EXCUTION COPY
EXHIBIT 99.2
RECONSTITUTED SERVICING AGREEMENT
THIS RECONSTITUTED SERVICING AGREEMENT (this "Agreement"), entered into
as of the 1st day of November, 2002, by and between XXXXXXX XXXXX MORTGAGE
CAPITAL INC. (the "Seller"), HSBC BANK USA (the "Trustee") and OPTION ONE
MORTGAGE CORPORATION, a California corporation (the "Servicer" or "Option One"),
recites and provides as follows:
RECITALS
WHEREAS, the Seller acquired certain sub-prime residential mortgage
loans from the Servicer pursuant to the Master Mortgage Loan Purchase and
Servicing Agreement among the Seller, the Servicer, Option One Owner Trust
2001-1A, Option One Owner Trust 2001-1B, Option One Owner Trust 2001-2 and
Option One Owner Trust 2002-3, dated as of August 1, 2002 (the "Servicing
Agreement") and attached hereto as Exhibit B.
WHEREAS, the Seller has conveyed the mortgage loans identified on
Exhibit C hereto (the "Serviced Mortgage Loans") to Xxxxxxx Xxxxx Mortgage
Investors, Inc., a Delaware corporation (the "Depositor"), which in turn has
conveyed the Serviced Mortgage Loans to the Trustee, pursuant to a trust
agreement, dated as of November 1, 2002 (the "Trust Agreement"), among the
Trustee, Xxxxx Fargo Bank Minnesota, N.A., as securities administrator (the
"Securities Administrator") and the Depositor.
WHEREAS, the Serviced Mortgage Loans are currently being serviced by
the Servicer pursuant to the Servicing Agreement.
WHEREAS, the Seller desires that the Servicer continue to service the
Serviced Mortgage Loans, and the Servicer has agreed to do so, subject to the
rights of the Seller and the Trustee (at the direction of the Depositor or
certificateholders) to terminate the rights and obligations of the Servicer
hereunder as set forth herein and to the other conditions set forth herein.
WHEREAS, the Seller and the Servicer agree that the provisions of the
Servicing Agreement shall apply to the Serviced Mortgage Loans, except to the
extent otherwise provided herein and that this Agreement shall govern the
Serviced Mortgage Loans for so long as such Serviced Mortgage Loans remain
subject to the provisions of the Trust Agreement.
WHEREAS, the Trustee (at the direction of the NIMs Insurer (as defined
below), the Depositor or the certificateholders) and any successor trustee shall
be obligated to supervise the servicing of the Serviced Mortgage Loans and shall
have the right, at the direction of the NIMs Insurer, Depositor or the
certificateholders (with the consent of the NIMs Insurer), to terminate the
rights and obligations of the Servicer under this Agreement.
WHEREAS, subsequent to the Closing Date, Xxxxxxx Xxxxx Mortgage Capital
Inc. intends to convey all of its rights, title and interest in and to the Class
C and Class P Certificates and the payments and all other proceeds received
thereunder to an owner trust in which it will hold the sole equity interest,
which trust will issue net interest margin securities (the "NIM Securities")
pursuant to an indenture, which NIM Securities will be secured, in part, by
payments on such Classes of the Certificates (the "NIMs Transaction").
WHEREAS, one or more insurers (collectively, the "NIMs Insurer") may
issue one or more insurance policies guaranteeing certain payments under the NIM
Securities to be issued in the NIMs Transaction.
WHEREAS, the Seller and the Servicer intend that the Securities
Administrator and the NIMs Insurer are intended third party beneficiaries of
this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Seller, the Servicer and the
Trustee hereby agree as follows:
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AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
Agreement, including Exhibit A hereto and any provisions of the Servicing
Agreement incorporated by reference herein (regardless if such terms are defined
in the Servicing Agreement), shall have the meanings ascribed to such terms in
the Trust Agreement.
2. Custodianship. The parties hereto acknowledge that Xxxxx Fargo
Bank Minnesota, N.A. will act as custodian (the "Custodian") of the Mortgage
Files for the Trustee pursuant to a Custodial Agreement, dated November 1, 2002,
between the Custodian and the Trustee.
3. Servicing. The Servicer agrees, with respect to the Serviced
Mortgage Loans, to perform and observe the duties, responsibilities and
obligations that are to be performed and observed under the provisions of the
Servicing Agreement, except as otherwise provided herein and on Exhibit A
hereto, and that the provisions of the Servicing Agreement, as so modified, are
and shall be a part of this Agreement to the same extent as if set forth herein
in full.
4. Trust Cut-off Date. The parties hereto acknowledge that by
operation of Sections 11.06 and 11.15 of Exhibit 8 to the Servicing Agreement,
the remittance on December 18, 2002 to the Trust Fund is to include principal
due after November 1, 2002 (the "Trust Cut-off Date") plus interest, at the
Mortgage Loan Remittance Rate collected during the related Due Period exclusive
of any portion thereof allocable to a period prior to the Trust Cut-off Date,
with the adjustments specified in clauses (ii), (iii) and (iv) of Section 11.15
of Exhibit 8 of the Servicing Agreement.
5. Servicing; Termination of Servicer. The Servicer, including
any successor servicer hereunder, shall be subject to the supervision of the
Trustee (at the direction of the Depositor or certificateholders), which Trustee
shall be obligated to ensure that the Servicer services the Serviced Mortgage
Loans in accordance with the provisions of this Agreement. The Trustee, acting
on behalf of the Xxxxxxx Xxxxx Mortgage Investors, Inc. Mortgage Loan
Asset-Backed Certificates, Series 2002-HE1 Trust (the "Trust Fund") created
pursuant to the Trust Agreement, shall have the same rights as the Seller under
the Servicing Agreement to enforce the obligations of the Servicer under the
Servicing Agreement and the term "Purchaser" as used in the Servicing Agreement
in connection with any rights of the Purchaser shall refer to the Trust Fund or,
as the content requires, the Trustee acting in its capacity as agent for the
Trust Fund, except as otherwise specified in Exhibit A hereto. The Trustee (at
the direction of the NIMs Insurer (except in the event of a NIMs Insurer
Default) or at the direction of the Depositor or the certificateholders with the
consent of the NIMs Insurer (except in the event of a NIMs Insurer Default)
shall be entitled to terminate the rights and obligations of the Servicer under
this Agreement upon the failure of the Servicer to perform any of its
obligations under this Agreement, which failure results in an Event of Default
as provided in Section 14 of the Servicing Agreement. Notwithstanding anything
herein to the contrary, in no event shall the Trustee or the Securities
Administrator be required to assume any of obligations of the Seller under the
Servicing Agreement, which obligations shall remain with the Seller, and in
connection with the performance of the Trustee's or the Securities
Administrator's duties hereunder the parties and other signatories hereto agree
that the Trustee and the Securities Administrator shall be entitled to all of
the rights, protections and limitations of liability afforded to the Trustee and
the Securities Administrator under the Trust Agreement.
6. No Representations. Except as described in Exhibit A, the
Servicer shall not be obligated or required to make any representations and
warranties regarding the characteristics of the Serviced Mortgage Loans (other
than those representations and warranties made by the Servicer in Section 7.02
of the Servicing Agreement, which are hereby restated as of the date of this
Agreement) in connection with
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the transactions contemplated by the Trust Agreement and issuance of the
Certificates issued pursuant thereto.
7. Closing. The Servicer hereby acknowledges that on or before
the closing of the transactions contemplated by the Trust Agreement (the
"Closing Date"), the Servicer shall deliver to counsel for the Depositor (i) an
opinion of counsel, a form of which is attached hereto as Exhibit D and (ii) an
officer's certificate, a form of which is attached hereto as Exhibit E.
