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Popular ABS, Inc.
Depositor
Equity One, Inc., a Delaware corporation
The Servicer
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and
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Sellers
and
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Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of ________________, 20__
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MORTGAGE PASS-THROUGH CERTIFICATES, SERIES []-[]
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT.............................................................................................1
ARTICLE I DEFINITIONS............................................................................................5
60+ DAY DELINQUENT LOAN.......................................................................................5
ADJUSTED MORTGAGE RATE........................................................................................5
ADJUSTED NET MORTGAGE RATE....................................................................................5
ADVANCE.......................................................................................................5
AGGREGATE CLASS [] EARLY DISTRIBUTION AMOUNT..................................................................5
AGREEMENT.....................................................................................................5
AMOUNT HELD FOR FUTURE DISTRIBUTION...........................................................................5
APPLIED REALIZED LOSS AMOUNT..................................................................................5
AVAILABLE FUNDS...............................................................................................6
BALLOON LOANS.................................................................................................6
BANKRUPTCY CODE...............................................................................................6
BASIC PRINCIPAL DISTRIBUTION AMOUNT...........................................................................6
BENEFICIAL OWNER..............................................................................................6
BOOK-ENTRY CERTIFICATES.......................................................................................6
BUSINESS DAY..................................................................................................6
CAP AGREEMENT.................................................................................................6
CAP CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT.............................................................6
CAP CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT.............................................................7
CAP CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT.............................................................7
CAP CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT.............................................................7
CAP CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT.............................................................7
CAP CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT.............................................................7
CAP CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT.............................................................7
CAP CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT.............................................................7
CAP CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT.............................................................7
CAP DISTRIBUTION AMOUNT.......................................................................................8
CAP EXTRA PRINCIPAL DISTRIBUTION AMOUNT.......................................................................8
CAP NOTIONAL BALANCE..........................................................................................8
CAP RESERVE FUND..............................................................................................8
CAP STATED TERMINATION........................................................................................8
CAP UNPAID REALIZED LOSS AMOUNT...............................................................................8
CERTIFICATES..................................................................................................8
CERTIFICATE ACCOUNT...........................................................................................8
CERTIFICATE BALANCE...........................................................................................8
CERTIFICATEHOLDER OR HOLDER...................................................................................8
CERTIFICATE REGISTER..........................................................................................9
CERTIFICATE REGISTRAR.........................................................................................9
CLASS.........................................................................................................9
CLASS []-[] CERTIFICATE.......................................................................................9
CLASS []-[] CERTIFICATE.......................................................................................9
CLASS []-[] CERTIFICATE.......................................................................................9
CLASS []-[] CERTIFICATE.......................................................................................9
CLASS []-[] APPLIED REALIZED LOSS AMOUNT......................................................................9
CLASS []-[] CERTIFICATE.......................................................................................9
CLASS []-[] PRINCIPAL DISTRIBUTION AMOUNT.....................................................................9
i
CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT................................................................10
CLASS []-[] APPLIED REALIZED LOSS AMOUNT.....................................................................10
CLASS []-[] CERTIFICATE......................................................................................10
CLASS []-[] PRINCIPAL DISTRIBUTION AMOUNT....................................................................10
CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT................................................................11
CLASS []-[] APPLIED REALIZED LOSS AMOUNT.....................................................................11
CLASS []-[] CERTIFICATE......................................................................................11
CLASS []-[] PRINCIPAL DISTRIBUTION AMOUNT....................................................................11
CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT................................................................11
CLASS CERTIFICATE BALANCE....................................................................................12
CLASS INTEREST SHORTFALL.....................................................................................12
CLASS []-[] APPLIED REALIZED LOSS AMOUNT.....................................................................12
CLASS []-[] CERTIFICATE......................................................................................12
CLASS []-[] PRINCIPAL DISTRIBUTION AMOUNT....................................................................12
CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT................................................................13
CLASS []-[] APPLIED REALIZED LOSS AMOUNT.....................................................................13
CLASS []-[] CERTIFICATE......................................................................................13
CLASS []-[] PRINCIPAL DISTRIBUTION AMOUNT....................................................................13
CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT................................................................13
CLASS []-[] APPLIED REALIZED LOSS AMOUNT.....................................................................13
CLASS []-[] CERTIFICATE......................................................................................13
CLASS []-[] PRINCIPAL DISTRIBUTION AMOUNT....................................................................14
CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT................................................................14
CLASS []-[] APPLIED REALIZED LOSS AMOUNT.....................................................................14
CLASS []-[] CERTIFICATE......................................................................................14
CLASS []-[] PRINCIPAL DISTRIBUTION AMOUNT....................................................................14
CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT................................................................14
CLASS []-[] APPLIED REALIZED LOSS AMOUNT.....................................................................15
CLASS []-[] CERTIFICATE......................................................................................15
CLASS []-[] PRINCIPAL DISTRIBUTION AMOUNT....................................................................15
CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT................................................................15
CLASS []-[] APPLIED REALIZED LOSS AMOUNT.....................................................................15
CLASS []-[] CERTIFICATE......................................................................................15
CLASS []-[] PRINCIPAL DISTRIBUTION AMOUNT....................................................................16
CLASS []-[] REALIZED LOSS AMORTIZATION AMOUNT................................................................16
CLASS R CERTIFICATES.........................................................................................16
CLASS UNPAID INTEREST AMOUNTS................................................................................16
CLASS X CERTIFICATE..........................................................................................16
CLOSING DATE.................................................................................................16
CLOSING PLACE................................................................................................16
CODE.........................................................................................................16
COLLATERAL...................................................................................................16
COLLATERAL VALUE.............................................................................................17
COMBINED LOAN-TO-VALUE RATIO.................................................................................17
COMMISSION...................................................................................................17
CORPORATE TRUST OFFICE.......................................................................................17
CORRESPONDING CLASS..........................................................................................17
CORRIDOR AGREEMENT...........................................................................................17
CORRIDOR DISTRIBUTION AMOUNT.................................................................................17
CORRIDOR NOTIONAL BALANCE....................................................................................17
CORRIDOR RESERVE FUND........................................................................................17
ii
CORRIDOR STATED TERMINATION..................................................................................18
COUNTERPARTY.................................................................................................18
CUSTODIAL AGREEMENT..........................................................................................18
CUSTODIAN....................................................................................................18
CUT-OFF DATE.................................................................................................18
CUT-OFF DATE POOL PRINCIPAL BALANCE..........................................................................18
CUT-OFF DATE PRINCIPAL BALANCE...............................................................................18
DEFECTIVE LOAN...............................................................................................18
DEFICIENT VALUATION..........................................................................................18
DEFINITIVE CERTIFICATES......................................................................................18
DELETED LOAN.................................................................................................18
DENOMINATION.................................................................................................18
DEPOSITOR....................................................................................................18
