on the related Interest Rate Adjustment Date and
shall adjust the Scheduled Payment on the related mortgage payment adjustment
date, if applicable, in compliance with the requirements of applicable law and
the related Mortgage and Mortgage Note. The Servicer shall execute and deliver
any and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Rate and Scheduled
Payment adjustments. The Servicer shall promptly, upon written request therefor,
deliver to the Trustee such notifications and any additional applicable data
regarding such adjustments and the methods used to calculate and implement such
adjustments. Upon the discovery by the Servicer or the receipt of notice from
the Trustee that the Servicer has failed to adjust a Mortgage Rate or Scheduled
Payment in accordance with the terms of the related Mortgage Note, the Servicer
shall deposit in the Collection Account from its own funds the amount of any
interest loss caused as such interest loss occurs.
Section 3.19 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE MORTGAGE LOANS.
The Servicer shall provide, or cause the Subservicer to provide, to
the Depositor, the Unaffiliated Seller, the Class A Certificate Insurer, the
Trustee, the OTS or the FDIC and the examiners and supervisory agents thereof
access to the documentation regarding the Mortgage Loans in its possession. Such
access shall be afforded without charge, but only upon reasonable and prior
written request and during normal business hours at the offices of the Servicer
or any Subservicer. Nothing in this Section shall derogate from the obligation
of any such party to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of any such party to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
Section 3.20 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF THE
SERVICER TO BE HELD FOR THE TRUSTEE.
The Servicer shall account fully to the Trustee for any funds
received by the Servicer or which otherwise are collected by the Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan. All
Mortgage Files and funds collected or held by, or under the control of, the
Servicer in respect of any Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including but not
limited to, any funds on deposit in the Collection Account, shall be held by the
Servicer for and on behalf of the Trustee and shall be and remain the sole and
exclusive property of the Trustee, subject to the applicable provisions of this
Agreement. The Servicer also agrees that it shall not create, incur or subject
any Mortgage File or any funds that are deposited in any Account, or any funds
that otherwise are or may become due or payable to the Trustee for the benefit
of the Certificateholders, to any claim, lien, security interest, judgment,
levy, writ of attachment or other encumbrance, or assert by legal action or
otherwise any claim or right of setoff against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that the
Servicer shall be entitled to set off against and deduct from any such funds any
amounts that are properly due and payable to the Servicer under this Agreement.
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Section 3.21 SERVICING COMPENSATION.
(a) As compensation for its activities hereunder, the Servicer
shall, with respect to each Mortgage Loan, be entitled to retain from deposits
to the Collection Account and from Liquidation Proceeds, Insurance Proceeds and
REO Proceeds related to such Mortgage Loan, the Servicing Fee with respect to
each Mortgage Loan (less any portion of such amounts retained by any
Subservicer). In addition, the Servicer shall be entitled to recover unpaid
Servicing Fees out of related late collections to the extent permitted in
Section 3.11. The right to receive the Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement; PROVIDED, HOWEVER, that
the Servicer may pay from the Servicing Fee any amounts due to a Subservicer
pursuant to a Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account and the Distribution Account, as additional
servicing compensation, interest or other income earned on deposits therein.
(c) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor except as specifically provided in Section 3.11.
Section 3.22 ANNUAL STATEMENT AS TO COMPLIANCE.
The Servicer will deliver or cause to be delivered to the Depositor,
the Rating Agencies, the Unaffiliated Seller, the Class A Certificate Insurer,
and the Trustee on or before April 15 of each calendar year, commencing in 2003,
an Officers' Certificate stating, as to each signatory thereof, that (i) a
review of the activities of the Servicer during the preceding calendar year and
of performance under this Agreement or a similar agreement has been made under
such officers' supervision, and (ii) to the best of such officers' knowledge,
based on such review, the Servicer has fulfilled all of its obligations under
this Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof.
Section 3.23 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
STATEMENT; FINANCIAL STATEMENTS.
Not later than April 15th of each calendar year commencing in 2003,
the Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Depositor, the
Unaffiliated Seller, the Class A Certificate Insurer, the Rating Agencies and
the Trustee a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Servicer which includes an
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assertion that the Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by
Subservicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Subservicers.
Section 3.24 TRUSTEE TO ACT AS SERVICER.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of the
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of the Servicer pursuant to Section 3.10 or any acts or
omissions of the predecessor Servicer hereunder, (ii) obligated to make Advances
if it is prohibited from doing so by applicable law, (iii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including
but not limited to repurchases or substitutions pursuant to Section 2.03, (iv)
responsible for expenses of the Servicer pursuant to Section 2.03 or (v) deemed
to have made any representations and warranties of the Servicer hereunder). Any
such assumption shall be subject to Section 7.02.
Every subservicing agreement entered into by the Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any subservicing agreement in accordance with the terms
thereof; PROVIDED that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession.
The Servicer shall, upon request of the Trustee, but at the expense
of the Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement (if any) and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
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Section 3.25 COMPENSATING INTEREST.
The Servicer shall remit to the Trustee on each Remittance Date an
amount from its own funds equal to the lesser of (a) the Prepayment Interest
Shortfall, if any, for such Remittance Date, and (b) the amount of the Servicing
Fee payable to the Servicer for such Remittance Date.
Section 3.26 CREDIT REPORTING; XXXXX-XXXXX-XXXXXX ACT.
(a) The Servicer agrees to accurately and fully report its
borrower credit files with respect to the Mortgage Loans to all three credit
repositories in a timely manner.
(b) The Servicer shall comply with Title V of the
Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans and the related borrowers and shall
provide all required notices thereunder.
Section 3.27 ADVANCE FACILITIES.
With the prior written consent of the Class A Certificate Insurer,
the Servicer is hereby authorized to enter into a financing or other facility
(an "ADVANCE FACILITY") under which (l) the Servicer sells, assigns or pledges
to another Person (an "ADVANCING PERSON") the Servicer's rights under this
Agreement to be reimbursed for any Advances and/or (2) an Advancing Person
agrees to fund some or all P&I Advances or Servicing Advances required to be
made by the Servicer pursuant to this Agreement. Except as provided in the
preceding sentence, no consent of any party is required before the Servicer may
enter into an Advance Facility. Notwithstanding the existence of any Advance
Facility under which an Advancing Person agrees to fund P&I Advances and/or
Servicing Advances on the Servicer's behalf, the Servicer shall remain obligated
pursuant to this Agreement to make P&I Advances and Servicing Advances pursuant
to and as required by this Agreement, and shall not be relieved of such
obligations by virtue of such Advance Facility.
Reimbursement amounts ("ADVANCE REIMBURSEMENT AMOUNTS") shall
consist solely of amounts in respect of P&I Advances and/or Servicing Advances
made with respect to the Mortgage Loans for which the Servicer would be
permitted to reimburse itself in accordance with this Agreement, assuming the
Servicer had made the related P&I Advance(s) and/or Servicing Advance(s).
The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan-by-loan basis as to amounts advanced by, pledged
or assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the predecessor
Servicer, and the successor Servicer shall not be liable for any errors in such
information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a subservicer set forth in this Agreement.
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The documentation establishing any Advance Facility shall require
that Advance Reimbursement Amounts distributed with respect to each Mortgage
Loan be allocated to outstanding xxxxxxxxxxxx X&X Advances or Servicing Advances
(as the case may be) made with respect to that Mortgage Loan on a "first-in,
first out" (FIFO) basis. Such documentation shall also require the Servicer to
provide to the related Advancing Person or its designee loan-by-loan information
with respect to each Advance Reimbursement Amount distributed to such Advancing
Person or to a trustee or custodian (an "ADVANCE FACILITY TRUSTEE") on each
Distribution Date, to enable the Advancing Person or Advance Facility Trustee to
make the FIFO allocation of each Advance Reimbursement Amount with respect to
each Mortgage Loan. The Servicer shall remain entitled to be reimbursed pursuant
to the Advance Facility by the Advancing Person or Advance Facility Trustee for
all P&I Advances and Servicing Advances funded by the Servicer to the extent the
related rights to be reimbursed therefor have not been sold, assigned or pledged
to an Advancing Person.
Any amendment to this Section 3.27 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.27, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Trustee, the Depositor, the Unaffiliated Seller and the Servicer without the
consent of any Certificateholder, but with the consent of the Class A
Certificate Insurer, notwithstanding anything to the contrary in this Agreement.
Prior to entering into an Advance Facility, the Servicer shall notify the lender
under such facility in writing that: (a) the Advances financed by and/or pledged
to the lender are obligations owed to the Servicer on a non-recourse basis
payable only from the cash flows and proceeds received under this Agreement for
reimbursement of such Advances only to the extent provided herein, and the
Trustee is not otherwise obligated or liable to repay any Advances financed by
the lender; (b) the Servicer will be responsible for remitting to the lender the
applicable amounts collected by it as reimbursement for Advances funded by the
lender, subject to the restrictions and priorities created in this Agreement;
(c) the Trustee shall not have any responsibility to track or monitor the
administration of the financing arrangement between the Servicer and the lender;
(d) if the Servicer is replaced by a successor servicer, the lender shall
continue to be entitled to receive reimbursements as provided in clause (a)
above but shall have no further right to make advances with respect to the
transaction subject to this Agreement; and (e) (i) the pledge, if any, of
Servicer's rights to the lender under the facility conveys no rights (such as a
right to fees after the removal of the Servicer or the right to become a
substitute servicer) under this Agreement, or against the Trust Fund, any
investor in or guarantor of securities issued hereunder, or any person other
than the Servicer, (ii) the Servicer is only pledging assets and rights that it
owns and any purported pledge of any assets or rights that are not property of
the Servicer shall be of force and effect and will not be deemed to create any
additional rights or assets of either the lender or the Servicer and (iii) the
lender shall take such steps as are reasonably necessary to confirm to a
successor servicer that it has no rights in any collateral due or payable on or
after the date of servicing transfer other than the Servicer's rights to
reimbursement of Advances (to be repaid pursuant to the terms of this Agreement)
for Advances made prior to such servicing transfer.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 ADVANCES.
(a) The amount of P&I Advances to be made by the Servicer for any
Remittance Date shall equal, subject to Section 4.01(c), the sum of (i) with
respect to the Mortgage Loans, the aggregate amount of Scheduled Payments (with
each interest portion thereof net of the related Servicing Fee), due on the Due
Date immediately preceding such Remittance Date in respect of such Mortgage
Loans, which Scheduled Payments were not received as of the close of business on
the last Business Day of the immediately preceding calendar month, plus (ii)
with respect to each REO Property, which REO Property was acquired during or
prior to the related Prepayment Period and as to which such REO Property an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the Scheduled Payments (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date in respect of the related Mortgage Loans, over the net income
from such REO Property transferred to the Collection Account for distribution on
such Remittance Date.
(b) On the Remittance Date, the Servicer shall remit in
immediately available funds to the Trustee an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties for the related Remittance Date either (i) from its own funds,
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case, it will cause to be made an appropriate entry in
the records of Collection Account that Amounts Held For Future Distribution have
been, as permitted by this Section 4.01, used by the Servicer in discharge of
any such P&I Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of P&I Advances to be made by the Servicer with
respect to the Mortgage Loans and REO Properties. Any Amounts Held For Future
Distribution and so used shall be appropriately reflected in the Servicer's
records and replaced by the Servicer by deposit in the Collection Account on or
before any future Remittance Date to the extent required.
(c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from coverage under this Agreement, except as otherwise provided
in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by the
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Advance. The determination by the
Servicer that it has made a Nonrecoverable P&I Advance or a Nonrecoverable
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Advance or that any proposed P&I Advance or Servicing Advance, if made, would
constitute a Nonrecoverable P&I Advance or a Nonrecoverable Advance,
respectively, shall be evidenced by an Officers' Certificate of the Servicer
delivered to the Trustee.
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 hereof for Servicing Advances
from recoveries from the related Mortgagor or from all Liquidation Proceeds and
other payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the related Mortgage Loan.
Section 4.02 PRIORITIES OF DISTRIBUTION.