8. Notices. All notices and communications between or among the
parties hereto (including any third party beneficiary thereof) or required to be
provided to the Trustee or Securities Administrator shall be in writing and
shall be deemed received or given when mailed first-class mail, postage prepaid,
addressed to each other party at its address specified below or, if sent by
facsimile or electronic mail, when facsimile or electronic confirmation of
receipt by the recipient is received by the sender of such notice. Each party
may designate to the other parties in writing, from time to time, other
addresses to which notices and communications hereunder shall be sent.
All notices required to be delivered to the Securities Administrator
under this Agreement shall be delivered to the Securities Administrator at the
following address:
Xxxxx Fargo Bank Minnesota, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Client Manager - MLMI 2002-HE1
Telephone: 000-000-0000
Facsimile: 000-000-0000
All remittances required to be made to the Securities Administrator
under this Agreement shall be made on a scheduled/scheduled to the following
wire account:
Xxxxx Fargo Bank, N.A.
San Francisco, California
ABA# 000-000-000
Account Name: Corporate Trust Clearing,
Account Number: 0000000000
Beneficiary: Xxxxx Fargo Bank Minnesota, N.A.
For further credit to: Account Number 00000000
All notices required to be delivered to the Trustee hereunder shall be
delivered to the Trustee at the following address:
HSBC Bank USA
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Issuer Servicing Department, MLMI 2002-HE1
MLMI 2002-HE1
Telephone: 000-000-0000
Facsimile: 000-000-0000
All notices required to be delivered to the Seller hereunder shall be
delivered to the Seller, at the following address:
Xxxxxxx Xxxxx Mortgage Capital Inc.
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000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset-Backed Finance, Xxxxxxx Xxxxx Mortgage
Investors, Inc.
Mortgage Loan Asset-Backed Certificates, Series 2002-HE1 Trust
Telephone: 000-000-0000
Facsimile: [Number]
All notices required to be delivered to the NIMs Insurer hereunder
shall be delivered to the NIMs Insurer, at the following address:
Radian Insurance Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
All notices required to be delivered to the Servicer hereunder shall be
delivered to its office at the address for notices as set forth in the Servicing
Agreement.
9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, NOTWITHSTANDING
NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all of which counterparts shall together constitute but one and the same
instrument.
11. Credit Risk Manager. The Servicer agrees to enter into a
Credit Risk Management Agreement pursuant to which the mutual agreements of the
Credit Risk Manager and the Servicer shall be set forth.
12. The parties acknowledge that the Original Mortgage Note is
endorsed to "Pay to the order of HSBC Bank USA, as trustee, without recourse."
[SIGNATURE PAGES IMMEDIATELY FOLLOW]
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Executed as of the day and year first above written.
XXXXXXX XXXXX MORTGAGE CAPITAL INC.
as Seller
By: _________________________________
Name: Xxxxxxx X. Xxxx, Xx.
Title: Vice President
OPTION ONE MORTGAGE CORPORATION,
as Servicer
By: _________________________________
Name: Xxxxx X. Xxxxx
Title: Vice President
HSBC BANK USA,
as Trustee
By: _________________________________
Name: Xxxx X. Xxxxx
Title: Vice President
Acknowledged:
XXXXX FARGO BANK MINNESOTA, N.A.,
as Securities Administrator
By: _________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President
EXHIBIT A
Modifications to the Servicing Agreement
1. Unless otherwise specified herein, any provisions of the Servicing
Agreement, including definitions, relating to (i) representations and
warranties of the Purchaser and (ii) Whole Loan Transfers and
Pass-Through Transfers and reconstitutions shall be disregarded for
purposes relating to this Agreement. The exhibits (other than Exhibit 8
as modified herein) to the Servicing Agreement and all references to
such exhibits shall also be disregarded.
2. A new definition of "Prepayment Interest Shortfall Amount" is added to
Article I immediately following the definition of "Prepayment Charge"
to read as follows:
Prepayment Interest Shortfall Amount: With respect to any
Mortgage Loan that was subject to a Principal Prepayment in
full or in part during any Due Period, which Principal
Prepayment was applied to such Mortgage Loan prior to such
Mortgage Loan's Due Date in such Due Period, the amount of
interest (net of the related Servicing Fee for Principal
Prepayments in full only) that would have accrued on the
amount of such Principal Prepayment during the period
commencing on the date as of which such Principal Prepayment
was applied to such Mortgage Loan and ending on the day
immediately preceding such Due Date, inclusive.
3. The definition of "Qualified Substitute Mortgage Loan" is hereby
amended by adding the following two clauses to the end of such
definition:
(v) have a FICO credit score not less than that of the Deleted
Mortgage Loan; and (vi) be subject to a Prepayment Charge at
least equal to the Prepayment Charge of the Deleted Mortgage
Loan, if any.
4. A new definition of "Realized Loss" is added to Article I immediately
following the definition of "Rate/Term Refinancing" to read as follows:
Realized Loss: With respect to each Liquidated Mortgage Loan
(as defined in the Trust Agreement), an amount equal to (i)
the unpaid principal balance of such Mortgage Loan as of the
date of liquidation, minus (ii) Liquidation Proceeds received,
to the extent allocable to principal, net of amounts that are
reimbursable therefrom to Option One with respect to such
Mortgage Loan (other than Monthly Advances of principal)
including expenses of liquidation.
5. The parties acknowledge that Section 4 (Purchase Price) shall be
inapplicable to this Agreement.
6. The parties acknowledge that Section 6.03 (Delivery of Mortgage Loan
Documents) shall be superseded by the provisions of the Custodial
Agreement.
7. A new Section 7.01(a)(xiv) is hereby added as follows: "With respect to
each Mortgage Loan, Option One has fully furnished and shall fully
furnish, on a monthly basis, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information (favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company."
8. A new Section 7.01(a)(xv) is hereby added as follows: "As of the
Closing Date, Option One has serviced the Mortgage Loans in accordance
with the terms of the Servicing Agreement, provided
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accurate statements to the Seller pursuant to the Servicing Agreement,
and otherwise complied with all of its covenants and obligations under
the Servicing Agreement. Option One has taken no action and has not
omitted to take any required action the omission of which would have
the effect of impairing any mortgage insurance or guarantee on any
Mortgage Loans."
9. A new Section 7.02(xlvii) is hereby added as follows: "No proceeds from
any Mortgage Loan were used to finance single-premium credit insurance
policies."
10. A new Section 7.02(xlviii) is hereby added as follows: "As of the
Closing Date, each Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G of the Code and Treas. Reg. Section 1.860G-2."
11. A new Section 7.02(xlix) is hereby added as follows: "As of the Closing
Date, no Mortgage Loan is in foreclosure."
12. A new Section 7.02(l) is hereby added as follows: "As of the Closing
Date, no Mortgage Loan has requested relief under the Soldiers' and
Sailors' Relief Act of 1940, as amended or any similar state law."
13. Section 7.03(li) is hereby added as follows:
The information set forth in the Mortgage Loan
Schedule is complete, true and correct in all material
respects at the date or dates respecting with such information
is furnished and each prepayment charge is permissible and
enforceable in accordance with its terms upon the Mortgagor's
full and voluntary Principal Prepayment (except to the extent
that: (1) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally; (2) the
collectability thereof may be limited due to acceleration in
connection with a foreclosure or other involuntary prepayment;
or (3) subsequent changes in applicable law may limit or
prohibit enforceability thereof) under applicable law.
14. Section 7.03 is hereby amended and restated in entirety as follows:
It is understood and agreed that except as provided
herein no representations and warranties set forth in Section
7.01 shall be brought down to the Closing Date (other than
Sections 7.01(a)(xiv) and 7.01(a)(xv)). Upon discovery by any
Option One, the NIMs Insurer, the Securities Administrator or
the Trustee of a breach of any of the foregoing
representations and warranties which materially and adversely
affects the ability of Option One to perform its duties and
obligations under this Agreement or otherwise materially and
adversely affects the value of the Mortgage Loans, the
Mortgaged Property or the priority of the security interest on
such Mortgaged Property or the interest of the Trustee or the
Trust Fund, the party discovering such breach shall give
prompt written notice to the others.