DEPOSITORY...................................................................................................19
DEPOSITORY PARTICIPANT.......................................................................................19
DETERMINATION DATE...........................................................................................19
DISTRIBUTION ACCOUNT.........................................................................................19
DISTRIBUTION ACCOUNT DEPOSIT DATE............................................................................19
DISTRIBUTION DATE............................................................................................19
DUE DATE.....................................................................................................19
DUE PERIOD...................................................................................................19
ELIGIBLE ACCOUNT.............................................................................................19
EQUITY ONE-DELAWARE..........................................................................................20
EQUITY ONE-MINNESOTA.........................................................................................20
EQUITY ONE-PENNSYLVANIA......................................................................................20
ERISA........................................................................................................20
ERISA QUALIFYING UNDERWRITING................................................................................20
ERISA-RESTRICTED CERTIFICATE.................................................................................20
ESCROW ACCOUNT...............................................................................................20
EVENT OF DEFAULT.............................................................................................20
EXCESS CASHFLOW REALIZED LOSS AMORTIZATION AMOUNT............................................................20
EXCHANGE ACT.................................................................................................20
EXCESS PROCEEDS..............................................................................................21
EXPENSE RATE.................................................................................................21
EXTRA PRINCIPAL DISTRIBUTION AMOUNT..........................................................................21
FDIC.........................................................................................................21
FHLMC........................................................................................................21
FIRREA.......................................................................................................21
FNMA.........................................................................................................21
INDIRECT PARTICIPANT.........................................................................................21
INITIAL CERTIFICATE ACCOUNT DEPOSIT..........................................................................21
INSURANCE POLICY.............................................................................................21
INSURANCE PROCEEDS...........................................................................................21
INSURED EXPENSES.............................................................................................22
INTEREST ACCRUAL PERIOD......................................................................................22
INTEREST DISTRIBUTION AMOUNT.................................................................................22
INTEREST REMITTANCE AMOUNT...................................................................................22
INVESTMENT LETTER............................................................................................22
LATEST POSSIBLE MATURITY DATE................................................................................22
LAST SCHEDULED DISTRIBUTION DATE.............................................................................22
LIBOR........................................................................................................22
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LIBOR DETERMINATION DATE.....................................................................................23
LIQUIDATED LOAN..............................................................................................23
LIQUIDATION PROCEEDS.........................................................................................23
LOANS........................................................................................................23
LOAN SCHEDULE................................................................................................23
MAJORITY IN INTEREST.........................................................................................24
MASTER AGREEMENT.............................................................................................24
MERS (R).....................................................................................................24
MERS (R) SYSTEM..............................................................................................24
MIN..........................................................................................................24
MOM LOAN.....................................................................................................24
MONTHLY EXCESS CASHFLOW AMOUNT...............................................................................24
MONTHLY EXCESS INTEREST AMOUNT...............................................................................24
MONTHLY STATEMENT............................................................................................24
XXXXX'X......................................................................................................24
MORTGAGE.....................................................................................................24
MORTGAGED PROPERTY...........................................................................................25
MORTGAGE FILE................................................................................................25
MORTGAGE NOTE................................................................................................25
MORTGAGE RATE................................................................................................25
MORTGAGOR....................................................................................................25
NET PREPAYMENT INTEREST SHORTFALLS...........................................................................25
NET REALIZED LOSSES..........................................................................................25
NET RECOVERY REALIZED LOSSES.................................................................................25
NET WAC CAP..................................................................................................25
NET WAC CAP ACCOUNT..........................................................................................25
NET WAC CAP CARRYOVER........................................................................................25
NET WAC RATE.................................................................................................26
NONRECOVERABLE ADVANCE.......................................................................................26
NOTICE OF FINAL DISTRIBUTION.................................................................................26
OFFERED CERTIFICATES.........................................................................................26
OFFICER'S CERTIFICATE........................................................................................26
OPINION OF COUNSEL...........................................................................................26
OPTIONAL TERMINATION DATE....................................................................................26
OPTIONAL TERMINATION.........................................................................................26
ORIGINAL LOAN................................................................................................26
OTS..........................................................................................................27
OUTSTANDING..................................................................................................27
OUTSTANDING LOAN.............................................................................................27
OVERCOLLATERALIZATION AMOUNT.................................................................................27
OVERCOLLATERALIZATION DEFICIENCY.............................................................................27
OVERCOLLATERALIZATION RELEASE AMOUNT.........................................................................27
OWNERSHIP INTEREST...........................................................................................27
PASS-THROUGH RATE............................................................................................27
PAYING AGENT.................................................................................................27
PERCENTAGE INTEREST..........................................................................................28
PERMITTED INVESTMENTS........................................................................................28
PERMITTED TRANSFEREE.........................................................................................29
PERSON.......................................................................................................29
PLAN.........................................................................................................29
POOL PRINCIPAL BALANCE.......................................................................................29
iv
POPULAR FINANCIAL............................................................................................29
POPULAR FUNDING..............................................................................................29
PRELIMINARY PROSPECTUS SUPPLEMENT............................................................................30
POST-STEPDOWN REMAINING PRINCIPAL DISTRIBUTION AMOUNT........................................................30
PRE-STEPDOWN REMAINING PRINCIPAL DISTRIBUTION AMOUNT.........................................................30
PREPAYMENT INTEREST EXCESS...................................................................................30
PREPAYMENT INTEREST SHORTFALL................................................................................30
PREPAYMENT PERIOD............................................................................................30
PRIMARY MORTGAGE INSURANCE POLICY............................................................................30
PRINCIPAL DISTRIBUTION AMOUNT................................................................................30
PRINCIPAL PREPAYMENT.........................................................................................30
PRINCIPAL PREPAYMENT IN FULL.................................................................................30
PRINCIPAL REMITTANCE AMOUNT..................................................................................30
PROSPECTUS SUPPLEMENT........................................................................................31
PUBLICLY OFFERED CERTIFICATES................................................................................31
PURCHASE PRICE...............................................................................................31
PTCE 95-60...................................................................................................31
RATING AGENCY................................................................................................31
REALIZED LOSS AMOUNT.........................................................................................31
REALIZED LOSSES..............................................................................................31
REALIZED LOSS AMORTIZATION AMOUNT............................................................................32
RECORD DATE..................................................................................................32
REFERENCE BANKS..............................................................................................32
REGULATION AB................................................................................................32
REFINANCE LOAN...............................................................................................32
RELIEF ACT...................................................................................................32
RELIEF ACT REDUCTIONS........................................................................................32
REMAINING EXCESS INTEREST AMOUNT.............................................................................33