(a) On each Distribution Date, the Trustee will make the
disbursements and transfers from amounts then on deposit in the Distribution
Account in the following order of priority:
(i) (x) from the Interest Amount Available, to the Class A
Certificate Insurer, the Premium Amount and to the Trustee the Trustee
Fee, in each case for such Distribution Date; to the holders of each Class
of Certificates, in the following order of priority:
(y) from the remaining Interest Amount Available, plus in
the case of clause (a) below, the related portion of any Insured Payment,
(a) concurrently to the Class A Certificates and the Class
A-IO Certificates, the Accrued Certificate Interest Distribution
Amount for such Class and any Unpaid Interest Amounts for such Class
for such Distribution Date, as described in Section 4.02(a);
(b) to the Class A Certificate Insurer, the amount of any
Reimbursement Amount then owing to it on account of a prior drawing
relating to interest on the Class A Certificates;
(c) to the Class M-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(d) to the Class M-2 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(e) to the Class B-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(f) to the Class B-2 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(ii) (A) on each Distribution Date (1) before the Stepdown Date
or (2) with respect to which a Trigger Event is in effect, to the holders
of the related Class or Classes of Offered Certificates then entitled to
distributions of principal as set forth below, from the amounts remaining
on deposit in the Distribution Account after making distributions
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pursuant to clause (i) above, an amount equal to the Principal
Distribution Amount in the following order of priority:
(a) to the Class A Certificates, until the Class Certificate
Balance thereof is reduced to zero;
(b) to the Class A Certificate Insurer, the amount of any
Reimbursement Amount then owing to it on account of a prior drawing
relating to principal on the Class A Certificates; and
(c) sequentially to the Class M-1, Class M-2, Class B-1 and
Class B-2 Certificates, in that order, until the respective Class
Certificate Balances are reduced to zero;
(B) on each Distribution Date (1) on and after the Stepdown Date
and (2) as long as a Trigger Event is not in effect, to the holders of the
related Class or Classes of Offered Certificates then entitled to
distribution of principal, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i)
above, an amount equal to, in the aggregate, the Principal Distribution
Amount in the following amounts and order of priority:
(a) the lesser of (x) the Principal Distribution Amount and
(y) the Class A Principal Distribution Amount to the Class A
Certificates, until the Class Certificate Balance thereof is reduced
to zero;
(b) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above and (y) the amount of
any Reimbursement Amount then owing to the Class A Certificate
Insurer on account of a prior drawing relating to principal on the
Class A Certificates;
(c) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above and to the Class A
Certificate Insurer in clause (ii)(B)(b) above and (y) the Class M-1
Principal Distribution Amount to the Class M-1 Certificateholders,
until the Class Certificate Balance thereof has been reduced to
zero;
(d) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above and to the Class A
Certificate Insurer in clause (ii)(B)(b) above and to the Class M-1
Certificates in clause (ii)(B)(c) above and (y) the Class M-2
Principal Distribution Amount to the Class M-2 Certificateholders,
until the Class Certificate Balance thereof has been reduced to
zero;
(e) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the Class A
Certificate Insurer in clause (ii)(B)(b) above, to
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the Class M-1 Certificates in clause (ii)(B)(c) above and to the
Class M-2 Certificates in clause (ii)(B)(d) above and (y) the Class
B-1 Principal Distribution Amount to the Class B-1
Certificateholders, until the Class Certificate Balance thereof has
been reduced to zero;
(f) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the Class A
Certificate Insurer in clause (ii)(B)(b) above, to the Class M-1
Certificates in clause (ii)(B)(c) above, to the Class M-2
Certificates in clause (ii)(B)(d) above and to the Class B-1
Certificates in clause (ii)(B)(e) above and (y) the Class B-2
Principal Distribution Amount to the Class B-2 Certificateholders,
until the Class Certificate Balance thereof has been reduced to
zero;
(iii) any amount remaining in the Distribution Account after the
distributions in clauses (i) and (ii) above, plus as specifically
indicated below, from amounts on deposit in the Excess Reserve Fund
Account, shall be distributed in the following order of priority:
(a) to the Class A Certificate Insurer, to the extent of any
remaining Reimbursement Amount then owing to it;
(b) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amounts for such Class;
(c) to the holders of the Class M-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(d) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amounts for such Class;
(e) to the holders of the Class M-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(f) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amounts for such Class;
(g) to the holders of the Class B-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(h) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amounts for such Class;
(i) to the holders of the Class B-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(j) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
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(k) from amounts on deposit in the Excess Reserve Fund
Account, including any Interest Rate Cap Payment, an amount equal to
any Basis Risk CarryForward Amount with respect to any Floating Rate
Certificate for such Distribution Date to the Floating Rate
Certificates in the same order and priority in which Accrued
Certificate Interest Distribution Amount is allocated among those
Classes of Certificates; and
(l) to the holders of the Class P Certificates, the
outstanding principal balance thereof, if any, and to the holders of
the Class X Certificates, the remainder of the Class X Distributable
Amount not distributed pursuant to Sections 4.02(a)(iii)(a)-(k) (to
the extent stated in clause (i) of the definition of Class X
Distributable Amount, as interest, and to the extent stated in
clause (ii) of the definition of Class X Distributable Amount, as
principal); and
(iv) to the holders of the Class R Certificates, any remaining
amount.
(b) On each Distribution Date, all amounts representing Prepayment
Charges from the Mortgage Loans received during the related Prepayment Period
will be distributed to the holders of the Class P Certificates.
(c) On the August 2002, September 2002 and October 2002
Distribution Dates, the Trustee shall transfer from the Capitalized Interest
Account to the Distribution Account the Capitalized Interest Requirement, if
any, for such Distribution Date.
(d) On the Distribution Date following either the final Subsequent
Transfer Date or October 24, 2002 whichever date is earlier, any amounts
remaining in the Capitalized Interest Account and all Pre-Funding Earnings in
the Pre-Funding Account, after taking into account the transfers in respect of
the Distribution Date described in clause (c) above, shall be paid by the
Trustee to the Unaffiliated Seller.
(e) On each Subsequent Transfer Date, the Unaffiliated Seller
shall instruct in writing the Trustee to withdraw from the Pre-Funding Account
an amount equal to 100% of the aggregate Stated Principal Balances as of the
related Subsequent Cut-off Date of the Subsequent Mortgage Loans sold to the
Trust Fund on such Subsequent Transfer Date and pay such amount to or upon the
order of the Unaffiliated Seller upon satisfaction of the conditions set forth
in Section 2.01(c) hereof with respect to such transfer. The Trustee may
conclusively rely on such written instructions from the Unaffiliated Seller.
(f) If the Pre-Funding Amount (exclusive of Pre-Funding Earnings)
has been reduced to $100,000 or less by the close of business on September 1,
2002 then, on the September 25, 2002 Distribution Date, after giving effect to
any reductions in the Pre-Funding Amount on such date, the Trustee shall
withdraw from the Pre-Funding Account on such date and deposit in the
Distribution Account the amount on deposit in the Pre-Funding Account other than
any Pre-Funding Earnings; if the Pre-Funding Amount has not been reduced to zero
by the close of business on October 24, 2002, the Trustee shall withdraw from
the Pre-Funding Account the amount on deposit therein, other than the
Pre-Funding Earnings, and deposit such amount on the October 25, 2002
Distribution Date into the Distribution Account. Each amount so deposited
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to the Distribution Account pursuant to the preceding sentence shall be
distributed to the Holders of the Offered Certificates (other than the Class
A-IO Certificates), PRO RATA, based on their relative Class Certificate Balances
immediately prior to the related Distribution Date, as a separate payment of
principal, on the related Distribution Date.
(g) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date will be allocated as a
reduction in the following order:
(1) First, to the amount of interest payable to the Class X
Certificates; and
(2) Second, PRO RATA, as a reduction of the Accrued Certificate
Interest Distribution Amount for the Class A, Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates, based on the amount of interest to which
such classes would otherwise be entitled.
Section 4.03 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.
(a) Not later than each Distribution Date, the Trustee shall make
available to each Certificateholder, the Servicer, the Depositor, the
Unaffiliated Seller, the Class A Certificate Insurer and each Rating Agency a
statement setting forth with respect to the related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amounts included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution, any Basis Risk
CarryForward Amount for such Distribution Date and the amount of all Basis
Risk CarryForward Amount covered by withdrawals from the Excess Reserve
Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between principal and
interest, including any Basis Risk CarryForward Amount not covered by
amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such Distribution
Date;
(v) the Pool Stated Principal Balance for the following
Distribution Date;
(vi) the amount of the Servicing Fees paid to or retained by the
Servicer or Subservicer (with respect to the Subservicers, in the
aggregate) with respect to such Distribution Date;
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(vii) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(viii) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances reported by the
servicer as outstanding as of the close of business on such Distribution
Date;
(ix) the number and aggregate Scheduled Principal Balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(x) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and Stated
Principal Balance of such Mortgage Loan as of the close of business on the
Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xi) the total number and principal balance of any REO Properties
(and market value, if available) as of the close of business on the
Determination Date preceding such Distribution Date;
(xii) whether a Trigger Event has occurred and is continuing
(including the calculation of thereof and the aggregate outstanding
balance of all 60+ Day Delinquent Loans); (xiii) the amount on deposit in
the Excess Reserve Fund Account (after giving effect to distributions on
such Distribution Date);
(xiv) the aggregate amount of Applied Realized Loss Amounts
incurred during the preceding calendar month and aggregate Applied
Realized Loss Amounts through such Distribution Date;
(xv) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Losses and Unpaid Interest Amounts;
(xvi) the Subordinated Amount and Required Subordinated Amount;
(xvii) the Interest Remittance Amount, the Principal Remittance
Amount and the Prepayment Charges remitted by Servicer with respect to
that Distribution Date;
(xviii) the Pre-Funded Amount as of the end of the prior Due Period;
(xix) the amount of any principal prepayment on the Certificates
resulting from the application of unused Pre-Funding Account moneys;
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(xx) the Class A Deficiency Amount and the Insured Payment for
such Distribution Date;
(xxi) the Reimbursement Amount immediately prior to such
Distribution Date, and the amount of any payments to the Class A
Certificate Insurer on account thereof on such Distribution Date; and
(xxii) the Interest Rate Cap Payment, if any, for such Distribution
Date.
(b) The Trustee's responsibility for providing the above
statement is limited to the availability, timeliness and accuracy of the
information derived from the Servicer or, in the case of the Reimbursement
Amount, from the Class A Certificate Insurer. The Trustee will provide the above
statement via the Trustee's internet website, except that the Trustee shall
deliver a hard copy of such statement to the Class A Certificate Insurer on each
Distribution Date. The Trustee's website will initially be located at
xxxx://xxx-xxxx.xxx.xxxxxxxx-xxxx.xxx\invr and assistance in using the website
can be obtained by calling the Trustee's investor relations desk at
0-000-000-0000. A paper copy of the statement will also be made available upon
request.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this
Section 4.03 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
(d) Not later than the Determination Date, the Servicer shall
furnish to the Trustee a monthly remittance advice statement containing such
information as shall be reasonably requested by the Trustee to provide the
reports required by Section 4.03(a) as to the accompanying remittance and the
period ending on the close of business on the last Business Day of the
immediately preceding month.
The Servicer shall furnish to the Trustee an individual loan
accounting report, as of the last Business Day of each month, to document
Mortgage Loan payment activity on an individual Mortgage Loan basis. With
respect to each month, the corresponding individual loan accounting report (in
electronic format) shall be received by the Trustee no later than the related
Determination Date, which report shall contain the following:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
prepayment penalties or premiums, along with a detailed report of interest
on principal prepayment amounts remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest and assumption fees;
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(iii) the amount of servicing compensation received by the Servicer
during the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the individual and aggregate Scheduled Principal Balances of
the Mortgage Loans;
(vi) the aggregate of any expenses reimbursed to the Servicer
during the prior distribution period pursuant to Section 3.05; and
(vii) the number and aggregate Scheduled Principal Balances of
Mortgage Loans (a) as to which the Scheduled Payment is delinquent (1) 31
to 60 days, (2) 61 to 90 days and (3) 91 days or more; (b) as to which
foreclosure has commenced; (c) as to which REO Property has been acquired
and (d) that are in bankruptcy.
Section 4.04 CERTAIN MATTERS RELATING TO THE DETERMINATION OF LIBOR.
Until all of the LIBOR Certificates are paid in full, the Trustee
will at all times retain at least four Reference Banks for the purpose of
determining LIBOR with respect to each Interest Determination Date. The Servicer
initially shall designate the Reference Banks. Each "REFERENCE BANK" shall be a
leading bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Trustee and shall have an established place of business in
London. If any such Reference Bank should be unwilling or unable to act as such
or if the Servicer should terminate its appointment as Reference Bank, the
Servicer shall promptly appoint or cause to be appointed another Reference Bank.
The Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement. The Trustee shall not have any liability or
responsibility to any Person for its inability, following a good-faith
reasonable effort, to obtain quotations from the Reference Banks or to determine
the arithmetic mean referred to in the definition of LIBOR, all as provided for
in this Section 4.04 and the definition of LIBOR. The establishment of LIBOR and
each Pass-Through Rate for the LIBOR Certificates by the Trustee shall (in the
absence of manifest error) be final, conclusive and binding upon each Holder of
a Certificate and the Trustee.
Section 4.05 THE CLASS A INSURANCE POLICY.
(a) Within two (2) days following each Remittance Date, the
Trustee shall determine with respect to the immediately following Distribution
Date, the amount to be on
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deposit in the Distribution Account on such Distribution Date as a result of the
(i) Servicer's remittance of the Interest Remittance Amount and the Principal
Remittance Amount on the related Remittance Date, and (ii) any transfers to the
Distribution Account made from the Capitalized Interest Account and/or the
Pre-Funding Account relating to such Distribution Date pursuant to Section 4.02
hereof, excluding the amount of any Insured Payment.
(b) If on any Distribution Date there is a Class A Deficiency, the
Trustee shall complete a Notice in the form of Exhibit A to the Class A
Insurance Policy and submit such notice to the Class A Certificate Insurer no
later than 12:00 noon New York City time on the second Business Day preceding
such Distribution Date as a claim for an Insured Payment in an amount equal to
such Class A Deficiency.
(c) The Trustee shall establish a separate Eligible Account for
the benefit of Holders of the Class A Certificates and the Class A Certificate
Insurer referred to herein as the "Class A Insurance Payment Account" over which
the Trustee shall have exclusive control and sole right of withdrawal. The
Trustee shall deposit upon receipt any amount paid under the Class A Insurance
Policy in the Insurance Payment Account and distribute such amount only for
purposes of payment to the Class A Certificateholders of the Class A Insured
Amount and such amount may not be applied to satisfy any costs, expenses or
liabilities of the Servicer, the Trustee or the Trust Fund. Amounts paid under
the Class A Insurance Policy, to the extent needed to pay the Class A Insured
Amount shall be transferred to the Distribution Account on the related
Distribution Date and disbursed by the Class A Trustee to the Class A
Certificateholders in accordance with Section 4.02. It shall not be necessary
for such payments to be made by checks or wire transfers separate from the
checks or wire transfers used to pay other distributions to the Class A
Certificateholders with other funds available to make such payment. However, the
amount of any payment of principal or of interest on the Class A Certificates to
be paid from funds transferred from the Class A Insurance Payment Account shall
be noted as provided in paragraph (d) below in the Certificate Register and in
the statement to be furnished to Holders of the Class A Certificates pursuant to
Section 4.03(a). Funds held in the Class A Insurance Payment Account shall not
be invested. Any funds remaining in the Class A Insurance Payment Account on the
first Business Day following a Distribution Date shall be returned to the Class
A Certificate Insurer pursuant to the written instructions of the Class A
Certificate Insurer by the end of such Business Day.