Within 60 days of the earlier of either discovery by
or notice to Option One of any breach of a representation or
warranty set forth in Section 7.01 which materially and
adversely affects the ability of Option One to perform its
duties and obligations under this Agreement or otherwise
materially and adversely affects the value of the Loans, the
Mortgaged Property or the priority of the security interest on
such Mortgaged Property, Option One shall use its best efforts
promptly to cure such breach in all material respects and, if
such breach cannot be cured, Option One shall, at the
Trustee's option, assign Option One's rights and obligations
under this Agreement (or respecting the affected
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Loans) to a successor Servicer selected by the Trustee with the prior
consent and approval of the Depositor and the NIMs Insurer. Such
assignment shall be made in accordance with Section 24.
In addition, Option One shall indemnify (from its own
funds) the Trustee, the Trust Fund, the NIMs Insurer, the PMI
Insurer and the Securities Administrator and hold each of them
harmless against any costs resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting
from, a breach of Option One's representations and warranties
contained in this Agreement. It is understood and agreed that
the remedies set forth in this Section 7.03 constitute the
sole remedies of the Securities Administrator, the NIMs
Insurer, the PMI Insurer, the Trust Fund and the Trustee
respecting a breach of the foregoing representations and
warranties. The foregoing shall not limit, however, any
remedies available to the Securities Administrator, the
Trustee, the NIMs Insurer, the PMI Insurer or the Trust Fund
available pursuant to any other agreement related hereto as to
the insurance policy pursuant to which the NIMs securities are
insured.
Any cause of action against Option One relating to or
arising out of the breach of any representations and
warranties made in Section 7.01 shall accrue upon (i)
discovery of such breach by Option One or notice thereof by
the Trustee, the NIMs Insurer or the Securities Administrator
to Option One, (ii) failure by Option One to cure such breach
within the applicable cure period, and (iii) demand upon
Option One by the Trustee, the NIMs Insurer or the Securities
Administrator for compliance with this Agreement.
In addition, the representations and warranties
contained in Sections 7.02(iii) (excluding the following
language "and there has been no delinquency, exclusive of any
period of grace, in any payment by the Mortgagor thereunder
during the last twelve months"), 7.02(iv), 7.02(v), 7.02(vi),
7.02(vii), 7.02(ix), 7.02(x), 7.02(xi), 7.02(xv) (provided,
however, Xxxxxxx Xxxxx Mortgage Capital Inc. shall be excluded
as a party), 7.02(xvi), 7.02(xvii), 7.02(xviii), 7.02(xxii),
7.02(xxiii), 7.02(xxviii), 7.02(xxxii), 7.02(xxxiv),
7.02(xxxv), 7.02(xxxvi), 7.02(xlii), 7.02(xlvii),
7.02(xlviii), 7.02(xlix) and 7.02(l) shall be brought down to
the Closing Date. The representations and warranties contained
in Section 7.02 shall inure to the benefit of the Trustee, the
NIMs Insurer, the PMI Insurer, the Trust Fund and the
Securities Administrator, and the remedy available to such
parties for breach of such representations and warranties is
identical to the remedy set forth in Section 7.03 of the
Servicing Agreement prior to its amendment and restatement in
the Reconstituted Servicing Agreement.
15. Section 11.01 of Exhibit 8 (Option One to Act as Servicer) is hereby
amended as follows:
(i) by deleting the second paragraph and replacing it
with the following four paragraphs:
Consistent with the terms of this Agreement, the Servicer may
waive, modify or vary any term of any Mortgage Loan or consent
to the postponement of any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's reasonable
and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the
Purchaser or the NIMs Insurer and with the written notice of
such modification to the NIMs Insurer, provided, however, that
unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgement of the
Servicer, imminent, the Servicer shall not permit any
modification with respect to any
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Mortgage Loan that would change the Mortgage Interest Rate,
forgive the payment of principal or interest, reduce or
increase the outstanding principal balance (except for actual
payments of principal) or change the final maturity date on
such Mortgage Loan.
Within fifteen (15) days of the Closing Date, the Trustee
shall execute, at the written request of the Servicer, and
furnish to the Servicer any special or limited powers of
attorney for each county in which a Mortgaged Property is
located and other documents necessary or appropriate to enable
the Servicer to carry out their servicing and administrative
duties hereunder; provided, such limited powers of attorney or
other documents shall be prepared by the Servicer and
submitted to the Trustee for execution. The Trustee shall not
be liable for the actions of the Servicer under such powers of
attorney.
Promptly after the execution of any assumption, modification,
consolidation or extension of any Mortgage Loan, the Servicer
shall forward to the Custodian and the NIMs Insurer copies of
any documents evidencing such assumption, modification,
consolidation or extension. Notwithstanding anything to the
contrary contained in this Agreement, the Servicer shall not
make or permit any modification, waiver or amendment of any
term of any Mortgage Loan that would cause any REMIC created
under the Trust Agreement to fail to qualify as a REMIC or
result in the imposition of any tax under Section 860F(a) or
Section 860G(d) of the Code.
Notwithstanding anything to the contrary elsewhere in this
Agreement, the Servicer shall not agree to any modification or
assumption of a PMI Mortgage Loan or take any other action
with respect to a PMI Mortgage Loan that could result in a
limitation, qualification or denial of coverage under the PMI
Policy with respect to any PMI Mortgage Loan. The Servicer
shall notify the PMI Insurer that the Trustee, on behalf of
the Certificateholders, is the Owner, as that term is defined
in the PMI Policy, of each PMI Mortgage Loan. The Servicer
shall, on behalf of the Trustee, prepare and file on a timely
basis with the PMI Insurer, with a copy to the Securities
Administrator and the NIMs Insurer, all claims which may be
made under the PMI Policy with respect to the PMI Mortgage
Loans. Consistent with all rights and obligations hereunder,
the Servicer shall take all actions required under the PMI
Policy as a condition to the payment of any such claim. Any
amount received from the PMI Insurer with respect to any such
PMI Mortgage Loan shall be deposited by the Servicer, no later
than two Business Days following receipt thereof, into the
Custodial Account. The Servicer shall service the PMI Mortgage
Loans in accordance with the PMI Policy which is attached
hereto as Exhibit F.
(ii) Notwithstanding anything to the contrary herein,
subclause (i) of the third paragraph of Section 11.01 (prior
to the amendment pursuant hereto) shall be amended by adding
the following to the end of such subclause: ", and such waiver
is standard and customary in servicing similar Mortgage Loans
and such waiver relates to a default or a reasonably
foreseeable default" and subclause (ii) of the third paragraph
of Section 11.01 (prior to the amendment pursuant hereto)
shall be amended by deleting the phrase "; or (B) the
enforceability is otherwise limited or prohibited by
applicable law."
(iii) The following language is hereby added at the end of
Section 11.01:
Notwithstanding anything to the contrary elsewhere in this
Agreement, Option One shall deposit the full amount of any
Prepayment Charge that is identified on the Mortgage Loan
Schedule or any data file containing Mortgage Loan data that
has been provided to the NIMs Insurer into the Custodial
Account at the time the related Principal Prepayment
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is deposited therein if and to the extent: (1) a Mortgage Loan
which is identified on the Mortgage Loan Schedule or data file
as having a Prepayment Charge prepays regardless of whether
the actual Prepayment Charge is lower than described in the
Mortgage Loan Schedule or data file or is not a contractual
obligation of the borrower on the Mortgage Note; and (2) if
the Company waives such Prepayment Charge other than as
permitted in the third paragraph of Section 11.01 (prior to
the amendment pursuant hereto, except as amended by the
immediately preceding clause (ii)).