REMAINING INTEREST REMITTANCE AMOUNT.........................................................................33
REMAINING OVERCOLLATERALIZATION RELEASE AMOUNT...............................................................33
REMAINING PRINCIPAL DISTRIBUTION AMOUNT......................................................................33
REMIC........................................................................................................33
REMIC 1......................................................................................................33
REMIC 2......................................................................................................33
REMIC 1 ACCRUAL CLASS........................................................................................33
REMIC CHANGE OF LAW..........................................................................................33
REMIC PROVISIONS.............................................................................................33
REO PROPERTY.................................................................................................34
REQUEST FOR RELEASE..........................................................................................34
REQUIRED INSURANCE POLICY....................................................................................34
RESPONSIBLE OFFICER..........................................................................................34
RULE 144A LETTER.............................................................................................34
SCHEDULED PAYMENT............................................................................................34
SECOND LIEN LOAN.............................................................................................34
SECURITIES ACT...............................................................................................34
SELLERS......................................................................................................34
SENIOR CERTIFICATES..........................................................................................34
SENIOR ENHANCEMENT PERCENTAGE................................................................................34
SENIOR PRINCIPAL DISTRIBUTION AMOUNT.........................................................................34
SENIOR SPECIFIED ENHANCEMENT PERCENTAGE......................................................................35
SERVICER.....................................................................................................35
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SERVICER ADVANCE DATE........................................................................................35
SERVICING ADVANCES...........................................................................................35
SERVICING AMOUNT.............................................................................................35
SERVICING CRITERIA...........................................................................................35
SERVICING FEE................................................................................................35
SERVICING FEE RATE...........................................................................................35
SERVICING OFFICER............................................................................................35
S&P..........................................................................................................36
STARTUP DAY..................................................................................................36
STATED PRINCIPAL BALANCE.....................................................................................36
STEPDOWN DATE................................................................................................36
SUBORDINATE CERTIFICATES.....................................................................................36
SUBSERVICER..................................................................................................36
SUBSTITUTE LOAN..............................................................................................36
SUBSTITUTION ADJUSTMENT AMOUNT...............................................................................36
TARGETED OVERCOLLATERALIZATION AMOUNT........................................................................36
TAX MATTERS PERSON...........................................................................................37
TAX MATTERS PERSON CERTIFICATE...............................................................................37
TERMINATION PRICE............................................................................................37
TRANSFER.....................................................................................................37
TRANSFER AFFIDAVIT...........................................................................................37
TRANSFEROR CERTIFICATE.......................................................................................37
TRIGGER EVENT................................................................................................37
TRUSTEE......................................................................................................38
TRUSTEE FEE..................................................................................................38
TRUSTEE FEE RATE.............................................................................................38
TRUST FUND...................................................................................................38
TRUSTEE PERMITTED WITHDRAWAL AMOUNT..........................................................................39
UNPAID REALIZED LOSS AMOUNT..................................................................................39
UNDERWRITER EXEMPTION........................................................................................39
UNDERWRITERS.................................................................................................39
VOTING RIGHTS................................................................................................39
ARTICLE II CONVEYANCE OF LOANS; REPRESENTATIONS AND WARRANTIES...................................................39
SECTION 2.01. CONVEYANCE OF LOANS...........................................................................39
SECTION 2.02. ACCEPTANCE BY TRUSTEE OF THE TRUST FUND.......................................................42
SECTION 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS AND THE SERVICER.....................44
SECTION 2.03A. ADDITIONAL OBLIGATIONS OF EQUITY ONE-DELAWARE................................................46
SECTION 2.04. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AS TO THE LOANS...............................47
SECTION 2.05. DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH SUBSTITUTIONS...............................47
SECTION 2.06. EXECUTION AND DELIVERY OF CERTIFICATES........................................................47
SECTION 2.07. REMIC MATTERS.................................................................................47
SECTION 2.08. COVENANTS OF THE SERVICER.....................................................................48
ARTICLE III ADMINISTRATION AND SERVICING OF LOANS................................................................48
SECTION 3.01. SERVICER TO SERVICE LOANS.....................................................................48
SECTION 3.02. SUBSERVICING; ENFORCEMENT OF THE OBLIGATIONS OF SERVICERS.....................................49
SECTION 3.03. RIGHTS OF THE DEPOSITOR AND THE TRUSTEE IN RESPECT OF THE SERVICER............................50
SECTION 3.04. TRUSTEE TO ACT AS SERVICER....................................................................50
vi
SECTION 3.05. COLLECTION OF LOAN PAYMENTS; CERTIFICATE ACCOUNT; DISTRIBUTION ACCOUNT........................50
SECTION 3.06. PAYMENT OF TAXES, ASSESSMENTS, HAZARD INSURANCE PREMIUMS AND SIMILAR ITEMS; ESCROW ACCOUNTS...52
SECTION 3.07. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE LOANS...........................53
SECTION 3.08. PERMITTED WITHDRAWALS FROM THE CERTIFICATE ACCOUNT AND DISTRIBUTION ACCOUNT...................53
SECTION 3.09. MAINTENANCE OF HAZARD INSURANCE; MAINTENANCE OF PRIMARY INSURANCE POLICIES....................55
SECTION 3.10. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.....................................56
SECTION 3.11. REALIZATION UPON DEFAULTED LOANS; REPURCHASE AND SALE OF CERTAIN LOANS........................57
SECTION 3.12. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF SERVICER TO BE HELD FOR THE TRUSTEE.............59
SECTION 3.13. SERVICING COMPENSATION........................................................................59
SECTION 3.14. ACCESS TO CERTAIN DOCUMENTATION...............................................................59
SECTION 3.15. ANNUAL STATEMENT AS TO COMPLIANCE.............................................................60
SECTION 3.16. SERVICER'S ANNUAL SERVICING STATEMENT; INDEPENDENT PUBLIC ACCOUNTANTS' ATTESTATION............60
SECTION 3.17. ERRORS AND OMISSIONS INSURANCE; FIDELITY BONDS................................................61
SECTION 3.18. ENGAGEMENT BY SERVICER OF AFFILIATES OR THIRD PARTY VENDORS...................................61
SECTION 3.19. DELINQUENT LOANS..............................................................................61
ARTICLE IIIA RESERVE FUNDS AND net wac cap account..............................................................62
SECTION 3A.01 CAP RESERVE FUND AND CAP AGREEMENT............................................................62
SECTION 3A.02 CORRIDOR RESERVE FUND AND CORRIDOR AGREEMENT..................................................63
SECTION 3A.03. NET WAC CAP ACCOUNT..........................................................................64
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER............................................................65
SECTION 4.01. ADVANCES......................................................................................65
SECTION 4.02. PRIORITIES OF DISTRIBUTION AND ALLOCATION.....................................................65
SECTION 4.02A. RECOVERIES...................................................................................75
SECTION 4.03. MONTHLY STATEMENTS TO CERTIFICATEHOLDERS......................................................76
SECTION 4.04. REPORTING......................................................................................79
SECTION 5.01. THE CERTIFICATES..............................................................................79
SECTION 5.02. CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES...................80
SECTION 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.............................................84
SECTION 5.04. PERSONS DEEMED OWNERS.........................................................................84
SECTION 5.05. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.....................................84
SECTION 5.06. MAINTENANCE OF OFFICE OR AGENCY...............................................................85
ARTICLE VI THE DEPOSITOR AND THE SERVICER........................................................................85
SECTION 6.01. RESPECTIVE LIABILITIES OF THE DEPOSITOR AND THE SERVICER......................................85
SECTION 6.02. MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE SERVICER......................................85
SECTION 6.03. LIMITATION ON LIABILITY OF THE DEPOSITOR, THE SELLERS, THE SERVICER AND OTHERS................85
SECTION 6.04. LIMITATION ON RESIGNATION OF SERVICER.........................................................86
SECTION 6.05. INDEMNIFICATION...............................................................................86
ARTICLE VII DEFAULT..............................................................................................87
vii
SECTION 7.01. EVENTS OF DEFAULT.............................................................................87
SECTION 7.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR......................................................89
SECTION 7.03. NOTIFICATION TO CERTIFICATEHOLDERS............................................................89
SECTION 7.04. SURVIVABILITY OF SERVICER LIABILITIES..........................................................90
ARTICLE VIII CONCERNING THE TRUSTEE.............................................................................90
SECTION 8.01. DUTIES OF TRUSTEE.............................................................................90
SECTION 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE..........................................................91
SECTION 8.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR LOANS..................................................92
SECTION 8.04. TRUSTEE MAY OWN CERTIFICATES..................................................................93