(d) The Trustee shall keep a complete and accurate record of the
amount of interest and principal paid in respect of any Class A Certificate from
moneys received under the Class A Insurance Policy. The Class A Certificate
Insurer shall have the right to inspect such records at reasonable times during
normal business hours upon one Business Day's prior notice to the Trustee.
(e) In the event that the Trustee has received a certified copy of
an order of the appropriate court that any Insured Payment has been voided in
whole or in part as a preference payment under applicable bankruptcy law, the
Trustee shall so notify the Class A Certificate Insurer, shall comply with the
provisions of the Class A Insurance Policy to obtain payment by the Class A
Certificate Insurer of such voided Insured Payment, and shall, at the time it
provides notice to the Class A Certificate Insurer, notify, by mail to the Class
A Certificateholders of the affected Certificates that, in the event any Class A
Certificateholder's
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Insured Payment is so recovered, such Class A Certificateholder will be entitled
to payment pursuant to the Class A Insurance Policy, a copy of which shall be
made available through the Trustee, the Class A Certificate Insurer or the Class
A Certificate Insurer's fiscal agent, if any, and the Trustee shall furnish to
the Class A Certificate Insurer or its fiscal agent, if any, its records
evidencing the payments which have been made by the Trustee and subsequently
recovered from the Class A Certificateholders, and dates on which such payments
were made.
(f) The Trustee shall promptly notify the Class A Certificate
Insurer of any proceeding or the institution of any action, of which a
Responsible Officer of the Trustee has actual knowledge, seeking the avoidance
as a preferential transfer under applicable bankruptcy, insolvency, receivership
or similar law (a "PREFERENCE CLAIM") of any distribution made with respect to
the Class A Certificates. Each Class A Certificateholder, by its purchase of
Class A Certificates, the Servicer and the Trustee agree that, the Class A
Certificate Insurer (so long as no Class A Certificate Insurer Default exists)
may at any time during the continuation of any proceeding relating to a
Preference Claim direct all matters relating to such Preference Claim,
including, without limitation, (i) the direction of any appeal of any order
relating to such Preference Claim and (ii) the posting of any surety, supersedes
or performance bond pending any such appeal. In addition and without limitation
of the foregoing, the Class A Certificate Insurer shall be subrogated to, and
each Class A Certificateholder, the Trustee hereby delegates and assigns to the
Class A Certificate Insurer, to the fullest extent permitted by law, the rights
the Trustee and each Class A Certificateholder in the conduct of any such
Preference Claim, including, without limitation, all rights of any party to any
adversary proceeding or action with respect to any court order issued in
connection with any such Preference Claim.
(g) The Trustee shall, upon retirement of the Class A
Certificates, furnish to the Class A Certificate Insurer a notice of such
retirement, and, upon retirement of the Class A Certificates and the expiration
of the term of the Class A Insurance Policy, surrender the Class A Insurance
Policy to the Class A Certificate Insurer for cancellation.
Section 4.06 EFFECT OF PAYMENTS BY THE CLASS A CERTIFICATE INSURER;
SUBROGATION.
Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on the Class A Certificates which is made
with moneys received pursuant to the terms of the Class A Insurance Policy shall
not be considered payment of the Class A Certificates from the Trust Fund. The
Depositor, the Servicer and the Trustee acknowledge, and each Holder by its
acceptance of a Class A Certificate agrees, that without the need for any
further action on the part of the Class A Certificate Insurer, the Depositor,
the Servicer, the Trustee or the Certificate Registrar (a) to the extent the
Class A Certificate Insurer makes payments, directly or indirectly, on account
of principal of or interest on the Class A Certificates to the Holders of such
Class A Certificates, the Class A Certificate Insurer will be fully subrogated
to, and each Class A Certificateholder, the Servicer and the Trustee hereby
delegate and assign to the Class A Certificate Insurer, to the fullest extent
permitted by law, the rights of such Holders to receive such principal and
interest from the Trust Fund, including, without limitation, any amounts due to
the Class A Certificateholders in respect of securities law violations arising
from the offer and sale of the Class A Certificates, and (b) the Class A
Certificate Insurer shall be paid such amounts from the sources and in the
manner provided herein for the payment of such amounts and as provided in the
Insurance and Indemnity
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Agreement. The Trustee and the Servicer shall cooperate in all respects with any
reasonable request by the Class A Certificate Insurer for action to preserve or
enforce the Class A Certificate Insurer's rights or interests under this
Agreement without limiting the rights or affecting the interests of the Holders
as otherwise set forth herein.
ARTICLE V
THE CERTIFICATES
Section 5.01 THE CERTIFICATES.
The Certificates shall be substantially in the forms attached hereto
as exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class X and
the Class P Certificates initially to "Xxxxxx Xxxxxxx & Co. Incorporated" and
then on the NIM Closing Date as follows: "Deutsche Bank National Trust Company,
as Indenture Trustee on behalf of the Noteholders of the CDC Mortgage Capital
NIM Trust 2002-HE2N", and to deliver such Class X and Class P Certificates on
the NIM Closing Date to Deutsche Bank National Trust Company, as trustee of the
NIM Trust.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if such Holder has so
notified the Trustee at least five Business Days prior to the related Record
Date or (y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the countersignature and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless countersigned by the Trustee by manual signature, and
such countersignature upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
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Section 5.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND
EXCHANGE OF CERTIFICATES.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06, a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c) below
and to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. Upon surrender for registration of transfer of
any Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. Except
with respect to the transfer of the Class X and Class P Certificates to the NIMs
Trust on the Closing Date, in the event that a transfer is to be made in
reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer shall certify to the Trustee in writing the
facts surrounding the transfer in substantially the form set forth in Exhibit I
(the "TRANSFEROR CERTIFICATE") and either (i) there shall be delivered to the
Trustee a letter in substantially the form of Exhibit J (the "RULE 144A LETTER")
or (ii) there shall be delivered to the Trustee at the expense of the transferor
an Opinion of Counsel that such transfer may be made without registration under
the Securities Act. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Trustee and the Servicer
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shall cooperate with the Depositor in providing the Rule 144A information
referenced in the preceding sentence, including providing to the Depositor such
information regarding the Certificates, the Mortgage Loans and other matters
regarding the Trust Fund as the Depositor shall reasonably request to meet its
obligation under the preceding sentence. Each Holder of a Private Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor and the Servicer against any liability that may result
if the transfer is not so exempt or is not made in accordance with such federal
and state laws.
Except with respect to the transfer of the Class X and Class P
Certificates to the NIMs Trust on the Closing Date, no transfer of an
ERISA-Restricted Certificate shall be made unless the Trustee shall have
received either (i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Trustee (in the
event such Certificate is a Private Certificate or a Residual Certificate, such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit I), to the
effect that such transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA, a plan subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law ("SIMILAR LAW") materially
similar to the foregoing provisions of ERISA or the Code, nor a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, or (ii) if the ERISA-Restricted Certificate
is a Private Certificate other than a Residual Certificate or a Class P
Certificate that has been the subject of an ERISA-Qualifying Underwriting, and
the purchaser is an insurance company, a representation that the purchaser is an
insurance company that is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60 or (iii) in the case of any such ERISA-Restricted Certificate
other than a Residual Certificate or Class P Certificate presented for
registration in the name of an employee benefit plan subject to Title I of
ERISA, a plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a plan subject to Similar Law, or a
trustee of any such plan or any other person acting on behalf of any such plan
or arrangement or using such plan's or arrangement's assets, an Opinion of
Counsel satisfactory to the Trustee and the Servicer, which Opinion of Counsel
shall not be an expense of the Trustee, the Servicer or the Trust Fund,
addressed to the Trustee, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in the assets of the Trust Fund
being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code or similar violation of Similar Law and will
not subject the Trustee or the Servicer to any obligation in addition to those
expressly undertaken in this Agreement or to any liability. For purposes of the
preceding sentence, with respect to an ERISA-Restricted Certificate that is not
a Private Certificate or a Residual Certificate, in the event the representation
letter referred to in the preceding sentence is not furnished, such
representation shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquiror's) acceptance of the
ERISA-Restricted Certificates. In the event that such representation is
violated, or any attempt to transfer to a plan or arrangement subject to Section
406 of ERISA, a plan subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement or
using the assets of any such plan or arrangement, without such Opinion of
Counsel, such attempted transfer or acquisition shall be void and of no effect.
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To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "TRANSFER AFFIDAVIT") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit H.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact not a Permitted Transferee at the time it became a Holder or,
at such
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subsequent time as it became other than a Permitted Transferee, all
payments made on such Residual Certificate at and after either such time.
Any such payments so recovered by the Trustee shall be paid and delivered
by the Trustee to the last preceding Permitted Transferee of such
Certificate.
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information
necessary to compute any tax imposed under Section 860E(e) of the Code as
a result of a Transfer of an Ownership Interest in a Residual Certificate
to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the
Unaffiliated Seller or the Servicer, to the effect that the elimination of such
restrictions will not cause the Trust Fund hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate which is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
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All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, (y) the Depositor at its option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository or (z) after the occurrence of an Event of Default, Certificate
Owners representing at least 51% of the Certificate Balance of the Book-Entry
Certificates together advise the Trustee and the Depository through the
Depository Participants in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Certificate
Owners, the Trustee shall notify all Certificate Owners, through the Depository,
of the occurrence of any such event and of the availability of definitive,
fully-registered Certificates (the "DEFINITIVE Certificates") to Certificate
Owners requesting the same. Upon surrender to the Trustee of the related Class
of Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Servicer, the Depositor nor the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Depositor
shall provide the Trustee with an adequate inventory of certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; PROVIDED, that the
Trustee shall not by virtue of its assumption of such obligations become liable
to any party for any act or failure to act of the Depository.
Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Depositor, the
Servicer, the Class A Certificate Insurer and the Trustee such security or
indemnity as may be required by them to hold each of them harmless, then, in the
absence of notice to the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Trustee shall execute, countersign and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 5.03, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any replacement Certificate issued pursuant to this Section 5.03 shall
constitute complete and indefeasible evidence of ownership, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
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Section 5.04 PERSONS DEEMED OWNERS.
The Servicer, the Trustee, the Depositor, the Class A Certificate
Insurer and any agent of the Servicer, the Depositor, the Class A Certificate
Insurer or the Trustee may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Servicer, the Trustee, the Depositor, the Class A
Certificate Insurer nor any agent of the Servicer, the Depositor, the Class A
Certificate Insurer or the Trustee shall be affected by any notice to the
contrary.
Section 5.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 MAINTENANCE OF OFFICE OR AGENCY.
The Trustee will maintain or cause to be maintained at its expense
an office or offices or agency or agencies in New York City where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates the offices of its agent for such purposes located at c/o
DTC Transfer Agent Services, 00 Xxxxx Xxxxxx, Xxxxxxxx Xxxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000. The Trustee will give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
Section 5.07 RIGHTS OF THE CLASS A CERTIFICATE INSURER TO EXERCISE
RIGHTS OF CLASS A CERTIFICATEHOLDERS.
By accepting its Class A Certificate, each Class A Certificateholder
agrees that unless a Class A Certificate Insurer Default exists, the Class A
Certificate Insurer shall be deemed to be the Class A Certificateholders for all
purposes (other than with respect to the receipt of payment on the Class A
Certificates) and shall have the right to exercise all rights of the Class A
Certificateholders under this Agreement and under the Class A Certificates
without any further consent of the Class A Certificateholders, including,
without limitation:
(a) the right to require the Unaffiliated Seller to repurchase
Mortgage Loans pursuant to Section 2.03 hereof to the extent set forth in such
Section;
(b) the right to give notices of breach or to terminate the rights
and obligations of the Servicer as servicer pursuant to Section 7.01 hereof;
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(c) the right to direct the actions of the Trustee during the
continuance of a Servicer default pursuant to Sections 3.24, 7.01 and 7.02
hereof;
(d) the right to institute proceedings against the Servicer
pursuant to Section 7.01 hereof;
(e) the right to direct the Trustee to investigate certain matters
pursuant to Sections 8.01 and 8.02 hereof;
(f) the right to remove the Trustee pursuant to Section 8.07
hereof;
(g) any rights or remedies expressly given the Class A
Certificateholders.
In addition, each Certificateholder agrees that, subject to Section
10.11, unless a Class A Certificate Insurer Default exists, the rights
specifically enumerated above may only be exercised by the Certificateholders
with the prior written consent of the Class A Certificate Insurer.
Section 5.08 TRUSTEE TO ACT SOLELY WITH CONSENT OF THE CLASS A
CERTIFICATE INSURER.
Unless a Class A Certificate Insurer Default exists, the Trustee
shall not, without the Class A Certificate Insurer's consent or unless directed
by the Class A Certificate Insurer:
(a) terminate the rights and obligations of the Servicer as
Servicer pursuant to Section 7.01 hereof;
(b) agree to any amendment pursuant to Section 10.01 hereof; or
(c) undertake any litigation.