16. Section 11.03 of Exhibit 8 (Realization Upon Defaulted Mortgage Loans)
is hereby amended by (i) "ninety (90)" with "120" in the fifth line
from the bottom of subsection (a); and (ii) deleting the second to last
sentence of subsection (a) in its entirety.
17. Section 11.04 is deleted in its entirety.
18. Section 11.05 of Exhibit 8 (Establishment of Custodial Accounts;
Deposits to Custodial Accounts) is hereby amended as follows:
(a) add the following sentence at the end of Subsection
11.05(a): "Option One shall give notice to the NIMs
Insurer of the location of the Custodial Account
maintained by it when established and prior to any
change thereof;"
(b) adding the following parenthetical at the end of
subclause (i) in Subsection 11.05(a): (including
amounts in respect Prepayment Charges paid by a
borrower or Option One on or before the Servicer
Remittance Date pursuant to Section 11.01);
(c) restating the proviso in Subsection 11.05(b)(xi) as
follows: "The amount of any Prepayment Interest
Shortfall Amount paid out of Option One's own funds
without any right to reimburse therefore; provided,
however, that in no event shall the aggregate of
deposits made by Option One pursuant to this clause
(xi) exceed the aggregate amount of Option One
servicing compensation in the calendar month in which
such deposits are required; provided, further the
aggregate of deposits made by Option One pursuant to
this clause (xi) shall not include shortfalls of
interest as a result of the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended; and
(d) the words "Option One Mortgage Corporation, as
servicer, in trust for the Purchaser" in the ninth
and tenth lines of Subsection 11.05(c) shall be
replaced by the following: "Option One Mortgage
Corporation, as servicer, in trust for Xxxxxxx Xxxxx
Mortgage Investors, Inc. Mortgage Loan Asset-Backed
Certificates, Series 2002-HE1 Trust." and the words
"24 hours of deposit in the Payment Clearing Account"
shall be replaced with "as soon as possible, and in
any event within 48 hours upon receipt of available
funds."
19. Section 11.06 of Exhibit 8 (Withdrawals From Custodial Accounts) is
hereby amended by:
(i) replacing the words "Purchaser" through "Loans" in the last four
lines of subclause (ii) of such Section with the following:
the Trust Fund; provided however, that in the event
that Option One determines in good faith that any unreimbursed
Monthly Advances will not be recoverable from amounts
representing late recoveries of payments of principal or
interest respecting the
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particular Mortgage Loan as to which such Monthly Advance was
made or from Liquidation Proceeds, Insurance Proceeds or
condemnation proceeds with respect to such Mortgage Loan,
Option One may reimburse itself for such amounts from the
Custodial Account, it being understood, in the case of any
such reimbursement, that Option One's right thereto shall be
prior to the rights of the Trust Fund;
(ii) replacing the words "Purchaser" through "Loans" in the last four
lines of subclause (iii) of such Section with the following:
the Trust Fund; provided however, that in the event that
Option One determines in good faith that any unreimbursed Servicing
Advances will not be recoverable from amounts representing late
recoveries of payments of principal or interest respecting the
particular Mortgage Loan as to which such Servicing Advance was made or
from Liquidation Proceeds, Insurance Proceeds or condemnation proceeds
with respect to such Mortgage Loan, Option One may reimburse itself for
such amounts from the Custodial Account, it being understood, in the
case of any such reimbursement, that Option One's right thereto shall
be prior to the rights of the Trust Fund;
20. Section 11.07 of Exhibit 8 (Establishment of Escrow Accounts; Deposits
to Escrow Accounts) shall be amended by deleting the words "Option One
Mortgage Corporation, as servicer, in trust for the Purchaser and
various Mortgagors, Fixed and Adjustable Rate Mortgage Loans" in the
eight and ninth lines of the Subsection (c), and replacing it with the
following: "Option One Mortgage Corporation, as servicer, in trust for
Xxxxxxx Xxxxx Mortgage Investors, Inc. Mortgage Loan Asset-Backed
Certificates, Series 2002-HE1 Trust."
21. Section 11.11 (Maintenance of Hazard Insurance) is hereby amended and
restated in its entirety as follows:
Section 11.11 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.
(a) The Servicer shall cause to be maintained for each
Mortgage Loan hazard insurance with extended coverage on the Mortgaged
Property in an amount which is at least equal to the lesser of (i) the
current Principal Balance of such Mortgage Loan and (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, 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 hazard 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. 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 Custodial Account, subject to withdrawal pursuant
to Section 11.06. Any cost incurred by the Servicer in maintaining any
such insurance shall not, for the purpose of calculating distributions
to Certificateholders, 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
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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 B:III
or better in Best's Key Rating Guide (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
11.11, 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 11.11, 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 and Certificateholders, 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 Mae 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 provide the Trustee and the NIMS Insurer, upon
request, with copies of such insurance policies and fidelity bond. The
Servicer shall also maintain a fidelity bond in the form and amount
that would meet the requirements of Xxxxxx Xxx or Xxxxxxx Mac, unless
the Servicer has obtained a waiver of such requirements from Xxxxxx Mae
or Xxxxxxx Mac. 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 and the NIMS Insurer. The Servicer shall also
cause each Sub-Servicer to maintain a policy of insurance covering
errors and omissions and a fidelity bond which would meet such
requirements.
22. Section 11.13 (Maintenance of Fidelity Bond, Errors and Omissions
Insurance) is hereby amended by adding the following sentence at the
end of such Section:
The Servicer shall provide the Trustee, the Securities
Administrator and the NIMs Insurer (upon such party's
reasonable request) with copies of any such insurance policies
and fidelity bond.
23. Section 11.14 of Exhibit 8 (Title, Management and Disposition of REO
Property) is hereby amended by
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(i) restating the fifth sentence of the second paragraph as follows:
Such reports shall be retained by the Servicers and versions thereof
shall be forwarded by Option One to the Trustee and the NIMs Insurer
upon reasonable request.
(ii) adding two new paragraphs after the second paragraph thereof to
read as follows:
In the event that the Trust Fund acquires any REO
Property in connection with a default or imminent default on a
Mortgage Loan, Option One shall dispose of such REO Property
not later than the end of the third taxable year after the
year of its acquisition by the Trust Fund unless Option One
has applied for and received a grant of extension from the
Internal Revenue Service to the effect that, under the REMIC
Provisions and any relevant proposed legislation and under
applicable state law, the applicable Trust REMIC may hold REO
Property for a longer period without adversely affecting the
REMIC status of such REMIC or causing the imposition of a
federal or state tax upon such REMIC. If Option One has
received such an extension, then Option One shall continue to
attempt to sell the REO Property for its fair market value for
such period longer than three years as such extension permits
(the "Extended Period"). If Option One has not received such
an extension and Option One is unable to sell the REO Property
within the period ending 3 months before the end of such third
taxable year after its acquisition by the Trust Fund or if
Option One has received such an extension, and Option One is
unable to sell the REO Property within the period ending three
months before the close of the Extended Period, Option One
shall, before the end of the three year period or the Extended
Period, as applicable, (i) purchase such REO Property at a
price equal to the REO Property's fair market value or (ii)
auction the REO Property to the highest bidder (which may be
Option One) in an auction reasonably designed to produce a
fair price prior to the expiration of the three-year period or
the Extended Period, as the case may be. The Trustee shall
sign any document or take any other action reasonably
requested by Option One which would enable Option One, on
behalf of the Trust Fund, to request such grant of extension.