SECTION 8.05. TRUSTEE'S FEES AND EXPENSES...................................................................93
SECTION 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE..........................................................93
SECTION 8.07. RESIGNATION AND REMOVAL OF TRUSTEE............................................................94
SECTION 8.08. SUCCESSOR TRUSTEE.............................................................................94
SECTION 8.09. MERGER OR CONSOLIDATION OF TRUSTEE............................................................95
SECTION 8.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.................................................95
SECTION 8.11. TAX MATTERS...................................................................................96
SECTION 8.12. PERIODIC FILINGS..............................................................................98
SECTION 8.13. APPOINTMENT OF CUSTODIANS.....................................................................98
SECTION 8.14. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF CERTIFICATES.................................98
SECTION 8.15. SUITS FOR ENFORCEMENT.........................................................................99
SECTION 8.16. TRUSTEE'S ANNUAL SERVICING STATEMENT; INDEPENDENT PUBLIC ACCOUNTANTS' ATTESTATION.............99
SECTION 8.17. ENGAGEMENT BY TRUSTEE OF AFFILIATES OR THIRD PARTIES.........................................100
SECTION 8.18. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE................................................100
ARTICLE IX TERMINATION..........................................................................................101
SECTION 9.01. TERMINATION UPON LIQUIDATION OR PURCHASE OF ALL LOANS........................................101
SECTION 9.02. FINAL DISTRIBUTION ON THE CERTIFICATES.......................................................101
SECTION 9.03. ADDITIONAL TERMINATION REQUIREMENTS..........................................................102
ARTICLE X MISCELLANEOUS PROVISIONS..............................................................................103
SECTION 10.01. AMENDMENT...................................................................................103
SECTION 10.02. RECORDATION OF AGREEMENT; COUNTERPARTS......................................................104
SECTION 10.03. GOVERNING LAW...............................................................................104
SECTION 10.04. INTENTION OF PARTIES........................................................................104
SECTION 10.05. NOTICES.....................................................................................106
SECTION 10.06. SEVERABILITY OF PROVISIONS..................................................................107
SECTION 10.07. ASSIGNMENT..................................................................................107
SECTION 10.08. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS..................................................107
SECTION 10.09. INSPECTION AND AUDIT RIGHTS.................................................................108
SECTION 10.10. CERTIFICATES NONASSESSABLE AND FULLY PAID...................................................108
SECTION 10.11. THE CLOSING.................................................................................109
SECTION 10.12. INTERPRETATION..............................................................................109
SECTION 10.13. MATERIAL LITIGATION; AFFILIATIONS...........................................................109
SECTION 10.14. NO PARTNERSHIP..............................................................................109
SECTION 10.15. PROTECTION OF ASSETS.........................................................................109
SECTION 10.16. EXECUTION OF MASTER AGREEMENT................................................................110
SCHEDULE I...............................................................................................S-I-1
viii
SCHEDULE IIA...........................................................................................S-IIA-1
SCHEDULE IIB...........................................................................................S-IIB-1
SCHEDULE IIC...........................................................................................S-IIC-1
SCHEDULE IID...........................................................................................S-IID-1
SCHEDULE IIE...........................................................................................S-IIE-1
SCHEDULE IIF...........................................................................................S-IIF-1
SCHEDULE IIX...........................................................................................S-IIX-1
SCHEDULE IIIA.........................................................................................S-IIIA-1
SCHEDULE IIIB.........................................................................................S-IIIB-1
SCHEDULE IIIC.........................................................................................S-IIIC-1
SCHEDULE IIID.........................................................................................S-IIID-1
SCHEDULE IIIE........................................................................................S-IIIE-1
SCHEDULE IIIF.........................................................................................S-IIIF-1
SCHEDULE IV...............................................................................................IV-1
SCHEDULE V.................................................................................................V-1
SCHEDULE VI...............................................................................................VI-1
SCHEDULE VII.............................................................................................VII-1
EXHIBIT A-1..............................................................................................A-1-1
EXHIBIT A-2..............................................................................................A-2-1
EXHIBIT A-3 .............................................................................................A-3-1
EXHIBIT A-4 .............................................................................................A-4-1
EXHIBIT B-1..............................................................................................B-1-1
EXHIBIT B-2 .............................................................................................B-2-1
EXHIBIT C..................................................................................................C-1
EXHIBIT D..................................................................................................D-1
EXHIBIT E..................................................................................................E-1
ix
EXHIBIT F..................................................................................................F-1
EXHIBIT G..................................................................................................G-1
EXHIBIT H..................................................................................................H-1
EXHIBIT I..................................................................................................I-1
EXHIBIT J..................................................................................................J-1
EXHIBIT K..................................................................................................K-1
EXHIBIT L..................................................................................................L-1
EXHIBIT M..................................................................................................M-1
EXHIBIT N..................................................................................................N-1
x
THIS POOLING AND SERVICING AGREEMENT, dated as of ______________, 20__, by and
among Popular ABS, Inc., a Delaware corporation, as depositor (the "DEPOSITOR"),
Equity One, Inc., a Delaware corporation, as servicer (the "SERVICER"),
__________________, a ______________________, ___________________, a
__________________, ___________________, a ______________________,
___________________, a __________________ and, together with
__________________________, the "SELLERS"), and ____________________, a
________________________________________, as trustee (the "TRUSTEE").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund (exclusive of the Net
WAC Cap Account, the Master Agreement, the Cap Reserve Fund and the Corridor
Reserve Fund) for federal income tax purposes will consist of two REMICs ("REMIC
1" and "REMIC 2"). The Certificates will represent the entire beneficial
ownership interest in the Trust Fund. The assets of the Trust Fund (exclusive of
the Net WAC Cap Account, the Master Agreement, the Cap Reserve Fund and the
Corridor Reserve Fund) will constitute the assets of REMIC 1 and REMIC 1 will
issue fourteen uncertificated regular interests that will be held as the sole
assets of REMIC 2. The Class []-[], Class []-[], Class []-[], Class []-[], Class
[]-[], Class []-[], Class []-[], Class []-[], Class []-[], Class []-[], Class
[]-[], Class []-[] and Class []-[] Certificates (exclusive of any associated
rights to receive payments in the form of Net WAC Cap Carryover) and the Class X
Certificates (exclusive of any associated rights to receive payments from the
Net WAC Cap Account, the Cap Reserve Fund or the Corridor Reserve Fund) will
represent the "regular interests" in REMIC 2. The Class []-[], Class []-[],
Class []-[], Class []-[], Class []-[], Class []-[], Class []-[], Class []-[] and
Class []-[] Certificates are subordinate to and provide credit enhancement for
the Class []-[], Class []-[], Class []-[] and Class []-[] Certificates. The
Class []-[], Class []-[], Class []-[], Class []-[], Class []-[], Class []-[],
Class []-[] and Class []-[] Certificates are subordinate to and provide credit
enhancement for the Class []-[] Certificates. The Class []-[], Class []-[],
Class []-[], Class []-[], Class []-[], Class []-[] and Class []-[] Certificates
are subordinate to and provide credit enhancement for the Class []-[]
Certificates. The Class []-[], Class []-[], Class []-[], Class []-[], Class
[]-[] and Class []-[] Certificates are subordinate to and provide credit
enhancement for the Class []-[] Certificates. The Class []-[], Class []-[],
Class []-[], Class []-[] and Class []-[] Certificates are subordinate to and
provide credit enhancement for the Class []-[] Certificates. The Class []-[],
Class []-[], Class []-[] and Class []-[] Certificates are subordinate to and
provide credit enhancement for the Class []-[] Certificates. The Class []-[],
Class []-[] and Class []-[] Certificates are subordinate to and provide credit
enhancement for the Class []-[] Certificates. The Class []-[] and Class []-[]
Certificates are subordinate to and provide credit enhancement for the Class
[]-[] Certificates. The Class []-[] Certificates are subordinate to and provide
credit enhancement for the Class []-[] Certificates. The Class R-1 and Class R-2
Interests will be the residual interests in each of REMIC 1 and REMIC 2. All
interests created hereby will be retired on or before the Latest Possible
Maturity Date.
REMIC 1
REMIC 1 will be evidenced by a single uncertificated residual interest,
ownership of which shall be evidenced by the Class R Certificate, and by the
REMIC 1- Accrual Class, and the Class []-[], Class []-[], Class []-[], Class
[]-[], Class []-[], Class []-[], Class []-[], Class []-[], Class []-[], Class
[]-[], Class []-[], Class []-[] and Class []-[] Interests, which will be
uncertificated and non-transferable and are hereby designated as the "regular
interests" in REMIC 1 for federal income tax purposes and will have the
following designations, initial principal balances, pass-through rates, and
corresponding Classes of REMIC 2 certificates ("CORRESPONDING CLASSES"):
=======================================================================================================================
Pass-Through Corresponding
REMIC 1 Interests Initial Balance Rate Class
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
Class []-[] (1/4 Corresponding Class' initial Class Net WAC Rate []-[]
Certificate Balance)
------------------------------ ------------------------------------------------ -------------------- ------------------
REMIC 1 Accrual (3/4 Cut-off Date Pool Principal Balance) Net WAC Rate N/A
Class
=======================================================================================================================
On each Distribution Date, the Interest Remittance Amount shall be
distributed as interest on the regular interests in REMIC 1 at the Pass-Through
Rates shown above, provided, however, that interest that accrues on the REMIC 1
Accrual Class for any Interest Accrual Period shall be deferred and added to the
balance of the REMIC 1 Accrual Class in an amount equal to []% of the Extra
Principal Distribution Amount for the related Distribution Date.