The Class A Certificate Insurer may, in writing and in its sole
discretion renounce all or any of its rights under this Agreement or any
requirement for the Class A Certificate Insurer's consent for any period of
time.
Section 5.09 MORTGAGE LOANS, TRUST FUND AND ACCOUNTS HELD FOR
BENEFIT OF THE CLASS A CERTIFICATE INSURER.
(a) The Trustee shall hold the Trust Fund and the Custodial Files
for the benefit of the Certificateholders and the Class A Certificate Insurer
and all references in this Agreement and in the Certificates to the benefit of
Holders of the Certificates shall be deemed to include the Class A Certificate
Insurer. The Trustee shall cooperate in all reasonable respects with any
reasonable request by the Class A Certificate Insurer for action to preserve or
enforce the Class A Certificate Insurer's rights or interests under this
Agreement and the Class A Certificates unless, as stated in an Opinion of
Counsel addressed to the Trustee and the Class A Certificate Insurer, such
action is adverse to the interests of the Class A Certificateholders or
diminishes the rights of the Class A Certificateholders or imposes additional
burdens or restrictions on the Class A Certificateholders.
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(b) The Servicer hereby acknowledges and agrees that it shall
service the Mortgage Loans for the benefit of the Certificateholders and for the
benefit of the Class A Certificate Insurer, and all references in this Agreement
to the benefit of or actions on behalf of the Certificateholders shall be deemed
to include the Class A Certificate Insurer.
Section 5.10 CLASS A CERTIFICATE INSURER DEFAULT.
Notwithstanding anything elsewhere in this Agreement or in the
Certificates to the contrary, if a Class A Certificate Insurer Default exists,
or if and to the extent the Class A Certificate Insurer has delivered its
written renunciation of all of its rights under this Agreement, all provisions
of this Agreement which (a) permit the Class A Certificate Insurer to exercise
rights of the Class A Certificateholders, (b) restrict the ability of the
Certificateholders, the Servicer or the Trustee to act without the consent or
approval of the Class A Certificate Insurer, (c) provide that a particular act
or thing must be acceptable to the Class A Certificate Insurer, (d) permit the
Class A Certificate Insurer to direct (or otherwise to require) the actions of
the Trustee, the Servicer or the Certificateholders, (e) provide that any action
or omission taken with the consent, approval or authorization of the Class A
Certificate Insurer shall be authorized hereunder or shall not subject the party
taking or omitting to take such action to any liability hereunder or (f) which
have a similar effect, shall be of no further force and effect and the Trustee
shall administer the Trust Fund and perform its obligations hereunder solely for
the benefit of the Holders of the Certificates. Nothing in the foregoing
sentence, nor any action taken pursuant thereto or in compliance therewith,
shall be deemed to have released the Class A Certificate Insurer from any
obligation or liability it may have to any party or to the Class A
Certificateholders hereunder, under any other agreement, instrument or document
(including, without limitation, the Class A Insurance Policy) or under
applicable law.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 RESPECTIVE LIABILITIES OF THE DEPOSITOR AND THE
SERVICER.
The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE
SERVICER.
The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federal savings bank, as
the case may be, under the laws of the United States or under the laws of one of
the states thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any person succeeding to the
business of the Depositor or the
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Servicer, shall be the successor of the Depositor or the Servicer, as the case
may be, hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; PROVIDED, HOWEVER, that the successor or surviving Person to
the Servicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, Xxxxxx Mae or FHLMC.
Section 6.03 LIMITATION ON LIABILITY OF THE DEPOSITOR, THE SERVICER
AND OTHERS.
Neither the Depositor, the Servicer, the Trustee nor any of their
respective directors, officers, employees or agents shall be under any liability
to the Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; PROVIDED, HOWEVER, that this provision shall not protect the
Depositor, the Servicer, the Trustee or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Servicer, the Trustee or any such Person from any liability which would
otherwise be imposed by reasons of willful misfeasance, bad faith or gross
negligence (or with respect to the Servicer or the Trustee, negligence) in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor and any director, officer, employee or agent of
the Depositor may rely in good faith on any document of any kind PRIMA FACIE
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Servicer, the Trustee and any director, officer,
employee or agent of the Depositor, the Servicer or the Trustee shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates (including, as to the Trustee,
the undertaking of actions as directed by the Unaffiliated Seller or the Class A
Certificate Insurer pursuant to Section 2.03), other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
(or with respect to the Servicer or the Trustee, negligence) in the performance
of their respective duties hereunder or by reason of reckless disregard of their
respective obligations and duties hereunder. The Depositor shall not be under
any obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and which in its opinion may
involve it in any expense or liability; PROVIDED, HOWEVER, that the Depositor
may in its discretion undertake any such action (or direct the Trustee to
undertake any such actions pursuant to Section 2.03 hereof for the benefit of
the Certificateholders) that it may deem necessary or desirable in respect of
this Agreement and the rights and duties of the parties hereto and interests of
the Trustee and the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor shall be
entitled to be reimbursed therefor out of the Collection Account.
Neither the Servicer nor any of the officers, employees or agents of
the Servicer shall be under any liability to the Trustee or the Depositor for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement; PROVIDED, HOWEVER, that this provision shall not
protect the Servicer or any such person against any breach of warranties or
representations made herein, or failure to perform its obligations in compliance
with the terms of this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Servicer and any officer, employee or agent of the Servicer may rely in good
faith on any document of any kind PRIMA FACIE properly executed
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and submitted by any Person respecting any matters arising hereunder. The
Servicer shall not be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its duties to service the Mortgage Loans
in accordance with this Agreement and which in its opinion may involve it in any
expenses or liability; PROVIDED, HOWEVER, that the Servicer may undertake any
such action which it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto. In such event, the
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Trust Fund, and the Servicer
shall be entitled to be reimbursed therefor out of the Collection Account.
Section 6.04 LIMITATION ON RESIGNATION OF THE SERVICER.
The Servicer shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Depositor and the Trustee or upon the determination that its
duties hereunder are no longer permissible under applicable law and such
incapacity cannot be cured by the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Depositor and the Trustee which Opinion of Counsel
shall be in form and substance acceptable to the Depositor and the Trustee. No
such resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder.
Section 6.05 ADDITIONAL INDEMNIFICATION BY THE SERVICER; THIRD PARTY
CLAIMS.
The Servicer shall indemnify the Depositor, the Unaffiliated Seller
and the Trustee and hold them harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain in any way related to any breach by the Servicer, of any of its
representations and warranties referred to in Section 2.03(a) or the failure of
the Servicer to perform its duties and service the Mortgage Loans in compliance
with the terms of this Agreement. The Servicer immediately shall notify the
Depositor, the Unaffiliated Seller and the Trustee if a claim is made by a third
party with respect to any such breach or failure by the Servicer under this
Agreement, assume (with the prior written consent of the Depositor, the
Unaffiliated Seller and the Trustee) the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Depositor, the Unaffiliated Seller or the Trustee in respect
of such claim; PROVIDED, that if it is determined that the Servicer is not
obligated to indemnify such parties in accordance with this Section 6.05, each
such party (or the Trust Fund, if applicable) shall promptly reimburse the
Servicer in connection with each of the foregoing payments made to such party by
the Servicer.
ARTICLE VII
DEFAULT
Section 7.01 EVENTS OF DEFAULT.
"EVENT OF DEFAULT," wherever used herein, means any one of the
following events:
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(a) any failure by the Servicer to remit to the Trustee any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Depositor, by the Class A Certificate Insurer or by the
Trustee or to the Trustee by Certificateholders evidencing percentage interests
of at least 25% in the Certificates; or
(b) failure on the part of the Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the part of
the Servicer set forth in this Agreement which continues unremedied for a period
of forty-five days (except that such number of days shall be fifteen in the case
of a failure to pay any premium for any insurance policy required to be
maintained under this Agreement) after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Depositor, by the Class A Certificate Insurer,
or by the Trustee, or to the Trustee by Certificateholders of Certificates
evidencing percentage interests of at least 25% in the Certificates and (ii)
actual knowledge of such failure by a Servicing Officer of the Servicer; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) any failure by the Servicer of the Servicer Termination Test;
or
(g) any failure of the Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied for one Business Day immediately following the
Remittance Date; or
(h) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to the Servicer by the Trustee, by the Class A Certificate Insurer, or by the
Depositor, or to the Trustee by Certificateholders entitled to at least 25% of
the Voting Rights in the Certificates.
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If an Event of Default described in clauses (a) through (h) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, or at the
direction of the Class A Certificate Insurer, or of Holders holding at least 51%
of the Voting Rights, the Trustee shall, by notice in writing to the Servicer
(with a copy to each Rating Agency), terminate all of the rights and obligations
of the Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder;
PROVIDED, HOWEVER, that the Trustee shall not be required to give written notice
to the Servicer of the occurrence of an Event of Default described in clauses
(b) through (h) of this Section 7.01 unless and until a Responsible Officer of
the Trustee has actual knowledge of the occurrence of such an Event of Default.
On and after the receipt by the Servicer of such written notice, all authority
and power of the Servicer hereunder, whether with respect to the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee. The Trustee shall make
any P&I Advance which the Servicer failed to make subject to Section 4.01,
whether or not the obligations of the Servicer have been terminated pursuant to
this Section. The Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Servicer to pay amounts owed pursuant to Article VIII. The Servicer
agrees to cooperate with the Trustee in effecting the termination of the
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee of all cash amounts which shall at the time be
credited to the Collection Account, or thereafter be received with respect to
the Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan which was due prior to the notice
terminating such Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which such Servicer would
have been entitled pursuant to Section 3.11, and any other amounts payable to
such Servicer hereunder the entitlement to which arose prior to the termination
of its activities hereunder in accordance with Section 3.11 and in the time
period specified in Section 3.11.
Section 7.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Servicer receives a notice of termination
pursuant to Section 3.24 or Section 7.01, the Trustee shall, unless the Class A
Certificate Insurer shall have named an alternative successor Servicer and given
written notice thereof to the Trustee of at least 30 days prior to the effective
date of the transfer of servicing to such successor, subject to and to the
extent provided in Section 3.05, be the successor to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof and applicable law including the obligation to make P&I Advances or
Servicing Advances pursuant to Section 4.01. As compensation therefor, the
Trustee shall be entitled to all funds relating to the Mortgage Loans that the
Servicer would have been entitled to charge to the Collection Account or
Distribution Account if the Servicer had continued to act
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hereunder including, if the Servicer was receiving the Servicing Fee, the
Servicing Fee and the income on investments or gain related to the Collection
Account and Distribution Account.
Notwithstanding the foregoing, if the Trustee has become the
successor to the Servicer in accordance with Section 7.01, the Trustee may, if
it shall be unwilling to so act, or shall, if it is prohibited by applicable law
from making P&I Advances and Servicing Advances pursuant to Section 4.01 or if
it is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency, as the successor to the Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer hereunder. Any successor to the Servicer shall be an
institution which is a Xxxxxx Xxx and FHLMC approved seller/servicer in good
standing, which has a net worth of at least $30,000,000, which is willing to
service the Mortgage Loans and which executes and delivers to the Depositor and
the Trustee an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer (other than liabilities of the
Servicer under Section 6.03 incurred prior to termination of the Servicer under
Section 7.01), with like effect as if originally named as a party to this
Agreement; PROVIDED that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced, as a result of such assignment and delegation.
Pending appointment of a successor to the Servicer hereunder, the Trustee,
unless the Trustee is prohibited by law from so acting, shall, subject to
Section 3.05, act in such capacity as hereinabove provided. In connection with
such appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; PROVIDED, HOWEVER, that no such compensation shall be in
excess of the Servicing Fee Rate and amounts paid to the Servicer from
investments. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Neither the Trustee nor any other successor servicer shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer, maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.
Section 7.03 NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Class A Certificate Insurer, the Unaffiliated Seller and
to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default,
the Trustee shall transmit by mail to all Certificateholders, the Class A
Certificate Insurer, the Unaffiliated
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Seller and each Rating Agency notice of each such Event of Default hereunder
known to the Trustee, unless such Event of Default shall have been cured or
waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 DUTIES OF THE TRUSTEE.
The Trustee, before the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing,
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Class A Certificate Insurer, or of Holders of Certificates
evidencing not less than 25% of the Voting Rights of Certificates relating to
the time, method, and place of conducting any proceeding for any remedy
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available to the Trustee, or exercising any trust or power conferred upon the
Trustee under this Agreement.
Section 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.
Except as otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by the Class A
Certificate Insurer, or by Holders of Certificates evidencing not less than 25%
of the Voting Rights allocated to each Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security);
(h) the Trustee shall not be deemed to have knowledge of an Event
of Default until a Responsible Officer of the Trustee shall have received
written notice thereof; and
(i) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation
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hereunder or in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity satisfactory
to the Trustee against the costs, expenses and liabilities which may be incurred
therein or thereby.
Section 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates shall be taken
as the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Trustee's execution and
countersignature of the Certificates. The Trustee shall not be accountable for
the use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 TRUSTEE MAY OWN CERTIFICATES.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 TRUSTEE'S FEES AND EXPENSES.
(a) As compensation for its activities under this Agreement, the
Trustee may withdraw from the Distribution Account on each Distribution Date the
Trustee Fee for the Distribution Date. The Trustee and any director, officer,
employee, or agent of the Trustee shall be indemnified by the Servicer against
any loss, liability, or expense (including reasonable attorney's fees) resulting
from any failure by the Servicer to perform its obligations under this
Agreement. This indemnity shall survive the termination of this Agreement or the
resignation or removal of the Trustee under this Agreement.