Notwithstanding any other provisions of this
Agreement, no REO Property acquired by the Trust Fund shall be
rented (or allowed to continue to be rented) or otherwise used
by or on behalf of the Trust Fund in such a manner or pursuant
to any terms that would: (i) cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code; or (ii) subject any Trust
REMIC to the imposition of any federal income taxes on the
income earned from such REO Property, including any taxes
imposed by reason of Sections 860F or 860G(c) of the Code,
unless Option One has agreed to indemnify and hold harmless
the Trust Fund with respect to the imposition of any such
taxes and the NIMs Insurer has consented thereto in writing.
and (ii) inserting "and Monthly Advances" after "Servicing Advances" in
the sixth line.
24. Section 11.15 of Exhibit 8 (Distributions) is hereby amended by adding
the following after the second paragraph of such Section:
All remittances required to be made to the Securities
Administrator shall be made to the following wire account or
to such other account as may be specified by the Securities
Administrator from time to time:
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Xxxxx Fargo Bank Minnesota, N.A.
San Francisco, California
ABA# 000-000-000
Account Name: Corporate Trust Clearing,
Account Number: 0000000000
Beneficiary: Xxxxx Fargo Bank Minnesota, N.A.
For further credit to: Account Number 00000000
25. Section 11.16 of Exhibit 8 (Statements to the Purchaser) is hereby
amended in its entirety to read as follows:
Section 11.16 Statements to the Securities Administrator.
Not later than the tenth calendar day of each month,
Option One shall furnish to the Securities Administrator and
the NIMs Insurer an electronic file providing loan level
accounting data for the period ending on the last Business Day
of the preceding month in the format mutually agreed to
between Option One and the Securities Administrator.
Such format shall include the following information
with respect to the PMI Mortgage Loans: the amount of any
claims made under the PMI Policy, the amount of any claims
rejected by the PMI Insurer, the amount of any claims paid by
the PMI Insurer pursuant to the PMI Policy with respect to
principal, the amount of any claims paid by the PMI Insurer
pursuant to the PMI Policy with respect to interest, and the
number and aggregate stated principal balance of the Mortgage
Loans covered by the PMI Policy as of the end of the related
Due Period.
26. Section 11.17 (Statements to the Purchaser) is hereby amended by (i)
adding ", the Trustee, the Securities Administrator and the NIMs
Insurer" after the word "Purchaser" in the first line of the first
paragraph of such Section; (ii) adding ", the Trustee, the Securities
Administrator or the NIMs Insurer" after the word "Purchaser" in the
last line of the first paragraph of such Section; (iii) adding ", the
Trustee, the Securities Administrator and the NIMs Insurer" after the
word "Purchaser" in the second line of the second paragraph of such
Section; and (iv) adding ", the Trustee, the Securities Administrator
and the NIMs Insurer" after the word "Purchaser" in the first line of
the fourth paragraph of such Section.
27. Section 11.19 (Foreclosure Reports) is hereby amended by (i) adding ",
the Trustee, the Securities Administrator and the NIMs Insurer" after
the second appearance of the word "Purchaser" in the second line of
such Section and (ii) deliver such reports to The Murrayhill Company in
accordance with standard reporting procedures mutually agreed upon
between Option One and The Murrayhill Company.
28. Section 11.22 of Exhibit 8 (Monthly Advances by Option One) is hereby
amended by replacing the words "Purchaser" with the words "NIMs
Insurer" in the last sentence of such Section.
29. Section 11.25 (Statement as to Compliance) is hereby amended by (i)
replacing "not later than ninety (90) days following the end of each
fiscal year of Option One" in the first and second lines of such
Section with "by the end of February 28th of each year" and (ii) adding
", the Trustee, the Securities Administrator and the NIMs Insurer"
after the word "Purchaser" in the first line of such Section.
30. Section 11.26 (Independent Public Accountants' Servicing Report) is
hereby amended by (i) replacing "Not later than ninety (90) days
following the end of each fiscal year of Option One" in
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the first line of such Section with "By the end of February 28th of
each year" and (ii) adding ", the Trustee, the Securities Administrator
and the NIMs Insurer" after the word "Purchaser" in the fourth line and
in the last line of such Section.
31. Section 13.04 (Sellers Not to Resign) is hereby amended and restated as
follows:
Option One shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of Option One, the Trustee, the
Securities Administrator and the NIMs Insurer or upon the determination
that its duties hereunder are no longer permissible under applicable
law and such incapacity cannot be cured by Option One. Any such
determination permitting the resignation of Option One shall be
evidenced by an Opinion of Counsel to such effect delivered to the
Trustee, the Securities Administrator and the NIMs Insurer which
Opinion of Counsel shall be in form and substance acceptable to the
Trustee, the Securities Administrator and the NIMs Insurer. No such
resignation shall become effective until a successor acceptable to the
NIMs Insurer shall have assumed Option One's responsibilities and
obligations hereunder in the manner provided in Section 16.
32. Section 13.05 (No Transfer of Servicing) is hereby amended as follows:
(i) deleting the second sentence of such Section and restating it as
follows: "No Seller shall assign this Agreement and Option One shall
not assign the servicing hereunder or delegate its rights or duties
hereunder or any portion thereof, or sell or otherwise dispose of all
or substantially all of its property or assets, without the prior
written approval of the Purchaser, the PMI Insurer and the NIMs
Insurer, which consent will not be unreasonably withheld."
(ii) adding the following at the end of such Section: "Without in any
way limiting the generality of this Section 13.05, in the event that
that Option One either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any
portion thereof or sell or otherwise dispose of all or substantially
all of its property or assets, without the prior written consent of the
Trustee, the Securities Administrator, the PMI Insurer and the NIMs
Insurer, then the Trustee, the Securities Administrator or the PMI
Insurer (in any case with the prior written consent of the NIMs
Insurer) or the NIMs Insurer, shall have the right to terminate Option
One as Servicer under this Agreement upon notice given as set forth in
Section 14.01, without any payment of any penalty or damages and
without any liability whatsoever to Option One or any third party."
33. Section 14.01 (Events of Default) is hereby amended by:
(a) each of the Securities Administrator, the NIMs
Insurer, the Depositor or the holders of certificates
evidencing greater than 50% of each class of
Certificates shall also have the right to give notice
of default in such Section;
(b) replacing subclause (vii) with the following
paragraph: "the Servicer at any time is neither a
Xxxxxx Xxx nor Xxxxxxx Mac approved servicer, and the
Trustee has not terminated the rights and obligations
of the Servicer under this Agreement and replaced
Option One with a Xxxxxx Mae or Xxxxxxx Mac approved
servicer within 30 days of the absence of such
approval; or"; and
(c) replacing the last paragraph with the following
paragraph:
If an Event of Default shall occur with
respect to the Servicer, then, and in each and every
such case, so long as such Event of Default shall not
have been
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remedied, the Trustee may, or at the direction of the
NIMs Insurer or the certificateholders evidencing
greater than 50% of the Voting Rights evidenced by
the Certificates with the consent of the NIMs
Insurer, shall, by notice in writing to the Servicer
(with a copy to the NIMs Insurer and 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. On
or 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
Securities Administrator. The Securities
Administrator 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
prior to termination pursuant to this Agreement. The
Servicer agrees to cooperate with the Trustee in
effecting the termination of the Servicer's
responsibilities and rights hereunder. The Servicer
and the Trustee shall promptly notify the Rating
Agencies and the NIMs Insurer of the occurrence of an
Event of Default or an event that, with notice,
passage of time, other action or any combination of
the foregoing would be an Event of Default, such
notice to be provided in any event within two
Business Days of such occurrence.
34. Section 14.02 (Waiver of Defaults) is hereby amended by changing the
reference to "Purchaser" to "the Trustee with the prior written consent
of the NIMs Insurer."