On each Distribution Date, Available Funds remaining after the
distributions described in the immediately preceding paragraph have been made,
shall be distributed in the following order and priority:
1. Concurrently, to the Class []-[], Class []-[], Class []-[], Class []-[],
Class []-[], Class []-[], Class []-[], Class []-[], Class []-[], Class
[]-[], Class []-[], Class []-[] and Class []-[] Interests until the
balance of each such Interest equals []% of the Class Certificate Balance
of the Corresponding Class of Certificates immediately after such
Distribution Date; and
2
2. To the REMIC 1 Accrual Class until its balance is reduced to zero.
Realized Losses shall be allocated among the regular interests in REMIC
1 in the same manner in which principal is distributed.
REMIC 2
The following table sets forth characteristics of the Certificates,
each of which, except for the Class R Certificates, is hereby designated a
"regular interest" in REMIC 2, together with the minimum denominations and
integral multiples in excess thereof in which such Classes shall be issuable
(except that one Certificate of each Class of Certificates may be issued in a
different amount and, in addition, one Class R Certificate representing the Tax
Matters Person Certificate may be issued in a different amount):
=======================================================================================================================
Initial Class Pass-Through Rate(1) Minimum Integral Multiples in
Certificate Balance Denomination Excess of Minimum
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (2) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (3) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (4) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (5) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (6) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (7) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (8) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (9) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (10) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (11) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (11) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (11) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class []-[] $[] LIBOR + []% (11) $25,000 $1
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class X (12) (13) N/A N/A
------------------- ----------------------- ----------------------------- ----------------- ------------------------
Class R $0 N/A N/A N/A
=======================================================================================================================
(1) As to any Distribution Date, this rate shall equal the lesser of (a)
the lesser of (i) the rate per annum set forth above and (ii) []%, and
(b) the applicable Net WAC Cap.
3
(2) After the Optional Termination Date, this rate will increase to LIBOR +
[]%.
(3) After the Optional Termination Date, this rate will increase to LIBOR +
[]%.
(4) After the Optional Termination Date, this rate will increase to LIBOR +
[]%.
(5) After the Optional Termination Date, this rate will increase to LIBOR +
[]%.
(6) After the Optional Termination Date, this rate will increase to LIBOR +
[]%.
(7) After the Optional Termination Date, this rate will increase to LIBOR +
[]%.
(8) After the Optional Termination Date, this rate will increase to LIBOR +
[]%.
(9) After the Optional Termination Date, this rate will increase to LIBOR +
[]%.
(10) After the Optional Termination Date, this rate will increase to LIBOR +
[]%.
(11) After the Optional Termination Date, this rate will increase to LIBOR +
[]%.
(12) On each Distribution Date, the Class X Certificates will have a
notional balance equal to the Pool Principal Balance.
(13) As to any Distribution Date, the Pass-Through Rate for the Class X
Certificates shall equal the excess of: (a) the Net WAC Rate over (b)
the product of: (i) four and (ii) the weighted average of the
Pass-Through Rates of the REMIC 1 regular interests, where the REMIC 1
Accrual Class is subject to a cap equal to zero and the Pass-Through
Rate on each other regular interest in REMIC 1 is subject to a cap
equal to the Pass-Through Rate on its Corresponding Class.
All fixed interest rates set forth in this Agreement are calculated
based on a 360-day year consisting of twelve 30-day months (30/360). All
adjustable interest rates set forth in this Agreement are calculated based on a
360-day year and the actual number of days elapsed in the related Interest
Accrual Period.
4
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
As of any Distribution Date, each Loan with respect to which
any portion of a Scheduled Payment is, as of the last day of the calendar month
immediately preceding that Distribution Date, 60 days or more contractually past
due (assuming 30 day months), each Loan in foreclosure, all REO Property and
each Loan for which the Mortgagor has filed for bankruptcy after the Closing
Date.
Adjusted Mortgage Rate
As to each Loan, and at any time, the per annum rate equal to
the Mortgage Rate less the Servicing Fee Rate.
Adjusted Net Mortgage Rate
As to each Loan, and at any time, the per annum rate equal to
the Mortgage Rate less the related Expense Rate.
Advance
The payment required to be made by the Servicer with respect
to any Distribution Date pursuant to Section 4.01, the amount of any such
payment being equal to the aggregate of payments of principal and interest (net
of the Servicing Fee) on the Loans that were due on such Loans' respective Due
Dates in the related Due Period and not received as of the close of business on
the Determination Date in the month of such Distribution Date, other than the
aggregate amount of any such delinquent payments that the Servicer, in its good
faith judgment, has determined would not be recoverable out of Insurance
Proceeds, Liquidation Proceeds or otherwise from the related Loans.
Aggregate Class [] Early Distribution Amount
As of any Distribution Date, the aggregate sum of all amounts
paid to the Class []-[], Class []-[] and Class []-[] Certificates on prior
Distribution Dates pursuant to clauses (xxxii) through (xxxvii) of Section
4.02(d).
Agreement
This Pooling and Servicing Agreement, together with all of the
exhibits and schedules hereto, and all amendments or supplements of any of the
foregoing.
Amount Held for Future Distribution
As to any Distribution Date and the Offered Certificates, the
aggregate amount held in the Certificate Account at the close of business on the
related Determination Date on account of (a) Principal Prepayments, Liquidation
Proceeds and Recoveries received after the Prepayment Period corresponding to
such Distribution Date and (b) all Scheduled Payments due after the Loans'
respective Due Dates in the related Due Period.
Applied Realized Loss Amount
With respect to (a) the Class []-[] Certificates, the Class
[]-[] Applied Realized Loss Amount, (b) the Class []-[] Certificates, the Class
[]-[] Applied Realized Loss Amount, (c) the Class []-[] Certificates, the Class
[]-[] Applied Realized Loss Amount, (d) the Class []-[] Certificates, the Class
[]-[] Applied Realized Loss Amount, (e) the Class []-[] Certificates, the Class
[]-[] Applied Realized Loss
5
Amount, (f) the Class []-[] Certificates, the Class []-[] Applied Realized Loss
Amount,(g) the Class []-[] Certificates, the Class []-[] Applied Realized Loss
Amount, (h) the Class []-[] Certificates, the Class []-[] Applied Realized Loss
Amount and (i) the Class []-[] Certificates, the Class []-[] Applied Realized
Loss Amount.
Available Funds
As to any Distribution Date, the sum of (a) the aggregate
amount held in the Certificate Account at the close of business on the related
Determination Date net of the Amount Held for Future Distribution and net of
amounts permitted to be withdrawn from the Certificate Account pursuant to
clauses (i)-(viii), inclusive, of Section 3.08(a) and amounts permitted to be
withdrawn from the Distribution Account pursuant to clauses (i) and (ii) of
Section 3.08(b), (b) the amount of the related Advance, if any, and (c) the
aggregate of the Purchase Prices and Substitution Adjustment Amounts received on
or before the related Distribution Account Deposit Date and (d) with respect to
the initial Distribution Date, the Initial Certificate Account Deposit.
Balloon Loans
Loans with balloon payments.
Bankruptcy Code
The United States Bankruptcy Reform Act of 1978, as amended,
and related rules promulgated thereunder.