The Trustee shall not be entitled to payment or reimbursement from
the Unaffiliated Seller for any routine ongoing expenses incurred by the Trustee
in the ordinary course of its duties as Trustee, Registrar, or paying agent
under this Agreement or for any other expenses, including indemnification
payments, except as set forth herein.
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Section 8.06 ELIGIBILITY REQUIREMENTS FOR THE TRUSTEE.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with this
Section 8.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its affiliates or the
Servicer and its affiliates; PROVIDED, HOWEVER, that such entity cannot be an
affiliate of the Depositor, the Unaffiliated Seller or the Servicer other than
the Trustee in its role as successor to the Servicer.
Section 8.07 RESIGNATION AND REMOVAL OF THE TRUSTEE.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Servicer, the Class A Certificate Insurer, the Unaffiliated Seller, each Rating
Agency not less than 60 days before the date specified in such notice, when,
subject to Section 8.08, such resignation is to take effect, and acceptance by a
successor trustee in accordance with Section 8.08 meeting the qualifications set
forth in Section 8.06. If no successor trustee meeting such qualifications shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor or the Servicer may remove the Trustee and
appoint a successor trustee reasonably acceptable to the Class A Certificate
Insurer by written instrument, in triplicate, one copy of which shall be
delivered to the Trustee, one copy to the Servicer and one copy to the successor
trustee.
The Class A Certificate Insurer or the Holders of Certificates
entitled to at least 51% of the Voting Rights may at any time remove the Trustee
and appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact
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duly authorized, one complete set of which shall be delivered by the successor
Trustee to the Servicer, one complete set to the Trustee so removed and one
complete set to the successor so appointed. The successor trustee shall notify
each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
and the Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Class A Certificate Insurer, the
Servicer and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 MERGER OR CONSOLIDATION OF THE TRUSTEE.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, PROVIDED that such corporation shall be eligible under
Section 8.06 without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and
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to vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof, whichever
is applicable, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Servicer and the Trustee
may consider appropriate. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request to do so, or in
the case an Event of Default shall have occurred and be continuing, the Trustee
alone shall have the power to make such appointment. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.06 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Servicer, shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because
of any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(d) The Trustee, and not the Servicer, shall be liable for the
payment of reasonable compensation and expenses to any such separate trustee or
co-trustee from the Trustee Fee payable to the Trustee on each Distribution
Date.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection and indemnity to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer and the Depositor.
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Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 TAX MATTERS.
It is intended that the assets with respect to which any REMIC
election pertaining to the Trust Fund is to be made, as set forth in the
Preliminary Statement, shall constitute, and that the conduct of matters
relating to such assets shall be such as to qualify such assets as, a "real
estate mortgage investment conduit" as defined in and in accordance with the
REMIC Provisions. In furtherance of such intention, the Trustee covenants and
agrees that it shall act as agent (and the Trustee is hereby appointed to act as
agent) on behalf of any the REMIC and that in such capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit Income Tax Return (Form 1066 or any successor form
adopted by the Internal Revenue Service) and prepare and file with the Internal
Revenue Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to any REMIC described in
the Preliminary Statement containing such information and at the times and in
the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby;
(b) within thirty days of the Closing Date, furnish to the
Internal Revenue Service on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of the Lower Tier REMIC, the Middle
Tier REMIC and the Upper Tier REMIC be treated as a REMIC on the federal tax
return for its first taxable year (and, if necessary, under applicable state
law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the Prepayment Assumption (as defined in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a
Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the
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reasonable cost of computing and furnishing such information may be charged to
the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status as a REMIC under the REMIC Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any REMIC
created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any REMIC created hereunder
before its termination when and as the same shall be due and payable (but such
obligation shall not prevent the Trustee or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trustee from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings);
(i) cause federal, state or local income tax or information
returns to be signed by the Trustee or such other person as may be required to
sign such returns by the Code or state or local laws, regulations or rules;
(j) maintain records relating to each REMIC created hereunder,
including the income, expenses, assets, and liabilities thereof on a calendar
year basis and on the accrual method of accounting and the fair market value and
adjusted basis of the assets determined at such intervals as may be required by
the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and
(k) as and when necessary and appropriate, represent each REMIC
created hereunder in any administrative or judicial proceedings relating to an
examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of each REMIC created
hereunder, enter into settlement agreements with any governmental taxing agency,
extend any statute of limitations relating to any tax item of any REMIC created
hereunder, and otherwise act on behalf of the REMIC in relation to any tax
matter or controversy involving it.
The Trustee shall treat the rights of the Class P Certificateholders
to Prepayment Charges as the beneficial ownership of interests in a grantor
trust, and not as an obligation of any REMIC created hereunder, for federal
income tax purposes.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value to each Class of
Certificates of the right to receive Basis Risk CarryForward Amounts from the
Excess Reserve Fund Account. Thereafter, the Depositor shall provide to the
Trustee promptly upon written request therefor any
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additional information or data that the Trustee may, from time to time,
reasonably request to enable the Trustee to perform its duties under this
Agreement. The Depositor hereby indemnifies the Trustee for any losses,
liabilities, damages, claims, or expenses of the Trustee arising from any errors
or miscalculations of the Trustee that result from any failure of the Depositor
to provide, or to cause to be provided, accurate information or data to the
Trustee on a timely basis.
If any tax is imposed on "prohibited transactions" of any REMIC
created hereunder as defined in Section 860F(a)(2) of the Code, on the "net
income from foreclosure property" of such REMIC as defined in Section 860G(c) of
the Code, on any contribution to the REMIC after the Startup Day pursuant to
Section 860G(d) of the Code, or any other tax is imposed, including any minimum
tax imposed on the REMIC pursuant to Sections 23153 and 24874 of the California
Revenue and Taxation Code, if not paid as otherwise provided for herein, the tax
shall be paid by (i) the Trustee if such tax arises out of or results from
negligence of the Trustee in the performance of any of its obligations under
this Agreement, (ii) the Servicer if such tax arises out of or results from a
breach by the Servicer of any of its obligations under this Agreement, (iii) the
Unaffiliated Seller shall pay if such tax arises out of or results from the
Unaffiliated Seller's obligation to repurchase a Mortgage Loan pursuant to
Section 2.03, or (iv) in all other cases, or if the Trustee, the Servicer or the
Unaffiliated Seller fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid with amounts otherwise to be distributed
to the Certificateholders, as provided in Section 4.02(a).
Section 8.12 PERIODIC FILINGS.
Pursuant to written instructions from the Depositor, the Trustee
shall prepare, execute and file all periodic reports required under the
Securities Exchange Act of 1934 in conformity with the terms of the relief
granted to issuers similar to the Trust Fund. In connection with the preparation
and filing of such periodic reports, the Depositor and the Servicer shall timely
provide to the Trustee all material information available to them which is
required to be included in such reports and not known to them to be in the
possession of the Trustee and such other information as the Trustee reasonably
may request from either of them and otherwise reasonably shall cooperate with
the Trustee. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct.
Section 8.13 TAX CLASSIFICATION OF CERTAIN ACCOUNTS.
For federal income tax purposes, the Trustee shall treat the Excess
Reserve Fund Account as an outside reserve fund, within the meaning of Treasury
Regulation ss. 1.860G-2(h), that is beneficially owned by the holder of the
Class X Certificate. The Trustee shall treat the rights that each Class of
Certificates has to receive payments of Basis Risk CarryForward Amounts from the
Excess Reserve Fund Account as rights to receive payments under an interest rate
cap contract written by the Class X Certificateholder in favor of each Class.
Accordingly, each Class of Certificates (excluding the Class X, Class P and
Class R Certificates) will comprise two components - an Upper Tier Regular
Interest and an interest in a notional principal contract. The Trustee shall
allocate the issue price for a Class of Certificates between two components for
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purposes of determining the issue price of the Upper Tier Regular Interest
component based on information received from the Depositor.
ARTICLE IX
TERMINATION
Section 9.01 TERMINATION UPON LIQUIDATION OR PURCHASE OF THE
MORTGAGE LOANS.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer and the Trustee created hereby with respect to the Trust
Fund shall terminate upon the earlier of (a) the purchase, on or after the
applicable Optional Termination Date, by the Servicer or the Class X
Certificateholders of all Mortgage Loans (and REO Properties) at the price equal
to the sum of (i) 100% of the Stated Principal Balance of each Mortgage Loan
(other than in respect of REO Property) plus one month's accrued interest
thereon at the applicable Adjusted Mortgage Rate and (ii) the lesser of (x) the
appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by the Servicer at
the expense of the Servicer and (y) the Stated Principal Balance of each
Mortgage Loan related to any REO Property, in each case plus accrued and unpaid
interest thereon at the applicable Adjusted Net Mortgage Rate and (b) the later
of (i) the maturity or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and the disposition of all
REO Property and (ii) the distribution to Certificateholders of all amounts
required to be distributed to them pursuant to this Agreement. In no event shall
the trusts created hereby continue beyond the expiration of 21 years from the
death of the survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. James's, living on the date
hereof.
No such purchase will be permitted without the consent of the Class
A Certificate Insurer, unless no draw on the Class A Insurance Policy would be
made or unreimbursed on the final Distribution Date.
Section 9.02 FINAL DISTRIBUTION ON THE CERTIFICATES.
If on any Determination Date, the Servicer determines that there are
no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Account, the Servicer shall direct the
Trustee promptly to send a Notice of Final Distribution each Certificateholder.
If the Servicer or the Class X Certificateholder elects to terminate the Trust
Fund pursuant to clause (a) of Section 9.01, at least 20 days prior to the date
the Notice of Final Distribution is to be mailed to the affected
Certificateholders such electing party shall notify the Depositor and the
Trustee of the date the Servicer or the Class X Certificateholder intends to
terminate the Trust Fund and of the applicable repurchase price of the Mortgage
Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to Certificateholders mailed not earlier than the 15th day and not later
than the 10th day of the month next preceding the month
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of such final distribution. Any such Notice of Final Distribution shall specify
(a) the Distribution Date upon which final distribution on the Certificates will
be made upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such Notice
of Final Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Servicer the Custodial Files for the
Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class, in each
case on the final Distribution Date and in the order set forth in Section 4.02,
in proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each Class of
Regular Certificates (except the Class X Certificate), the Certificate Balance
thereof plus for each such Class and the Class X Certificate accrued interest
thereon in the case of an interest-bearing Certificate and (ii) as to the
Residual Certificates, the amount, if any, which remains on deposit in the
Distribution Account (other than the amounts retained to meet claims) after
application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 ADDITIONAL TERMINATION REQUIREMENTS.
In the event the Servicer or the Class X Certificateholder, as
applicable, exercises its purchase option with respect to the Mortgage Loans as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Servicer or the Class X
Certificateholder, as applicable, to the effect that the failure to comply with
the requirements of this Section 9.03 will not (i) result in the imposition of
taxes on "prohibited transactions" on either REMIC as defined in Section 860F of
the Code, or (ii) cause either the Lower Tier REMIC
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or the Upper Tier REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to
the Servicer or the Class X Certificateholder, as applicable, and, within 90
days of such sale, shall distribute to the Certificateholders the proceeds of
such sale in complete liquidation of each of the Lower Tier REMIC, the Middle
Tier REMIC and the Upper Tier REMIC.
(b) The Trustee shall attach a statement to the final federal
income tax return for each of the Lower Tier REMIC, the Middle Tier REMIC and
the Upper Tier REMIC stating that pursuant to Treasury Regulation ss. 1.860F-1,
the first day of the 90-day liquidation period for each such REMIC was the date
on which the Trustee sold the assets of the Trust Fund to the Servicer or the
Class X Certificateholder, as applicable.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 AMENDMENT.
This Agreement may be amended from time to time (x) by the
Depositor, the Servicer and the Trustee, with the prior written consent of the
Class A Certificate Insurer, (y) with the consent of the Unaffiliated Seller
unless the Trustee receives an Opinion of Counsel (which Opinion of Counsel
shall not be an expense of the Trustee or the Trust Fund) stating that the
amendment will not adversely affect the Unaffiliated Seller, but (z) without the
consent of any of the Certificateholders (i) to cure any ambiguity or mistake,
(ii) to correct any defective provision herein or to supplement any provision
herein which may be inconsistent with any other provision herein, (iii) to add
to the duties of the Depositor or the Servicer, (iv) to add any other provisions
with respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; PROVIDED, that any action pursuant to clauses (iv) or (v) above shall
not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall not
be an expense of the Trustee or the Trust Fund), adversely affect in any
material respect the interests of any Certificateholder; and PROVIDED, FURTHER,
that the amendment shall not be deemed to adversely affect in any material
respect the interests of the Certificateholders if the Person requesting the
amendment obtains a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates; it being understood and agreed that any such
letter in and of itself will not represent a determination as to the materiality
of any such amendment and will represent a determination only as to the credit
issues affecting any such rating.
In addition, this Agreement may also be amended from time to time
(x) by the Trustee, the Depositor and the Servicer, with the prior written
consent of the Class A Certificate Insurer, and (y) with the consent of the
Unaffiliated Seller unless the Trustee receives an Opinion of Counsel (which
Opinion of Counsel shall not be an expense of the Trustee or the Trust Fund)
stating that the amendment will not adversely affect the Unaffiliated Seller,
but (z) without the consent of the Certificateholders, to modify, eliminate or
add to any of its provisions to such
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extent as shall be necessary or helpful to (i) maintain the qualification of the
Lower Tier REMIC, the Middle Tier REMIC and the Upper Tier REMIC under the Code,
(ii) avoid or minimize the risk of the imposition of any tax on the Lower Tier
REMIC, the Middle Tier REMIC or the Upper Tier REMIC pursuant to the Code that
would be a claim at any time prior to the final redemption of the Certificates
or (iii) comply with any other requirements of the Code; PROVIDED, that the
Trustee has been provided an Opinion of Counsel, which opinion shall be an
expense of the party requesting such opinion but in any case shall not be an
expense of the Trustee or the Trust Fund, to the effect that such action is
necessary or helpful to, as applicable, (i) maintain such qualification, (ii)
avoid or minimize the risk of the imposition of such a tax or (iii) comply with
any such requirements of the Code.