35. Section 15 (Termination) is hereby amended by restating in its entirety
as follows:
(a) This Agreement shall terminate upon either: (i) the
later of the final payment or liquidation with
respect to the last Mortgage Loan (or advances of the
same by Option One) or the disposition of all
property acquired upon foreclosures or deed in lieu
of foreclosure with respect to the last Mortgage Loan
and the remittance of the all funds due hereunder; or
(ii) by mutual consent of Option One and the Trustee
in writing, provided such termination is also
acceptable to the Depositor, the NIMs Insurer and the
Rating Agencies, and provided that no successor
servicer has been appointed
(b) Xxxxxxx Xxxxx Mortgage Capital Inc (with the prior
consent of the Securities Administrator, the Trustee
and the NIMs Insurer), at its sole option, may
terminate Option One as servicer of any Mortgage Loan
under this Agreement, without cause, pursuant to this
Section 15(b); provided, that the termination of
Option One shall not be effective until a successor
servicer acceptable to the NIMs Insurer shall have
assumed the responsibilities, duties and obligations
of Option One; provided, further, that no successor
servicer shall be appointed unless such successor
shall be qualified to service mortgage loans on
behalf of Xxxxxx Xxx or Xxxxxxx Mac and the
appointment of such successor servicer shall not
result in a qualification, withdrawal or downgrade of
the then-current rating of any of the Certificates by
any Rating Agency, as evidenced by a letter from each
Rating Agency. Any such notice of termination shall
be in writing and
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delivered to Option One by registered mail as
provided in Section 19. The termination fee for the
termination of servicing without cause pursuant to
this Section 15(b)for each Mortgage Loan for which
servicing is being terminated shall be equal to (i)
the product of 1.00% and the Stated Principal Balance
of the Mortgage Loans as to which Option One is
terminated during the thirty-six month period
following the related Closing Date for such Mortgage
Loans, (ii) the product of 0.75% and the Stated
Principal Balance of the Mortgage Loans as to which
Option One is terminated during the following
thirty-six month period, and (iii) the product of
0.25% and the Stated Principal Balance of the
Mortgage Loans terminated more than seventy-two
months following the related Closing Date.
At the time of any termination of Option One pursuant
to Section 15, Option One shall be entitled to all accrued and
unpaid Servicing Fees and unreimbursed Servicing Advances and
Monthly Advances; provided, however, in the event of an event
of default under Section 14.01 or termination with cause under
Section 15(b) hereof, such unreimbursed amounts (other than
with respect to Monthly Advances) shall not be reimbursed to
Option One until such amounts are received by the Trust Fund
from the related Mortgage Loans.
36. Section 16 (Successor to the Seller) is hereby amended in its entirety
to read as follows:
Simultaneously with the termination of the Option
One's responsibilities and duties under this Agreement
pursuant to Sections 12, 13,14 or 15, the Securities
Administrator shall, in accordance with the provisions of the
Trust Agreement (i) succeed to and assume all of Option One's
responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor meeting the eligibility
requirements of this Agreement, and which shall succeed to all
rights and assume all of the responsibilities, duties and
liabilities of Option One under this Agreement with the
termination of Option One's responsibilities, duties and
liabilities under this Agreement. After Option One receives a
notice of termination, the Securities Administrator may, if it
shall be unwilling to act as Servicer, or shall, if it is
unable to so act or if it is prohibited by law from making
advances with respect to delinquent Mortgage Loans, or if the
NIMs Insurer so requests in writing to the Securities
Administrator, promptly appoint, or petition a court of
competent jurisdiction to appoint, an established mortgage
loan servicing institution acceptable to each Rating Agency,
having a net worth of not less than $15,000,000 and reasonably
acceptable to the NIMs Insurer, as the successor to the
Servicer under this Agreement in the assumption of all or any
part of the responsibilities, duties and obligations of the
Servicer under this Agreement. Any successor to Option One
that is not at that time a Servicer of other mortgage loans
for the Trust Fund shall be subject to the approval of the
Trustee, the Seller, the NIMs Insurer and each Rating Agency
(as such term is defined in the Trust Agreement). Unless the
successor servicer is at that time a servicer of other
mortgage loans for the Trust Fund, each Rating Agency must
deliver to the Trustee and the NIMs Insurer a letter to the
effect that such transfer of servicing will not result in a
qualification, withdrawal or downgrade of the then-current
rating of any of the Certificates. In connection with such
appointment and assumption, the Trustee or the Seller, as
applicable, may make such arrangements for the compensation of
such successor out of payments on the Mortgage Loans as it and
such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted Option One
under this Agreement. In the event that Option One's duties,
responsibilities and liabilities under this Agreement should
be terminated pursuant to the
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aforementioned sections, Option One shall discharge such
duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective
date thereof with the same degree of diligence and prudence
which it is obligated to exercise under this Agreement, and
shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The
resignation or removal of Option One pursuant to the
aforementioned sections shall not become effective until a
successor reasonably acceptable to the NIMs Insurer shall be
appointed pursuant to this Section 16 and shall in no event
relieve Option One of the representations and warranties made
pursuant to Sections 7.01 and 7.02 and the remedies available
to the Trust Fund under Section 7.03 shall be applicable to
Option One notwithstanding any such resignation or termination
of Option One, or the termination of this Agreement.
Within a reasonable period of time, but in no event
longer than 60 days of the appointment of a successor entity,
Option One shall prepare, execute and deliver to the successor
entity any and all documents and other instruments, place in
such successor's possession all Servicing Files, and do or
cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of
termination. The Servicer shall cooperate with the Securities
Administrator, the Trustee and such successor, as applicable,
in effecting the termination of Option One's responsibilities
and rights hereunder and the transfer of servicing
responsibilities to the successor Servicer, including without
limitation, the transfer to such successor for administration
by it of all cash amounts which shall at the time be credited
by Option One to the Account or any Escrow Account or
thereafter received with respect to the Mortgage Loans.
Any successor appointed as provided herein shall
execute, acknowledge and deliver to the Trustee and Option One
an instrument (i) accepting such appointment, wherein the
successor shall make an assumption of the due and punctual
performance and observance of each covenant and condition to
be performed and observed by Option One under this Agreement,
whereupon such successor shall become fully vested with all
the rights, powers, duties, responsibilities, obligations and
liabilities of Option One, with like effect as if originally
named as a party to this Agreement. Any termination or
resignation of Option One or termination of this Agreement
pursuant to Sections 12, 13,14 or 15 shall not affect any
claims that the Trustee may have against Option One arising
out of Option One's actions or failure to act prior to any
such termination or resignation.
The Servicer shall deliver, within five (5) Business
Days of the appointment of a successor Servicer, the funds in
the Custodial Account and Escrow Account and all Collateral
Files, Credit Files and related documents and statements held
by it hereunder to the successor Servicer and Option One shall
account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be
required to more fully and definitively vest in the successor
all such rights, powers, duties, responsibilities, obligations
and liabilities of Option One.
Upon a successor's acceptance of appointment as such,
Option One shall notify the Trustee and the NIMs Insurer of
such appointment in accordance with the notice procedures set
forth herein.
Except as otherwise provided in this Agreement, all
reasonable costs and expenses incurred in connection with any
transfer of servicing hereunder (whether as a result of
termination or removal of Option One or resignation of Option
One or
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otherwise), including, without limitation, the costs and
expenses of the Securities Administrator, the Trustee or any
other Person in appointing a successor servicer, or of the
Securities Administrator, the Trustee in assuming the
responsibilities of Option One hereunder, or of transferring
the Servicing Files and the other necessary data to the
successor servicer shall be paid by the terminated Servicer
from its own funds without reimbursement in the event that the
Servicer is terminated for cause.