Basic Principal Distribution Amount
With respect to any Distribution Date, the amount by which (a)
the Principal Remittance Amount for that Distribution Date exceeds (b) the
Overcollateralization Release Amount, if any, for that Distribution Date.
Beneficial Owner
With respect to any Book-Entry Certificate, the Person who is
the beneficial owner of such Book-Entry Certificate.
Book-Entry Certificates
The Offered Certificates.
Business Day
Any day other than (a) a Saturday or a Sunday or (b) a day on
which banking institutions in New York City, or in the city where the chief
executive office of the Servicer is located, are authorized or obligated by law
or executive order to be closed.
Cap Agreement
The Confirmation (as defined in the Master Agreement) bearing
the reference number ______________, dated as of ___________, 20___, relating to
the Transaction (as defined in the Master Agreement) under the Master Agreement
evidenced thereby.
Cap Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Cap
Distribution Amount over (ii) the sum of the amounts described in clauses (i)
through (xxviii) of the Section 4.02(e) for that Distribution Date.
6
Cap Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Cap
Distribution Amount over (ii) the sum of the amounts described in clauses (i)
through (xxix) of Section 4.02(e) for that Distribution Date.
Cap Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Cap
Distribution Amount over (ii) the sum of the amounts described in clauses (i)
through (xxx) of the Section 4.02(e) for that Distribution Date.
Cap Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Cap
Distribution Amount over (ii) the sum of the amounts described in clauses (i)
through (xxii) of the Section 4.02(e) for that Distribution Date.
Cap Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Cap
Distribution Amount over (ii) the sum of the amounts described in clauses (i)
through (xxiii) of the Section 4.02(e) for that Distribution Date.
Cap Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Cap
Distribution Amount over (ii) the sum of the amounts described in clauses (i)
through (xxiv) of the Section 4.02(e) for that Distribution Date.
Cap Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Cap
Distribution Amount over (ii) the sum of the amounts described in clauses (i)
through (xxv) of the Section 4.02(e) for that Distribution Date.
Cap Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Cap
Distribution Amount over (ii) the sum of the amounts described in clauses (i)
through (xxvi) of the Section 4.02(e) for that Distribution Date.
Cap Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Cap Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Cap
Distribution Amount over (ii) the sum of the amounts described in clauses (i)
through (xxvii) of the Section 4.02(e) for that Distribution Date.
7
Cap Distribution Amount
As defined in Section 4.02(e).
Cap Extra Principal Distribution Amount
As of any Distribution Date, the lesser of (a) the remaining
Cap Distribution Amount after making all of the distributions in clauses (i)
through (xx) of Section 4.02(e) and (b) the Overcollateralization Deficiency for
that Distribution Date, calculated after giving effect to the funding of the
Extra Principal Distribution Amount pursuant to clause (iii) of Section 4.02(d).
Cap Notional Balance
As of any Distribution Date, the notional balance specified
under the Cap Agreement for that Distribution Date.
Cap Reserve Fund
The account established and maintained by the Trustee pursuant
to Section 3A.01.
Cap Stated Termination
___________, 20___, subject to the Following Business Day
Convention (as such term is defined in the Cap Agreement).
Cap Unpaid Realized Loss Amount
For any class of Subordinate Certificates and as to any
Distribution Date, the excess of (a) the Unpaid Realized Loss Amount with
respect to that class for that Distribution Date over (b) the Excess Cashflow
Realized Loss Amortization Amount paid to that Class pursuant to Section 4.02(d)
on that Distribution Date.
Certificates
The Offered Certificates, the Class R Certificates and the
Class X Certificates.
Certificate Account
The separate Eligible Account created and maintained by the
Servicer pursuant to Section 3.05 with a depository institution in the name of
the Servicer for the benefit of the Trustee on behalf of the Certificateholders
and designated "Certificate Account, Equity One, Inc., as trustee for the
registered holders of Popular ABS, Inc., Mortgage Pass-Through Certificates
Series []-[]."
Certificate Balance
With respect to any Offered Certificate at any time, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof reduced by the
sum of (a) all amounts previously distributed to that Offered Certificate as
payments of principal, and (b) with respect to any Offered Certificate that is a
Class []-[], Class []-[], Class []-[], Class []-[], Class []-[], Class []-[],
Class []-[], Class []-[] or Class []-[] Certificate, that Offered Certificate's
pro rata share of the cumulative amount of Applied Realized Loss Amounts with
respect to such Class for all prior Distribution Dates.
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
8
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.
Certificate Register
The register maintained pursuant to Section 5.02.
Certificate Registrar
______________________ and its successors and, if a successor
certificate registrar is appointed hereunder, such successor.
Class
All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-1 and designated as a
Class []-[] Certificate.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-1 and designated as a
Class []-[] Certificate.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-1 and designated as a
Class []-[] Certificate.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-1 and designated as a
Class []-[] Certificate.
Class []-[] Applied Realized Loss Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account the distribution of the Principal Distribution Amount on that
Distribution Date, but prior to the application of the Class []-[] Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of
the Class []-[] Applied Realized Loss Amount and the Class []-[] Applied
Realized Loss Amount, in each case as of that Distribution Date.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-4 and designated as a
Class []-[] Certificate.
Class []-[] Principal Distribution Amount
As of any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect, the excess of (a) the sum of (i)
the sum of the Class Certificate Balances of the Senior Certificates (after
taking into account the payment of the Senior Principal Distribution Amount on
that Distribution Date), (ii) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date), (iii) the
9
Class Certificate Balance of the Class []-[] Certificates (after taking into
account the payment of the Class []-[] Principal Distribution Amount on that
Distribution Date), (iv) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date), (v) the Class Certificate
Balance of the Class []-[] Certificates (after taking into account the payment
of the Class []-[] Principal Distribution Amount on that Distribution Date),
(vi) the Class Certificate Balance of the Class []-[] Certificates (after taking
into account the payment of the Class []-[] Principal Distribution Amount on
that Distribution Date), (vii) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date) and (viii) the Class Certificate
Balance of the Class []-[] Certificates immediately prior to that Distribution
Date over (b) the lesser of (i) the product of (A) []% and (B) the Pool
Principal Balance as of the last day of the related Due Period and (ii) the Pool
Principal Balance as of the last day of the related Due Period minus the product
of (A) []% and (B) the Cut-off Date Pool Principal Balance.
Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i)
through (xxiii) of Section 4.02(d) for that Distribution Date.
Class []-[] Applied Realized Loss Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account the distribution of the Principal Distribution Amount on that
Distribution Date, but prior to the application of the Class []-[] Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Realized Loss Amount as of that Distribution Date over (ii) the Class
[]-[] Applied Realized Loss Amount as of that Distribution Date.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-4 and designated as a
Class []-[] Certificate.
Class []-[] Principal Distribution Amount
As of any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect, the excess of (a) the sum of (i)
the sum of the Class Certificate Balances of the Senior Certificates (after
taking into account the payment of the Senior Principal Distribution Amount on
that Distribution Date), (ii) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date), (iii) the Class Certificate
Balance of the Class []-[] Certificates (after taking into account the payment
of the Class []-[] Principal Distribution Amount on that Distribution Date),
(iv) the Class Certificate Balance of the Class []-[] Certificates (after taking
into account the payment of the Class []-[] Principal Distribution Amount on
that Distribution Date), (v) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date), (vi) the Class Certificate
Balance of the Class []-[] Certificates (after taking into account the payment
of the Class []-[] Principal Distribution Amount on that Distribution Date),
(vii) the Class Certificate Balance of the Class []-[] Certificates (after
taking into account the payment of the Class []-[] Principal Distribution Amount
on that Distribution Date), (viii) the Class Certificate Balance of the Class
[]-[] Certificates (after taking into account the payment of the Class []-[]
Principal Distribution Amount on that Distribution Date) and (ix) the Class
Certificate Balance of the Class []-[] Certificates immediately prior to that
Distribution Date over (b) the lesser of (i) the product of (A) []% and (B) the
Pool Principal
10
Balance as of the last day of the related Due Period and (ii) the Pool Principal
Balance as of the last day of the related Due Period minus the product of (A)
[]% and (B) the Cut-off Date Pool Principal Balance.
Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i)
through (xxvi) of Section 4.02(d) for that Distribution Date.
Class []-[] Applied Realized Loss Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account the distribution of the Principal Distribution Amount on that
Distribution Date, but prior to the application of the Class []-[] Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the Realized
Loss Amount as of that Distribution Date.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-4 and designated as a
Class []-[] Certificate.
Class []-[] Principal Distribution Amount
As of any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect, the excess of (a) the sum of (i)
the sum of the Class Certificate Balances of the Senior Certificates (after
taking into account the payment of the Senior Principal Distribution Amount on
that Distribution Date), (ii) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date), (iii) the Class Certificate
Balance of the Class []-[] Certificates (after taking into account the payment
of the Class []-[] Principal Distribution Amount on that Distribution Date),
(iv) the Class Certificate Balance of the Class []-[] Certificates (after taking
into account the payment of the Class []-[] Principal Distribution Amount on
that Distribution Date), (v) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date), (vi) the Class Certificate
Balance of the Class []-[] Certificates (after taking into account the payment
of the Class []-[] Principal Distribution Amount on that Distribution Date),
(vii) the Class Certificate Balance of the Class []-[] Certificates (after
taking into account the payment of the Class []-[] Principal Distribution Amount
on that Distribution Date), (viii) the Class Certificate Balance of the Class
[]-[] Certificates (after taking into account the payment of the Class []-[]
Principal Distribution Amount on that Distribution Date), (ix) the Class
Certificate Balance of the Class []-[] Certificates (after taking into account
the payment of the Class []-[] Principal Distribution Amount on that
Distribution Date) and (x) the Class Certificate Balance of the Class []-[]
Certificates immediately prior to that Distribution Date over (b) the lesser of
(i) the product of (A) []% and (B) the Pool Principal Balance as of the last day
of the related Due Period and (ii) the Pool Principal Balance as of the last day
of the related Due Period minus the product of (A) []% and (B) the Cut-off Date
Pool Principal Balance.
Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i)
through (xxix) of Section 4.02(d) for that Distribution Date.
11
Class Certificate Balance
With respect to any Class of Offered Certificates and as to
any Distribution Date, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date. The Class Certificate Balance of the
Class R Certificates shall be zero.
Class Interest Shortfall
As to any Distribution Date and any Class of Offered
Certificates, the amount by which the amount described in the definition of
Interest Distribution Amount for such Class exceeds the amount of interest
actually distributed on such Class on such Distribution Date.
Class []-[] Applied Realized Loss Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account the distribution of the Principal Distribution Amount on that
Distribution Date, but prior to the application of the Class []-[] Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of
the Class []-[] Applied Realized Loss Amount, the Class []-[] Applied Realized
Loss Amount, the Class []-[] Applied Realized Loss Amount, the Class []-[]
Applied Realized Loss Amount, the Class []-[] Applied Realized Loss Amount, the
Class []-[] Applied Realized Loss Amount, the Class []-[] Applied Realized Loss
Amount and the Class []-[] Applied Realized Loss Amount, in each case as of that
Distribution Date.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class []-[] Certificate.
Class []-[] Principal Distribution Amount
As of any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect, the excess of (a) the sum of (i)
the sum of the Class Certificate Balances of the Senior Certificates (after
taking into account the payment of the Senior Principal Distribution Amount on
that Distribution Date) and (ii) the Class Certificate Balance of the Class
[]-[] Certificates immediately prior to that Distribution Date over (b) the
lesser of (i) the product of (A) []% and (B) the Pool Principal Balance as of
the last day of the related Due Period and (ii) the Pool Principal Balance as of
the last day of the related Due Period minus the product of (A) 0.50% and (B)
the Cut-off Date Pool Principal Balance.
12
Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i)
through (v) of Section 4.02(d) for that Distribution Date.
Class []-[] Applied Realized Loss Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account the distribution of the Principal Distribution Amount on that
Distribution Date, but prior to the application of the Class []-[] Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of
the Class []-[] Applied Realized Loss Amount, the Class []-[] Applied Realized
Loss Amount, the Class []-[] Applied Realized Loss Amount, the Class []-[]
Applied Realized Loss Amount, the Class []-[] Applied Realized Loss Amount, the
Class []-[] Applied Realized Loss Amount and the Class []-[] Applied Realized
Loss Amount, in each case as of that Distribution Date.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class []-[] Certificate.
Class []-[] Principal Distribution Amount
As of any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect, the excess of (a) the sum of (i)
the sum of the Class Certificate Balances of the Senior Certificates (after
taking into account the payment of the Senior Principal Distribution Amount on
that Distribution Date), (ii) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date) and (iii) the Class Certificate
Balance of the Class []-[] Certificates immediately prior to that Distribution
Date over (b) the lesser of (i) the product of (A) []% and (B) the Pool
Principal Balance as of the last day of the related Due Period and (ii) the Pool
Principal Balance as of the last day of the related Due Period minus the product
of (A) []% and (B) the Cut-off Date Pool Principal Balance.
Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i)
through (viii) of Section 4.02(d) for that Distribution Date.
Class []-[] Applied Realized Loss Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account the distribution of the Principal Distribution Amount on that
Distribution Date, but prior to the application of the Class []-[] Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of
the Class []-[] Applied Realized Loss Amount, the Class []-[] Applied Realized
Loss Amount, the Class []-[] Applied Realized Loss Amount, the Class []-[]
Applied Realized Loss Amount, the Class []-[] Applied Realized Loss Amount and
the Class []-[] Applied Realized Loss Amount, in each case as of that
Distribution Date.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class []-[] Certificate.
13
Class []-[] Principal Distribution Amount
As of any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect, the excess of (a) the sum of (i)
the sum of the Class Certificate Balances of the Senior Certificates (after
taking into account the payment of the Senior Principal Distribution Amount on
that Distribution Date), (ii) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date), (iii) the Class Certificate
Balance of the Class []-[] Certificates (after taking into account the payment
of the Class []-[] Principal Distribution Amount on that Distribution Date) and
(iv) the Class Certificate Balance of the Class []-[] Certificates immediately
prior to that Distribution Date over (b) the lesser of (i) the product of (A)
[]% and (B) the Pool Principal Balance as of the last day of the related Due
Period and (ii) the Pool Principal Balance as of the last day of the related Due
Period minus the product of (A) []% and (B) the Cut-off Date Pool Principal
Balance.
Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i)
through (xi) of Section 4.02(d) for that Distribution Date.
Class []-[] Applied Realized Loss Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account the distribution of the Principal Distribution Amount on that
Distribution Date, but prior to the application of the Class []-[] Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of
the Class []-[] Applied Realized Loss Amount, the Class []-[] Applied Realized
Loss Amount, the Class []-[] Applied Realized Loss Amount, the Class []-[]
Applied Realized Loss Amount and the Class []-[] Applied Realized Loss Amount,
in each case as of that Distribution Date.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class []-[] Certificate.