This Agreement may also be amended from time to time (x) by the
Depositor, the Servicer and the Trustee, with the prior written consent of the
Class A Certificate Insurer, (y) with the consent of the Unaffiliated Seller
unless the Trustee receives an Opinion of Counsel (which Opinion of Counsel
shall not be an expense of the Trustee or the Trust Fund) stating that the
amendment will not adversely affect the Unaffiliated Seller, and (z), except as
set forth in Section 3.27, with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66-2/3% of each Class
of Certificates (based on the aggregate outstanding principal balance of such
class at such time) affected thereby, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders of
Certificates; PROVIDED, HOWEVER, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing, as
to such Class, Percentage Interests aggregating not less than 66-2/3%, or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any REMIC or the Certificateholders or cause
any REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the
Depositor, the Unaffiliated Seller or any of their respective Affiliates shall
be deemed not to be outstanding (and shall not be considered when determining
the percentage of Certificateholders consenting or when calculating the total
number of Certificates entitled to consent) for purposes of determining if the
requisite consents of Certificateholders under this Section 10.01 have been
obtained.
118
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02 RECORDATION OF AGREEMENT; COUNTERPARTS.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Servicer at its expense, but only upon
receipt of an Opinion of Counsel to the effect that such recordation materially
and beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.04 INTENTION OF PARTIES.
It is the express intent of the parties hereto that the conveyance
(i) of the Mortgage Loans by the Depositor and (ii) of the Trust Fund by the
Depositor to the Trustee each be, and be construed as, an absolute sale thereof.
It is, further, not the intention of the parties that such conveyances be deemed
a pledge thereof. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Depositor, as the case
may be,
119
or if for any other reason this Agreement is held or deemed to create a security
interest in either such assets, then (i) this Agreement shall be deemed to be a
security agreement within the meaning of the Uniform Commercial Code of the
State of New York and (ii) the conveyances provided for in this Agreement shall
be deemed to be an assignment and a grant by the Depositor to the Trustee, for
the benefit of the Certificateholders, of a security interest in all of the
assets transferred, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders and of the
Class A Certificate Insurer shall, to the extent consistent with this Agreement,
take such actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Trust Fund, such security interest
would be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of the
Agreement. The Depositor shall arrange for filing any Uniform Commercial Code
continuation statements in connection with any security interest granted or
assigned to the Trustee for the benefit of the Certificateholders.
Section 10.05 NOTICES.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been
cured;
3. The resignation or termination of the Servicer or the Trustee
and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
1. Each report to Certificateholders described in Section 4.03;
and
2. Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor or the Representative, Xxxxxx Xxxxxxx ABS Capital I Inc. or Xxxxxx
Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxxx Xxxxx, Esq., (b) in the case of the Servicer, Ocwen Federal Bank FSB,
0000 Xxxx Xxxxx Xxxxx Xxxx., Xxxxx 00X, Xxxx Xxxx Xxxxx, Xxxxxxx 00000,
Attention: Secretary, or such other address as may be hereafter furnished to the
parties hereto in writing, (c) in the case of the Trustee to the Corporate Trust
Office,
120
Deutsche Bank National Trust Company, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx,
Xxxxxxxxxx 00000-0000, Attention: Trust Administration DC02M2, or such other
address as the Trustee may hereafter furnish to the parties hereto, (d) in the
case of the Unaffiliated Seller, CDC Mortgage Capital, Inc., 0 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention General Counsel, or such other address as
the Unaffiliated Seller may hereafter furnish to the parties hereto, (e) in the
case of each of the Rating Agencies, the address specified therefor in the
definition corresponding to the name of such Rating Agency and (f) in the case
of any Originator, the address specified therefor in the applicable Mortgage
Loan Purchase Agreement. Notices to Certificateholders shall be deemed given
when mailed, first class postage prepaid, to their respective addresses
appearing in the Certificate Register.
Section 10.06 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 ASSIGNMENT.
Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.02, this Agreement may not be assigned by the Servicer
without the prior written consent of the Trustee, the Class A Certificate
Insurer and Depositor; PROVIDED, HOWEVER, that, subject to Section 3.27, the
Servicer may pledge or sell its interest in any reimbursements for P&I Advances
or Servicing Advances hereunder.
Section 10.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
121
Rights evidenced by the Certificates, and the Class A Certificate Insurer, shall
also have made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses,
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 10.08, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
Section 10.09 INSPECTION AND AUDIT RIGHTS.
The Servicer agrees that, on reasonable prior notice, it will permit
any representative of the Depositor, the Unaffiliated Seller, the Class A
Certificate Insurer or the Trustee during the Servicer's normal business hours,
to examine all the books of account, records, reports and other papers of the
Servicer relating to the Mortgage Loans, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants
selected by the party conducting the inspection and to discuss its affairs,
finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Servicer
hereby authorizes said accountants to discuss with such representative such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any out-of-pocket expense of the Servicer incident
to the exercise by the Depositor, the Unaffiliated Seller, the Class A
Certificate Insurer or the Trustee of any right under this Section 10.09 shall
be borne by the Servicer.
Section 10.10 CERTIFICATES NONASSESSABLE AND FULLY PAID.
It is the intention of the Depositor that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 THE CLASS A CERTIFICATE INSURER DEFAULT.
Any right conferred to the Class A Certificate Insurer shall be
suspended during any period in which a Class A Certificate Insurer Default
exists. At such time as the Class A Certificates are no longer outstanding
hereunder, and no amounts owed to the Class A Certificate Insurer hereunder
remain unpaid, the Class A Certificate Insurer's rights hereunder shall
terminate.
122
Section 10.12 THIRD PARTY BENEFICIARY.
The parties agree that the Class A Certificate Insurer is intended
and shall have all rights of a third-party beneficiary of this Agreement.
Section 10.13 WAIVER OF JURY TRIAL.
EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WAIVES
(TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT
ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 10.14 LIMITATION OF DAMAGES.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE
PARTIES HERETO AGREE THAT NO PARTY HERETO SHALL BE LIABLE TO ANY OTHER PARTY
HERETO FOR ANY SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES WHATSOEVER, WHETHER IN
CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR ANY OTHER LEGAL OR
EQUITABLE PRINCIPLES; PROVIDED THAT, THE FOREGOING PROVISION SHALL NOT LIMIT OR
RELIEVE ANY PARTY HERETO OF ANY OBLIGATION UNDER THIS AGREEMENT TO INDEMNIFY ANY
OTHER PARTY HERETO AGAINST (X) ANY DAMAGES IMPOSED UPON SUCH PARTY BY ANY THIRD
PARTY CLAIM OR ORDER, DECREE OR ACTION OF ANY REGULATORY OR ADMINISTRATIVE BODY,
OR (Y) WITH RESPECT TO ANY LOSSES SUSTAINED OR EXPENSES INCURRED BY OR ON BEHALF
OF THE TRUST (IT BEING UNDERSTOOD THAT TRUST LOSSES CAUSED BY THE SERVICER'S
FAILURE TO PERFORM ITS DUTIES SHALL NOT BE CONSIDERED "CONSEQUENTIAL" OR
"SPECIAL" DAMAGES FOR PURPOSES OF THE LIMITATION PROVIDED ABOVE, AND SHALL BE
COVERED BY THE INDEMNIFICATION PROVIDED HEREIN).
* * * * * * *
123
IN WITNESS WHEREOF, the Depositor, the Trustee, the Unaffiliated
Seller and the Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor
By:
-------------------------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its individual capacity
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
OCWEN FEDERAL BANK FSB,
as Servicer
By:
-------------------------------------------------
Name:
Title:
CDC MORTGAGE CAPITAL INC.,
as Unaffiliated Seller
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
SCHEDULE I
Mortgage Loan Schedule
[See Exhibit A to the Unaffiliated Seller's Agreement, Tab 2]
I-1
SCHEDULE II
CDC MORTGAGE CAPITAL TRUST 2002-HE2
Mortgage Pass-Through Certificates,
Series 2002-HE2
REPRESENTATIONS AND WARRANTIES OF THE SERVICER
OCWEN FEDERAL BANK FSB (the "SERVICER") hereby makes the
representations and warranties set forth in this Schedule II to the Depositor,
the Unaffiliated Seller, the Class A Certificate Insurer and the Trustee, as of
the Closing Date. Capitalized terms used but not otherwise defined in this
Schedule II shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement (the "POOLING AND SERVICING AGREEMENT") relating to the
above-referenced Series.
(1) The Servicer is a federally chartered savings bank duly
organized, validly existing and in good standing under the laws of the
United States of America and is duly authorized and qualified to transact
any and all business contemplated by this Pooling and Servicing Agreement
to be conducted by the Servicer in any state in which a Mortgaged Property
is located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its
ability to enforce each Mortgage Loan and to service the Mortgage Loans in
accordance with the terms of this Pooling and Servicing Agreement;
(2) The Servicer has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing
Agreement and has duly authorized by all necessary action on the part of
the Servicer the execution, delivery and performance of this Pooling and
Servicing Agreement; and this Pooling and Servicing Agreement, assuming
the due authorization, execution and delivery thereof by the other parties
thereto, constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms,
except to the extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans by the
Servicer hereunder, the consummation by the Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Servicer and will not (A) result in a breach of any term or provision of
the organizational documents of the Servicer or (B) conflict with, result
in a breach, violation or acceleration of, or result in a default under,
the terms of any other material agreement
II-1
or instrument to which the Servicer is a party or by which it may be
bound, or any statute, order or regulation applicable to the Servicer of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Servicer; and the Servicer is not a party to,
bound by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and
adversely affects or, to the Servicer's knowledge, would in the future
materially and adversely affect, (x) the ability of the Servicer to
perform its obligations under this Pooling and Servicing Agreement or (y)
the business, operations, financial condition, properties or assets of the
Servicer taken as a whole;
(4) The Servicer is an approved seller/servicer for Xxxxxx Xxx or
Xxxxxxx Mac in good standing and is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act;
(5) No litigation is pending against the Servicer that would
materially and adversely affect the execution, delivery or enforceability
of this Pooling and Servicing Agreement or the ability of the Servicer to
service the Mortgage Loans or to perform any of its other obligations
hereunder in accordance with the terms hereof;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Pooling and Servicing Agreement or the consummation by the Servicer of the
transactions contemplated by this Pooling and Servicing Agreement, except
for such consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date; and
(7) The Servicer covenants that its computer and other systems
used in servicing the Mortgage Loans operate in a manner such that the
Servicer can service the Mortgage Loans in accordance with the terms of
this Pooling and Servicing Agreement.
II-2
SCHEDULE III
CDC Mortgage Capital Inc. hereby makes the representations and
warranties set forth in this Schedule III to the Depositor, the Class A
Certificate Insurer and the Trustee, as of the Closing Date.
(a) DUE ORGANIZATION AND AUTHORITY. The Unaffiliated Seller is a corporation
duly organized, validly existing and in good standing under the laws of
the state of New York and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good
standing in each state wherein it owns or leases any material properties
or where a Mortgaged Property is located, if the laws of such state
require licensing or qualification in order to conduct business of the
type conducted by the Unaffiliated Seller, and in any event the
Unaffiliated Seller is in compliance with the laws of any such state to
the extent necessary; the Unaffiliated Seller has the full corporate
power, authority and legal right to execute and deliver this Agreement and
to perform its obligations hereunder; the execution, delivery and
performance of this Agreement by the Unaffiliated Seller and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement and all agreements contemplated hereby
have been duly executed and delivered and constitute the valid, legal,
binding and enforceable obligations of the Unaffiliated Seller, regardless
of whether such enforcement is sought in a proceeding in equity or at law;
and all requisite corporate action has been taken by the Unaffiliated
Seller to make this Agreement and all agreements contemplated hereby valid
and binding upon the Unaffiliated Seller in accordance with their terms;
(b) NO CONFLICTS. Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor the fulfillment
of or compliance with the terms and conditions of this Agreement, will
conflict with or result in a breach of any of the terms, conditions or
provisions of the Unaffiliated Seller's charter or by-laws or any legal
restriction or any agreement or instrument to which the Unaffiliated
Seller is now a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, except such
unfulfillment, non-compliance or default or acceleration does not in the
aggregate have a material adverse effect on the operation, business,
condition (business or otherwise) of the Unaffiliated Seller or result in
the violation of any law, rule, regulation, order, judgment or decree to
which the Unaffiliated Seller or its property is subject, except such
violation does not in the aggregate have a material adverse effect on the
operation, business, condition (business or otherwise) of the Unaffiliated
Seller or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument;
(c) NO LITIGATION PENDING. There is no action, suit, proceeding or
investigation pending nor, to the Unaffiliated Seller's knowledge,
threatened against the Unaffiliated Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in
the aggregate, may result in any material adverse change in the business,
operations, financial condition, properties
III-1
or assets of the Unaffiliated Seller, or in any material impairment of the
right or ability of the Unaffiliated Seller to carry on its business
substantially as now conducted, or which would draw into question the
validity of this Agreement or of any action taken or to be taken in
connection with the obligations of the Unaffiliated Seller contemplated
herein, or which would be likely to impair materially the ability of the
Unaffiliated Seller to perform under the terms of this Agreement;
(d) NO CONSENT REQUIRED. No consent, approval, authorization or order of, or
registration or filing with, or notice to any court or governmental agency
or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Unaffiliated Seller of or compliance by
the Unaffiliated Seller with this Agreement or the consummation of the
transactions contemplated by this Agreement, or if required, such approval
has been obtained prior to the Closing Date;
III-2
EXHIBIT A
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER ASSETS.