37. Section 25 (Waivers, Modifications and Amendment) is hereby amended by
replacing the words "by the party against whom such waiver,
modification and amendment is sought to be enforced" with "written
agreement by the Servicer and the Seller, with the written consent of
the Trustee and the NIMs Insurer; provided, either (i) the party
requesting the waiver, modification and amendment provide, at its sole
expense, an opinion of counsel that such waiver, modification and
amendment will not have a material adverse affect on the Trust Fund or
(ii) each Rating Agency provide notice that such waiver, modification
and amendment would not result in a withdraw or reduction of the rating
of the Certificates by such Rating Agency."
38. Section 27 (Nonsoliciation) is hereby amended by replacing the words
"the Purchaser" with "Xxxxxxx Xxxxx Mortgage Capital Inc." in each
instance.
39. A new Section 34 (Indemnification; Third Party Claims) is hereby added
to read as follows:
The Servicer shall indemnify the Seller, the Trust Fund, the
Trustee, the Depositor, the NIMs Insurer, the PMI Insurer and
the Securities Administrator and hold each of them harmless
against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related
costs, judgements, and any other costs, fees and expenses that
any of such parties may sustain in any way related to the
failure of Option One to perform its duties and service the
Mortgage Loans in strict compliance with the terms of this
Agreement. The Servicer immediately shall notify the Seller,
the Depositor, the NIMs Insurer, the Securities Administrator
and the Trustee or any other relevant party if a claim is made
by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of the
indemnified party, which consent shall not be unreasonably
withheld or delayed) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgement or decree
which may be entered against it or any of such parties in
respect of such claim. The Servicer shall follow any written
instructions received from the Trustee and the NIMs Insurer in
connection with such claim. The Servicer shall provide the
Trustee, the NIMs Insurer, the PMI Insurer and the Securities
Administrator with a written report of all expenses and
advances incurred by Option One pursuant to this Section 33,
and the Securities Administrator from the assets of the Trust
Fund promptly shall reimburse Option One for all amounts
advanced by it pursuant to the preceding sentence except when
the claim in any way relates to the failure of Option One to
service and administer the Mortgage Loans in material
compliance with the terms of this Agreement or the gross
negligence, bad faith or willful misconduct of this Servicer.
40. A new Section 34 (Intended Third Party Beneficiaries) is hereby added
to read as follows:
Notwithstanding any provision herein to the contrary,
the parties to this Agreement agree that it is appropriate, in
furtherance of the intent of such parties as set forth herein,
that the Securities Administrator and the NIMs Insurer receive
the benefit of the provisions of this Agreement as intended
third party beneficiaries of this Agreement to the extent of
such provisions. Option One shall have the same obligations to
the Securities Administrator and the NIMs Insurer as if they
were parties to this Agreement,
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and the Securities Administrator and the NIMs Insurer shall
have the same rights and remedies to enforce the provisions
of this Agreement as if they were parties to this Agreement.
Notwithstanding the foregoing, all rights and obligations of
the Securities Administrator and the NIMs Insurer hereunder
(other than the right to indemnification and reimbursement)
shall terminate upon termination of the Trust Agreement and
of the Trust Fund pursuant to the Trust Agreement.
41. A new Section 35 (Officer's Certificate) is hereby added to read as
follows:
(a) By February 28th of each year, or at any other time upon
thirty (30) days written request, an officer of the Servicer shall execute and
deliver an Officer's Certificate in the form of Exhibit G attached hereto,
signed by the senior officer in charge of servicing of the Servicer or any
officer to whom that officer reports, to the NIMs Insurer and the Securities
Administrator and Depositor for the benefit of such Securities Administrator and
its officers, directors and affiliates, certifying as to the following matters:
(1) I have reviewed the information required to be delivered
to the Securities Administrator pursuant to the Servicing Agreement
(the "Servicing Information").
(2) Based on my knowledge, the information in the Annual
Statement of Compliance, and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans submitted to the Securities Administrator by the
Servicer taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period
covered by the Annual Statement of Compliance;
(3) Based on my knowledge, the Servicing Information required
to be provided to the Securities Administrator by the Servicer under
this Agreement has been provided to the Securities Administrator;
(4) I am responsible for reviewing the activities performed by
the Servicer under this Agreement and based upon the review required
hereunder, and except as disclosed in the Annual Statement of
Compliance, the Annual Independent Certified Public Accountant's
Servicing Report and all servicing reports, officer's certificates and
other information relating to the servicing of the Mortgage Loans
submitted to the Securities Administrator by the Servicer, the Servicer
has, as of the last day of the period covered by the Annual Statement
of Compliance fulfilled its obligations under this Agreement; and
(5) I have disclosed to the Securities Administrator all
significant deficiencies relating to the Servicer's compliance with the
minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage
Bankers as set forth in this Agreement.
(b) The Servicer shall indemnify and hold harmless the Securities
Administrator and the Depositor and their respective officers, directors, agents
and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments and other costs
and expenses arising out of or based upon a breach by the Servicer or any of its
officers, directors, agents or affiliates of its obligations under this Section
35, any material misstatement or omission in the Officer's Certificate required
under this Section or the negligence, bad faith or willful misconduct of the
A-15
Servicer in connection therewith. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Securities Administrator and
the Depositor, then the Servicer agrees that it shall contribute to the amount
paid or payable by the Securities Administrator and the Depositor as a result of
the losses, claims, damages or liabilities of the Securities Administrator and
the Depositor in such proportion as is appropriate to reflect the relative fault
of the Securities Administrator and the Depositor on the one hand and the
Servicer on the other in connection with a breach of the Servicer's obligations
under this Section 35, any material misstatement or omission in the Officer's
Certificate required under this Section or the Servicer's negligence, bad faith
or willful misconduct in connection therewith.
42. A new Section 36 (Advance Facility) is hereby added to read as follows:
The Trustee on behalf of the Trust Fund, with the consent of the
Servicer and the NIMs Insurer, is hereby authorized to enter into a
facility with any Person which provides that such Person (an "Advancing
Person") may make all or a portion of the Advances and/or Servicing
Advances to the Trust Fund under this Agreement, although no such
facility shall reduce or otherwise affect the Servicer's obligation to
fund such Advances and/or Servicing Advances. To the extent that an
Advancing Person makes all or a portion of any Advance or any Servicing
Advance and provides the Trustee with notice acknowledged by the
Servicer that such Advancing Person is entitled to reimbursement, such
Advancing Person shall be entitled to receive reimbursement pursuant to
this Agreement for such amount to the extent provided in herein. Such
notice from the Advancing Person must specify the amount of the
reimbursement and must specify which Section of this Agreement permits
the applicable Advance or Servicing Advance to be reimbursed. The
Trustee shall be entitled to rely without independent investigation on
the Advancing Person's statement with respect to the amount of any
reimbursement pursuant to this Section 36 and with respect to the
Advancing Person's statement with respect to the Section of this
Agreement that permits the applicable Advance or Servicing Advance to
be reimbursed. An Advancing Person whose obligations are limited to the
making of Advances and/or Servicing Advances shall not be required to
meet the qualifications of a Servicer or a Sub-Servicer herein and will
not be deemed to be a Servicer under this Agreement. If the terms of a
facility proposed to be entered into with an Advancing Person by the
Trust Fund would not materially and adversely affect the interests of
any Certificateholder, then the NIMs Insurer shall not withhold its
consent to the Trust Fund's entering such facility; provided that the
NIMs Insurer shall be notified of the terms in order to determine
whether there would be such a material adverse effect. (b) If an
advancing facility is entered into, then the Servicer shall not be
permitted to reimburse itself therefor under Section 11.06 prior to the
remittance to the Trust Fund, but instead the Servicer shall include
such amounts in the applicable remittance to the Trustee made pursuant
to Section 11.05(b). The Trustee is hereby authorized to pay to the
Advancing Person, reimbursements for Advances and Servicing Advances
from the Distribution Account to the same extent the Servicer would
have been permitted to reimburse itself for such Advances and/or
Servicing Advances in accordance with Section 11.06, as the case may
be, had the Servicer itself funded such Advance or Servicing Advance.