Certificate No. : [A-1/M-1-1/M-2-1/B-1-1/B-2-1]
Cut-off Date : July 1, 2002
First Distribution Date : August 25, 2002
Initial Certificate Balance of this
Certificate ("DENOMINATION") : A $328,101,000
M-1 $27,342,000
M-2 $21,266,000
B-1 $16,810,000
B-2 $6,481,000
Initial Certificate Balances of all
Certificates of this Class : A $328,101,000
M-1 $27,342,000
M-2 $21,266,000
B-1 $16,810,000
B-2 $6,481,000
A-1
CUSIP : A 00000XXX0
M-1 00000XXX0
M-2 12506AM1
B-1 00000XXX0
B-2 00000XXX0
A-2
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
[Class A][Class M-1] [Class M-2][Class B-1][Class B-2]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Unaffiliated Seller, any Originator, the Servicer or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "AGREEMENT") among XXXXXX XXXXXXX ABS CAPITAL
I INC., as depositor (the "DEPOSITOR"), Ocwen Federal Bank FSB, as servicer (the
"SERVICER"), CDC Mortgage Capital Inc., as unaffiliated seller (the
"UNAFFILIATED SELLER") and Deutsche Bank National Trust Company, as trustee (the
"TRUSTEE"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
A-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but solely as Trustee
By:
--------------------------------------------------
Countersigned:
By:
-------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
A-4
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2002-HE2 Mortgage Pass-Through
Certificates, Series 2002-HE2 (herein collectively called the "CERTIFICATES"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Date immediately preceding such Distribution
Date, PROVIDED, HOWEVER, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., as Class A
Certificate Insurer, with the consent of the Holders of Certificates affected by
such amendment evidencing the requisite Percentage Interest, as provided in the
A-5
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Unaffiliated Seller, the Class A
Certificate Insurer and the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and no such party shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Maximum Pool
Principal Balance, the Servicer and/or the Class X Certificateholders will have
the option to repurchase, in whole, from the Trust Fund all remaining Mortgage
Loans and all property acquired in respect of the Mortgage Loans at a purchase
price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:
-------------------------------------------------
Signature by or on behalf of assignor
A-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of______________________________________________________________
account number________________, or, if mailed by check, to _____________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ____________________________________
the assignee named above, or ___________________________________________________
as its agent.
A-8
EXHIBIT B
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER ASSETS.
Certificate No. : [A-IO-1]
Cut-off Date : July 1, 2002
First Distribution Date : August 25, 2002
Initial Notional Balance of this
Certificate ("DENOMINATION") : A-IO $81,012,700
Initial Notional Balances of all
Certificates of this Class : A-IO $81,012,700
CUSIP : A-IO 00000XXX0
B-1
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
[Class A-IO]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
No principal will be paid in respect of this Certificate. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Unaffiliated Seller, any Originator, the
Servicer or the Trustee referred to below or any of their respective affiliates.
Neither this Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "AGREEMENT") among XXXXXX XXXXXXX ABS CAPITAL
I INC., as depositor (the "DEPOSITOR"), Ocwen Federal Bank FSB, as servicer (the
"SERVICER"), CDC Mortgage Capital Inc., as unaffiliated seller (the
"UNAFFILIATED SELLER") and Deutsche Bank National Trust Company, as trustee (the
"TRUSTEE"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
B-2
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but solely as Trustee
By:
--------------------------------------------------
Countersigned:
By:
---------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
B-3
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2002-HE2 Mortgage Pass-Through
Certificates, Series 2002-HE2 (herein collectively called the "CERTIFICATES"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Date immediately preceding such Distribution
Date, PROVIDED, HOWEVER, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., as Class A
Certificate Insurer, with the consent of the Holders of Certificates affected by
such amendment evidencing the requisite Percentage Interest, as provided in the
B-4
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Unaffiliated Seller, the Class A
Certificate Insurer and the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and no such party shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Maximum Pool
Principal Balance, the Servicer and/or the Class X Certificateholders will have
the option to repurchase, in whole, from the Trust Fund all remaining Mortgage
Loans and all property acquired in respect of the Mortgage Loans at a purchase
price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
B-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:
-------------------------------------------------
Signature by or on behalf of assignor
B-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of______________________________________________________________
account number________________, or, if mailed by check, to _____________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ____________________________________
the assignee named above, or ___________________________________________________
as its agent.
B-7
EXHIBIT C
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE TITLE I
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OF A PLAN SUBJECT
TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO APPLICABLE FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF
ERISA OR THE CODE, OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF
SUCH A PLAN, OR A REPRESENTATION OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO
THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF
OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE
CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION LETTER OR THE OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : July 1, 2002
First Distribution Date : August 25, 2002
Percentage Interest of this
Certificate ("DENOMINATION") : 100%
Principal Balance : $100.26
CUSIP : N/A
C-1
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Unaffiliated
Seller, the Servicer or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that __________________, is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "AGREEMENT") among XXXXXX XXXXXXX ABS CAPITAL
I INC., as depositor (the "DEPOSITOR"), Ocwen Federal Bank FSB, as servicer (the
"SERVICER"), CDC Mortgage Capital Inc., as unaffiliated seller (the
"UNAFFILIATED SELLER") and Deutsche Bank National Trust Company, as trustee (the
"TRUSTEE"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purpose, or the office or agency
maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 ACT"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in
C-2
form and substance satisfactory to the Trustee, to the effect that such
transferee is not an employee benefit plan subject to Section 406 of ERISA,
Section 4975 of the Code or Similar Law, or a person acting on behalf of or
investing plan assets of any such plan, which representation letter shall not be
an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
C-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but solely as Trustee
By:
--------------------------------------------------
Countersigned:
By:
---------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
C-4
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2002-HE2 Mortgage Pass-Through
Certificates, Series 2002-HE2 (herein collectively called the "CERTIFICATES"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "DISTRIBUTION Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., as Class A
Certificate Insurer with the consent of the Holders of Certificates affected by
such amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon
C-5
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Unaffiliated Seller, the Class A
Certificate Insurer and the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and no such party shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Maximum Pool
Principal Balance, the Servicer and/or the Class X Certificateholders will have
the option to repurchase, in whole, from the Trust Fund all remaining Mortgage
Loans and all property acquired in respect of the Mortgage Loans at a purchase
price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:
-------------------------------------------------
Signature by or on behalf of assignor
C-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of______________________________________________________________
account number________________, or, if mailed by check, to _____________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ____________________________________
the assignee named above, or ___________________________________________________
as its agent.
C-8
EXHIBIT D
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS (i)
TO A PERMITTED TRANSFEREE AND THE TRANSFER IS MADE IN COMPLIANCE WITH SECTION
5.02(c) OF THE AGREEMENT, AND (ii) THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER
A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A
PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE
TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE
VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : July 1, 2002
First Distribution Date : August 25, 2002
Percentage Interest of this
Certificate ("DENOMINATION") : 100%
CUSIP : N/A
D-1
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
Class R
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, the Unaffiliated Seller or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that CDC Mortgage Capital Inc. is the registered
owner of the Percentage Interest specified above of any monthly distributions
due to the Class R Certificates pursuant to a Pooling and Servicing Agreement
dated as of the Cut-off Date specified above (the "AGREEMENT") among XXXXXX
XXXXXXX ABS CAPITAL I INC., as depositor (the "DEPOSITOR"), Ocwen Federal Bank
FSB, as servicer (the "SERVICER"), CDC Mortgage Capital Inc., as unaffiliated
seller (the "UNAFFILIATED SELLER") and Deutsche Bank National Trust Company, as
trustee (the "TRUSTEE"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in California.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this
D-2
Class R Certificate are expressly subject to the following provisions: (i) each
Person holding or acquiring any Ownership Interest in this Class R Certificate
shall be a Permitted Transferee and shall promptly notify the Trustee of any
change or impending change in its status as a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be registered on the Closing
Date or thereafter transferred, and the Trustee shall not register the Transfer
of this Certificate unless, in addition to the certificates required to be
delivered to the Trustee under Section 5.02(b) of the Agreement, the Trustee
shall have been furnished with a Transfer Affidavit of the initial owner or the
proposed transferee in the form attached as Exhibit H to the Agreement, (iii)
each Person holding or acquiring any Ownership Interest in this Class R
Certificate shall agree (A) to obtain a Transfer Affidavit from any other Person
to whom such Person attempts to Transfer its Ownership Interest this Class R
Certificate, (B) to obtain a Transfer Affidavit from any Person for whom such
Person is acting as nominee, trustee or agent in connection with any Transfer of
this Class R Certificate and (C) not to Transfer the Ownership Interest in this
Class R Certificate or to cause the Transfer of the Ownership Interest in this
Class R Certificate to any other Person if it has actual knowledge that such
Person is not a Permitted Transferee and (iv) any attempted or purported
Transfer of the Ownership Interest in this Class R Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
D-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but solely as Trustee
By:
--------------------------------------------------
Countersigned:
By:
--------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
D-4
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2002-HE2 Mortgage Pass-Through
Certificates, Series 2002-HE2 (herein collectively called the "CERTIFICATES"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., as Class A
Certificate Insurer with the consent of the Holders of Certificates affected by
such amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon
D-5
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in California,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Unaffiliated Seller, the Class A
Certificate Insurer and the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and no such party shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Maximum Pool
Principal Balance, the Servicer and/or the Class X Certificateholder will have
the option to repurchase, in whole, from the Trust Fund all remaining Mortgage
Loans and all property acquired in respect of the Mortgage Loans at a purchase
price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
D-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:
-------------------------------------------------
Signature by or on behalf of assignor
D-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of______________________________________________________________
account number________________, or, if mailed by check, to _____________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ____________________________________
the assignee named above, or ___________________________________________________
as its agent.
D-8
EXHIBIT E
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
EXCEPT AS PROVIDED IN THE POOLING AND SERVICING AGREEMENT, NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE
DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A
PLAN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED
TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA, A
PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN IN
VIOLATION OF THE TRANSFER RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : July 1, 2002
First Distribution Date : August 25, 2002
Percentage Interest of this
Certificate ("DENOMINATION") : 100%
CUSIP : N/A
E-1
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Servicer, the
Unaffiliated Seller or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that _____________________, is the registered owner
of the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "AGREEMENT") among XXXXXX XXXXXXX ABS
CAPITAL I INC., as depositor (the "DEPOSITOR"), Ocwen Federal Bank FSB, as
servicer (the "SERVICER"), CDC Mortgage Capital Inc., as unaffiliated seller
(the "UNAFFILIATED SELLER") and Deutsche Bank National Trust Company, as trustee
(the "TRUSTEE"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Certificate Balance or Pass-Through
Rate and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 ACT"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable
E-2
to and in form and substance satisfactory to the Trustee, to the effect that
such transferee is not an employee benefit plan subject to Section 406 of ERISA
or Section 4975 of the Code or any materially similar provisions of applicable
Federal, state or local law ("SIMILAR LAW") or a person acting on behalf of or
investing plan assets of any such plan, which representation letter shall not be
an expense of the Trustee, or (ii) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting, and the purchaser is an insurance company, a
representation that the purchaser is an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, or (iii) in the
case of a Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, or a plan or arrangement subject to Section 4975
of the Code (or comparable provisions of any subsequent enactments) or a plan
subject to Similar Law, or a trustee of any such plan or any other person acting
on behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee and the Servicer,
which Opinion of Counsel shall not be an expense of the Trustee, the Servicer or
the Trust Fund, addressed to the Trustee, to the effect that the purchase or
holding of such Certificate will not result in the assets of the Trust Fund
being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee or the
Servicer to any obligation in addition to those expressly undertaken in this
Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
E-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but solely as Trustee
By:
--------------------------------------------------
Countersigned:
By:
--------------------------------------
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
E-4
XXXXXX XXXXXXX ABS CAPITAL I INC.
CDC Mortgage Capital Trust 2002-HE2
Mortgage Pass-Through Certificates, Series 2002-HE2
This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2002-HE2 Mortgage Pass-Through
Certificates, Series 2002-HE2 (herein collectively called the "CERTIFICATES"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., as Class A
Certificate Insurer with the consent of the Holders of Certificates affected by
such amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon
E-5
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Unaffiliated Seller, the Class A
Certificate Insurer and the Trustee and any agent of any of them may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and no such party shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Maximum
Principal Balance, the Servicer and/or the Class X Certificateholders will have
the option to repurchase, in whole, from the Trust Fund all remaining Mortgage
Loans and all property acquired in respect of the Mortgage Loans at a purchase
price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
E-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:
-------------------------------------------------
Signature by or on behalf of assignor
E-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of______________________________________________________________
account number________________, or, if mailed by check, to _____________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ____________________________________
the assignee named above, or ___________________________________________________
as its agent.