The Trust Fund, the Trustee, the Depositor and the Securities
Administrator shall have no obligation to pay the Advancing Person any
fees as servicing compensation or otherwise. All Advances and Servicing
Advances made pursuant to the terms of this Agreement shall be deemed
made and shall be reimbursed on a "first in-first out" (FIFO) basis.
43. Item (18) in Exhibit 5 is hereby added to read as follows:
(18) The original policy of title insurance, including riders and
endorsements thereto, or if the policy has not yet been issued, a
written commitment letter or interim binder or preliminary report of
tile issued by the title insurance or escrow company.
A-16
EXHIBIT B
Servicing Agreement
[See Exhibit #99.4]
B-1
EXHIBIT C
Schedule of Serviced Mortgage Loans
[INTENTIONALLY OMITTED]
C-1
EXHIBIT D
Form of Opinion of Counsel
December 6, 2002
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx and Xxxxx Incorporated
000 Xxxxx Xxxxxx
4 World Financial Center, 10th Floor
New York, New York 10080
Xxxxxxx Xxxxx Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: Xxxxxxx Xxxxx Mortgage Investors, Inc. Mortgage Loan Asset-Backed
Certificates, Series 2002-HE1 Trust
Dear Sir/Madam:
I am [General Counsel] of [Option One Mortgage Corporation or Firm Name] and
have acted as counsel to Option One Mortgage Corporation (the "Company"), with
respect to certain matters in connection with the securitization of Mortgage
Loans by Xxxxxxx Xxxxx Investors, Inc., that certain Reconstituted Servicing
Agreement, dated as of November 1, 2002 (the "Agreement"), by and among the
Company, Xxxxxxx Xxxxx Mortgage Capital Inc. and HSBC Bank USA.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreement. I have
assumed the authenticity of all documents submitted to me as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based upon the foregoing, it is my opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the state of [Name of State].
2. The Company has the power to engage in the transactions contemplated by
the Agreement and all requisite power, authority and legal right to
execute and deliver the Agreement, and to perform and observe the terms
and conditions of the Agreement.
3. Each person who, as an officer or attorney-in-fact of the Company,
signed (a) the Agreement, and (b) any other document delivered prior
hereto or on the date hereof in connection with the sale, servicing and
securitization of the Mortgage Loans was, at the respective times of
such signing and delivery, and is, as of the date hereof, duly elected
or appointed, qualified and acting and as such officer or
attorney-in-fact, and the signatures of such persons appearing on such
documents are their genuine signatures
4. The Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement enforceable in
accordance with its terms, subject to bankruptcy laws and other similar
laws of general application affecting rights of creditors and subject
to the application of the rules of equity, including those respecting
the availability of specific performance.
5. Either (a) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Agreement, or the consummation of the transactions contemplated by the
Agreement; or (b) any required consent, approval, authorization or
order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Agreement, will conflict with or
results in or will result in a breach of or constitutes or will
constitute a default under the charter or by-laws of the Company, the
terms of any indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is subject,
or violates any statute or order, rule, regulations, writ, injunction
or decree of any court, governmental authority or regulatory body to
which the Company is subject or by which it is bound.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Sincerely,
D-1
EXHIBIT E
OFFICER'S CERTIFICATE
OF
[INSERT COMPANY NAME]
The undersigned Officer of Option One Mortgage Corporation (the "Company")
hereby certifies as follows:
1. Attached hereto as Exhibit A is a true and correct copy of certain
resolutions duly adopted by the Board of Directors of the Company, which
resolutions have not been in any way amended, annulled, rescinded or
revoked and are now in full force and effect.
2. Attached hereto as Exhibit B is a true and complete copy of the Certificate
of Incorporation of the Company, as amended, as filed with the Secretary of
State of the State of [INSERT STATE]. Such Certificate of Incorporation has
not been amended and is in full force and effect on the date hereof.
3. Attached hereto as Exhibit C is a true and complete copy of the By-Laws of
the Company Such By-Laws have not been amended or revoked and are in full
force and effect on the date hereof.
4. Attached hereto as Exhibit D is a true and correct copy of the Certificate
of the Secretary of State of the State of [INSERT STATE] as to the good
standing of the Company.
5. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Reconstituted Servicing Agreement (the "Agreement"), dated as of November
1, 2002 among the Company, as servicer, Xxxxxxx Xxxxx Mortgage Capital Inc.
and HSBC Bank USA, or the transactions contemplated by the Agreement; or
(ii) any required consent, approval, authorization or order has been
obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Agreement conflicts or will conflict with
or results or will result in a breach of or constitutes or will constitute
a default under the Certificate of Incorporation or By-Laws of the Company,
the terms of any indenture or other agreement or instrument to which the
Company is a party or by which it is found or to which it is subject, or
any statute or order, rule, regulations, writ, injunction or decree of any
court, governmental authority or regulatory body to which the Company is
subject or by which it is bound.
E-1
7. There is no action, suit, proceeding or investigation pending or, to the
best of my knowledge, threatened against the Company which, in my judgment,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties
or assets of the Company or in any material impairment of the right or
ability of the Company to carry on its business substantially as now
conducted or in any material liability on the part of the Company or which
would draw into question the validity of the Agreement, or of any action
taken or to be taken in connections with the transactions contemplated
hereby, or which would be likely to impair materially the ability of the
Company to perform under the terms of the Agreement.
8. The representations and warranties of the Company set forth in the
Agreement are true and correct as of the date or dates referred to in such
Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this 6th day of December, 2002
__________________________________
Name:
Title:
E-2
EXHIBIT F
PMI POLICY
[INTENTIONALLY OMITTED]
E-3
EXHIBIT G
SEC CERTIFICATION
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
4 World Financial Center, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank Minnesota, N.A.
0000 Xxx Xxxxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager - MLMI Series 2002-HE1
Re: Xxxxxxx Xxxxx Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates, Series 2002-HE1
Reference is made to the Reconstituted Servicing Agreement, dated as of November
1, 2002 (the "Agreement"), by and among Xxxxxxx Xxxxx Mortgage Investors, Inc.,
as depositor, Option One Mortgage Corporation, as servicer (the "Servicer") and
HSBC Bank USA, as trustee. I, [identify the certifying individual], a [title] of
the Servicer hereby certify to the Securities Administrator and the Depositor,
and its officers, directors and affiliates, and with the knowledge and intent
that they will rely upon this certification, that:
1. I have reviewed the information required to be delivered to the Securities
Administrator pursuant to the Servicing Agreement (the "Servicing
Information").
2. Based on my knowledge, the information in the Annual Statement of
Compliance, and all servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans submitted to
the Securities Administrator by the Servicer taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading as of the last day of
the period covered by the Annual Statement of Compliance;
3. Based on my knowledge, the Servicing Information required to be provided to
the Securities Administrator by the Servicer under this Agreement has been
provided to the Securities Administrator;
4. I am responsible for reviewing the activities performed by the Servicer
under this Agreement and based upon the review required hereunder, and
except as disclosed in the Annual Statement of Compliance, the Annual
Independent Certified Public Accountant's Servicing Report and all
servicing reports, officer's certificates and other information relating to
the servicing of the Mortgage Loans submitted to the Securities
Administrator by the Servicer, the Servicer has, as of the last day of the
period covered by the Annual Statement of Compliance fulfilled its
obligations under this Agreement; and
5. I have disclosed to the Securities Administrator all significant
deficiencies relating to the Servicer's compliance with the minimum
servicing standards in accordance with a review conducted in compliance
with the Uniform Single Attestation Program for Mortgage Bankers as set
forth in this Agreement.
Date:
G-1
Option One Mortgage Corporation, as Servicer
By: _____________________________
Name: _____________________________
Title: _____________________________
G-2