E-8
EXHIBIT F
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Originator]
_____________________
_____________________
Re: Pooling and Servicing Agreement among XXXXXX XXXXXXX ABS
CAPITAL I INC., as Depositor, Ocwen Federal Bank FSB, as
Servicer, CDC Mortgage Capital Inc., as Unaffiliated Seller
and Deutsche Bank National Trust Company, as Trustee, CDC
Mortgage Capital Trust Series 2002-HE2
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "POOLING AND SERVICING AGREEMENT"), for each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan listed
in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed assignment of the Mortgage.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
F-1
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
----------------------------------
Name:
----------------------------
Title:
----------------------------
F-2
EXHIBIT G
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Originator]
_____________________
_____________________
Re: Pooling and Servicing Agreement among XXXXXX XXXXXXX ABS
CAPITAL I INC., as Depositor, Ocwen Federal Bank FSB, as
Servicer, CDC Mortgage Capital Inc., as Unaffiliated Seller
and Deutsche Bank National Trust Company, as Trustee, CDC
Mortgage Capital Trust Series 2002-HE2
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "POOLING AND SERVICING AGREEMENT"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form
provided in Section 2.01 of the Pooling and Servicing Agreement; or, if
the Unaffiliated Seller has certified or the Trustee otherwise knows that
the related Mortgage has not been returned from the applicable recording
office, a copy of the assignment of the Mortgage (excluding information to
be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from
the originator to the last endorsee.
(v) The original or duplicate lender's title policy and all riders
thereto or, if such original is unavailable, any one of an original title
binder, either an original title
G-1
binder or an original or copy of the title commitment, and if copies then
certified to be true and complete by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2) and (18) of
the Mortgage Loan Schedule and items (1), (9) and (17) of the Data Tape
Information accurately reflects information set forth in the Custodial File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Trustee makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
----------------------------------
Name:
----------------------------
Title:
----------------------------
G-2
EXHIBIT H
TRANSFER AFFIDAVIT
XXXXXX XXXXXXX ABS CAPITAL I INC. Trust 2002-HE2,
Mortgage Pass-Through Certificates,
Series 2002-HE2
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"CERTIFICATE") issued pursuant to the Pooling and Servicing Agreement, (the
"AGREEMENT"), relating to the above-referenced Series, by and among XXXXXX
XXXXXXX ABS CAPITAL I INC., as depositor (the "DEPOSITOR"), Ocwen Federal Bank
FSB, as servicer, CDC Mortgage Capital Inc., as unaffiliated seller (the
"UNAFFILIATED SELLER") and Deutsche Bank National Trust Company, as Trustee.
Capitalized terms used, but not defined herein or in Exhibit 1 hereto, shall
have the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee
for the benefit of the Depositor and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate for its own account. The Transferee
has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
H-1
5. The Transferee has reviewed the provisions of Section 5.02(c)
of the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate, including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "TRANSFEROR CERTIFICATE") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. (1)[The Transferee has computed any consideration paid to it
to acquire the Class [R][LR] Certificate in accordance with proposed U.S.
Treasury Regulations Sections 1.860E-1(a)(4)(iii) and 1.860E-1(c)(5) (or, after
they have been finalized, the final regulations) by computing present values
using a discount rate equal to the applicable Federal rate prescribed by Section
1274(d) of the Code, compounded semi-annually.]
[The Transferee has computed any consideration paid to it to acquire
the Class [R][LR] Certificate in accordance with proposed U.S. Treasury
Regulations Sections 1.860E-1(a)(4)(iii) and 1.860E-1(c)(5) (or, after they have
been finalized, the final regulations) by computing present values using a
discount rate at least equal to the rate at which the Transferee regularly
borrows, in the ordinary course of its trade or business, substantial funds from
----------
(1) Insert appropriate paragraph, if applicable.
H-2
unrelated third parties. The Transferee has provided all information necessary
to demonstrate to the transferor that it regularly borrows at such rate.]
[The transfer of the Class R Certificate complies with Section 6 of
Revenue Procedure 2001-12 (the "REVENUE PROCEDURE"), 2001-3 I.R.B. 335 (January
16, 2001) (or comparable provisions of applicable final U.S. Treasury
Regulations) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in
Section 860L(a)(2) of the Code, as to which income from Class
R Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Investor within the meaning of Section 860L(g)
of the Code) in excess of $100 million and net assets in
excess of $10 million;
(iii) the Transferee will transfer the Class R Certificate only to
another "eligible corporation," as defined in Section
860L(a)(2) of the Code, in a transaction that satisfies the
requirements of Section 4 of the Revenue Procedure; and
(iv) the Transferee determined the consideration paid to it to
acquire the Class R Certificate based on reasonable market
assumptions (including, but not limited to, borrowing and
investment rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Transferee) that it has determined in good faith.]
[Reserved]
12. The Transferee is not an employee benefit plan that is subject
to ERISA or a plan that is subject to Section 4975 of the Code, and the
Transferee is not acting on behalf of or investing plan assets of such a plan.
* * *
H-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this __ day of ________, 20__.
---------------------------------------
Print Name of Transferee
By:
------------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
---------------------------------------
[Assistant] Secretary
Personally appeared before me the above-named_____, known or proved
to me to be the same person who executed the foregoing instrument and to be the
of the Transferee, and acknowledged that he executed the same as his free act
and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this __ day of ________, 20__.
---------------------------------------
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
H-4
EXHIBIT I
FORM OF TRANSFEROR CERTIFICATE
_________, 20__
XXXXXX XXXXXXX ABS CAPITAL I INC.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Deutsche Bank National Trust Company,
as Trustee,
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: CDC Mortgage Capital Trust, Series 2002-HE2, Mortgage
Pass-Through Certificates, Series 2002-HE2, Class ___
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "ACT"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
---------------------------------------
Print Name of Transferor
By:
------------------------------------
Authorized Officer
I-1
EXHIBIT J
FORM OF RULE 144A LETTER
_______, 20__
XXXXXX XXXXXXX ABS CAPITAL I INC.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Deutsche Bank National Trust Company,
as Trustee,
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: CDC Mortgage Capital Trust 2002, Series 2002-HE2, Mortgage
Pass-Through Certificates, Series 2002-HE2, Class
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "ACT"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan or arrangement that is subject to Section 4975 of the Internal Revenue Code
of 1986, as amended, nor are we acting on behalf of any such plan or arrangement
nor using the assets of any such plan or arrangement to effect such acquisition
or, with respect to a Class X Certificate, the purchaser is an insurance company
that is purchasing this certificate with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60,
(e) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from,
J-1
or otherwise approached or negotiated with respect to the Certificates, any
interest in the Certificates or any other similar security with, any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (f) to the extent that the Certificate transferred is a Class X
Certificate, we are a bankruptcy-remote entity and (g) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
J-2
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "BUYER") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("RULE 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $___ in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
_____ CORPORATION, ETC. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
_____ BANK. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
_____ SAVINGS AND LOAN. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
_____ BROKER-DEALER. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
J-3
_____ INSURANCE COMPANY. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
_____ STATE OR LOCAL PLAN. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
_____ ERISA PLAN. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
_____ INVESTMENT ADVISOR. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
_____ SMALL BUSINESS INVESTMENT COMPANY. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
_____ BUSINESS DEVELOPMENT COMPANY. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
J-4
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
---------------------------------------
Print Name of Transferor
By:
------------------------------------
Name:
Title:
Date:
----------------------------------
J-5
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "BUYER") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("RULE 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
_____ The Buyer owned $ ________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
_____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $ ________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
J-6
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
------------------------------------
Print Name of Transferor
By:
---------------------------------
Name:
Title:
IF AN ADVISER:
------------------------------------
Print Name of Buyer
Date:
-------------------------------
J-7
EXHIBIT K
REQUEST FOR RELEASE
(for Trustee)
To: [Address]
Re:
In connection with the administration of the Mortgage Loans held by
you as the Trustee on behalf of the Certificateholders, we request the release,
and acknowledge receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.
MORTGAGOR'S NAME, ADDRESS & ZIP CODE:
MORTGAGE LOAN NUMBER:
SEND CUSTODIAL FILE TO:
REASON FOR REQUESTING DOCUMENTS (CHECK ONE)
_____ 1. Mortgage Loan Paid in Full. (The Company hereby
certifies that all amounts received in connection therewith
have been credited to the Collection Account as provided in
the Pooling and Servicing Agreement.)
_____ 2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of
the Pooling and Servicing Agreement. (The Company hereby
certifies that the repurchase price has been credited to the
Collection Account as provided in the Pooling and Servicing
Agreement.)
_____ 3. Mortgage Loan Liquidated By ____________. (The Company
hereby certifies that all proceeds of foreclosure, insurance,
condemnation or other liquidation have been finally received
and credited to the Collection Account pursuant to the Pooling
and Servicing Agreement.)
_____ 4. Mortgage Loan in Foreclosure.
_____ 5. Other (explain).
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
K-1
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Trustee, please acknowledge your receipt by signing in
the space indicated below, and returning this form.
OCWEN FEDERAL BANK FSB
By:
------------------------------------
Name:
Title:
Date:
K-2
EXHIBIT L
FORM OF SUBSEQUENT TRANSFER AGREEMENT
CDC MORTGAGE CAPITAL TRUST 2002-HE2
Pursuant to separate Mortgage Loan Purchase Agreements, [BNC
Mortgage, Inc. ("BNC"), IMPAC Funding Corporation ("IFC"), People's Choice Home
Loan, Inc. ("PEOPLE'S CHOICE"), Chapel Mortgage Corporation ("CHAPEL MORTGAGE")
and Community Bank of Northern Virginia ("COMMUNITY BANK" and together with BNC,
IFC, Superior and NC Capital, the "ORIGINATORS")] have agreed to sell to CDC
Mortgage Capital Inc. (the "UNAFFILIATED SELLER") certain mortgage loans (each,
a "MORTGAGE LOAN"). These Mortgage Loans may in turn be sold by the Unaffiliated
Seller to XXXXXX XXXXXXX ABS CAPITAL I INC. (the "DEPOSITOR") and then sold by
the Depositor to the CDC Mortgage Capital Trust 0000-XX0 (xxx "XXXXX XXXX"). The
Trust Fund was established pursuant to a Pooling and Servicing Agreement, dated
as of July 1, 2002 (the "POOLING AND SERVICING AGREEMENT") among the
Unaffiliated Seller, the Depositor, Ocwen Federal Bank FSB, as Servicer (the
"SERVICER") and Deutsche Bank National Trust Company, as trustee (the
"TRUSTEE"). The Pooling and Servicing Agreement permits a pre-funding feature,
allowing for the acquisition by the Trust Fund of Subsequent Mortgage Loans
during the Pre-Funding Period. Representations and warranties with respect to
the Mortgage Loans have been made by the Originators pursuant to separate
Assignment and Recognition Agreements.
Capitalized terms used herein and not defined herein have their
respective meanings as set forth in the Pooling and Servicing Agreement.
CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.
The Unaffiliated Seller does hereby irrevocably sell, transfer,
assign, set over and otherwise convey to the Depositor, without recourse (except
as otherwise explicitly provided for herein) all of its right, title and
interest in and to the Subsequent Mortgage Loans, exclusive of the obligations
of the Unaffiliated Seller or any other Person with respect to the Subsequent
Mortgage Loans but including specifically, without limitation, the Mortgages,
the Custodial Files and all other documents, materials and properties
appurtenant thereto and the Mortgage Notes, including all interest and principal
collected by the Unaffiliated Seller on or with respect to the Subsequent
Mortgage Loans after the related Subsequent Cut-off Date, together with all of
its right, title and interest in and to the proceeds received after such
Subsequent Cut-off Date of any related insurance policies on behalf of the
Depositor.
The Depositor does hereby irrevocably sell, transfer, assign, set
over and otherwise convey to the Trust Fund, without recourse (except as
otherwise explicitly provided for herein) all of its right, title and interest
in and to the Subsequent Mortgage Loans, exclusive of the obligations of the
Depositor or any other Person with respect to the Subsequent Mortgage Loans but
including specifically, without limitation, the Mortgages, the Custodial Files
and all other documents, materials and properties appurtenant thereto and the
Mortgage Notes, including all interest and principal collected by the Depositor
on or with respect to the Subsequent Mortgage Loans after the related Subsequent
Cut-off Date, together with all of its right, title and
L-1
interest in and to the proceeds received after such Subsequent Cut-off Date of
any related insurance policies on behalf of the Trust Fund.
The expenses and costs relating to the delivery of the Subsequent
Mortgage Loans specified in this Subsequent Transfer Agreement and the Pooling
and Servicing Agreement shall be borne by the Unaffiliated Seller.
The Unaffiliated Seller hereby affirms the representation and
warranty set forth in Sections 3.01(f) and (h) of the Unaffiliated Seller's
Agreement with respect to the Subsequent Mortgage Loans as of the date hereof.
The Unaffiliated Seller hereby delivers notice and confirms that each of the
conditions set forth in Section 2.01(c) of the Pooling and Servicing Agreement
are satisfied as of the date hereof.
Additional terms of the sale are attached hereto as Attachment A.
To the extent permitted by applicable law, this Subsequent Transfer
Agreement, or a memorandum thereof if permitted under applicable law, is subject
to recordation in all appropriate public offices for real property records in
all counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Unaffiliated Seller's expense, but only when accompanied by an
opinion of counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders or is necessary for
the administration or servicing of the Mortgage Loans.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to the principles of conflicts of laws.
This Agreement may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same Agreement.
All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified, confirmed and incorporated herein; PROVIDED, that in the event
of any conflict the provisions of this Subsequent Transfer Agreement shall
control over the conflicting provisions of the Pooling and Servicing Agreement.
[Remainder of Page Intentionally Left Blank]
L-2
CDC MORTGAGE CAPITAL INC.,
as Unaffiliated Seller
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor
By:
-------------------------------------
Name:
Title:
OCWEN FEDERAL BANK FSB,
as Servicer
By:
-------------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
L-3