Class []-[] Principal Distribution Amount
As of any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect, the excess of (a) the sum of (i)
the sum of the Class Certificate Balances of the Senior Certificates (after
taking into account the payment of the Senior Principal Distribution Amount on
that Distribution Date), (ii) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date), (iii) the Class Certificate
Balance of the Class []-[] Certificates (after taking into account the payment
of the Class []-[] Principal Distribution Amount on that Distribution Date),
(iv) the Class Certificate Balance of the Class []-[] Certificates (after taking
into account the payment of the Class []-[] Principal Distribution Amount on
that Distribution Date) and (v) the Class Certificate Balance of the Class []-[]
Certificates immediately prior to that Distribution Date over (b) the lesser of
(i) the product of (A) []% and (B) the Pool Principal Balance as of the last day
of the related Due Period and (ii) the Pool Principal Balance as of the last day
of the related Due Period minus the product of (A) []% and (B) the Cut-off Date
Pool Principal Balance.
Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the
14
excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum of the
amounts described in clauses (i) through (xiv) of Section 4.02(d) for that
Distribution Date.
Class []-[] Applied Realized Loss Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account the distribution of the Principal Distribution Amount on that
Distribution Date, but prior to the application of the Class []-[] Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of
the Class []-[] Applied Realized Loss Amount, the Class []-[] Applied Realized
Loss Amount, the Class []-[] Applied Realized Loss Amount and the Class []-[]
Applied Realized Loss Amount, in each case as of that Distribution Date.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class []-[] Certificate.
Class []-[] Principal Distribution Amount
As of any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect, the excess of (a) the sum of (i)
the sum of the Class Certificate Balances of the Senior Certificates (after
taking into account the payment of the Senior Principal Distribution Amount on
that Distribution Date), (ii) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date), (iii) the Class Certificate
Balance of the Class []-[] Certificates (after taking into account the payment
of the Class []-[] Principal Distribution Amount on that Distribution Date),
(iv) the Class Certificate Balance of the Class []-[] Certificates (after taking
into account the payment of the Class []-[] Principal Distribution Amount on
that Distribution Date), (v) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date) and (vi) the Class Certificate
Balance of the Class []-[] Certificates immediately prior to that Distribution
Date over (b) the lesser of (i) the product of (A) []% and (B) the Pool
Principal Balance as of the last day of the related Due Period and (ii) the Pool
Principal Balance as of the last day of the related Due Period minus the product
of (A) []% and (B) the Cut-off Date Pool Principal Balance.
Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i)
through (xvii) of Section 4.02(d) for that Distribution Date.
Class []-[] Applied Realized Loss Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Class Certificate Balance thereof (after taking into
account the distribution of the Principal Distribution Amount on that
Distribution Date, but prior to the application of the Class []-[] Applied
Realized Loss Amount, if any, on that Distribution Date) and (b) the excess of
(i) the Realized Loss Amount as of that Distribution Date over (ii) the sum of
the Class []-[] Applied Realized Loss Amount, the Class []-[] Applied Realized
Loss Amount and the Class []-[] Applied Realized Loss Amount, in each case as of
that Distribution Date.
Class []-[] Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit A-3 and designated as a
Class []-[] Certificate.
15
Class []-[] Principal Distribution Amount
As of any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect, the excess of (a) the sum of (i)
the sum of the Class Certificate Balances of the Senior Certificates (after
taking into account the payment of the Senior Principal Distribution Amount on
that Distribution Date), (ii) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date), (iii) the Class Certificate
Balance of the Class []-[] Certificates (after taking into account the payment
of the Class []-[] Principal Distribution Amount on that Distribution Date),
(iv) the Class Certificate Balance of the Class []-[] Certificates (after taking
into account the payment of the Class []-[] Principal Distribution Amount on
that Distribution Date), (v) the Class Certificate Balance of the Class []-[]
Certificates (after taking into account the payment of the Class []-[] Principal
Distribution Amount on that Distribution Date), (vi) the Class Certificate
Balance of the Class []-[] Certificates (after taking into account the payment
of the Class []-[] Principal Distribution Amount on that Distribution Date) and
(vii) the Class Certificate Balance of the Class []-[] Certificates immediately
prior to that Distribution Date over (b) the lesser of (i) the product of (A)
[]% and (B) the Pool Principal Balance as of the last day of the related Due
Period and (ii) the Pool Principal Balance as of the last day of the related Due
Period minus the product of (A) []% and (B) the Cut-off Date Pool Principal
Balance.
Class []-[] Realized Loss Amortization Amount
As to the Class []-[] Certificates and as of any Distribution
Date, the lesser of (a) the Unpaid Realized Loss Amount for the Class []-[]
Certificates as of that Distribution Date and (b) the excess of (i) the Monthly
Excess Cashflow Amount over (ii) the sum of the amounts described in clauses (i)
through (xx) of Section 4.02(d) for that Distribution Date.
Class R Certificates
The certificates representing the single "residual interest"
in each of REMIC 1 and REMIC 2, substantially in the form attached hereto as
Exhibit B-1.
Class Unpaid Interest Amounts
As to any Distribution Date and any Class of Offered
Certificates, the amount by which the aggregate Class Interest Shortfalls for
such Class on prior Distribution Dates exceeds the amount of Class Unpaid
Interest Amounts distributed on such Class on prior Distribution Dates plus
interest on such amount at the related Pass-Through Rate.
Class X Certificate
Any Certificate executed and authenticated by the Trustee
substantially in the form attached hereto as Exhibit B-2 and designated as a
Class X Certificate.
Closing Date
___________, 20___.
Closing Place
The offices of Stradley, Ronon, Xxxxxxx & Xxxxx, LLP, 0000 Xxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
Code
The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collateral
The assets constituting the Loans, Mortgage Files and the
Trust Fund, and any and all contractual, legal, equitable or other rights in
connection therewith, and all proceeds thereof (but not
16
including payments of interest and principal due and payable with respect to the
Loans on or before the Cut-off Date).
Collateral Value
With respect to any Loan, other than Refinance Loans, an
amount equal to the lesser of (a) the appraised value of the related Mortgaged
Property based on an appraisal obtained by the originator from an independent
fee appraiser at the time of the origination of such Loan, and (b) if the Loan
was originated either in connection with the acquisition of the Mortgaged
Property by the borrower or within one year after acquisition of the Mortgaged
Property by the borrower, the purchase price paid by such borrower for the
Mortgaged Property. In the case of Refinance Loans, the Collateral Value is the
appraised value of the Mortgaged Property based upon the appraisal obtained at
the time of refinancing.
Combined Loan-to-Value Ratio
With respect to any Loan and as to any date of determination,
the fraction, expressed as a percentage, the numerator of which is the principal
balance of such Loan at the date of origination plus, in the case of a Second
Lien Loan, the outstanding principal balance of the related first lien mortgage
loan on the date of origination of such Second Lien Loan, and the denominator of
which is the Collateral Value of the related Mortgaged Property.
Commission
The Securities and Exchange Commission.
Corporate Trust Office
The designated office of the Trustee in the State of New York
at which (a) its corporate trust business with respect to this Agreement shall
be administered is located at _____________________________, Attention:
_________________________, Popular ABS []-[] and (b) Certificates may be
presented for transfer and exchange and for purposes of presentment and
surrender for the final distributions thereon is located at
_________________________ Attention: _____________________________ Popular ABS
[]-[], or such other address as the Trustee shall notify the Depositor, the
Servicer, the Sellers and the Certificateholders.
Corresponding Class
As defined in the Preliminary Statement.
Corridor Agreement
The Confirmation (as defined in the Master Agreement) bearing
the reference number ________________, dated as of ________________, 20___,
relating to the Transaction (as defined in the Master Agreement) under the
Master Agreement evidenced thereby.
Corridor Distribution Amount
As defined in Section 4.02(g).
Corridor Notional Balance
As of any Distribution Date, the notional balance specified
under the Corridor Agreement for that Distribution Date.
Corridor Reserve Fund
The account established and maintained by the Trustee pursuant
to Section 3A.02.
17
Corridor Stated Termination
_________________, subject to the Following Business Day
Convention (as such term is defined in the Corridor Agreement).
Counterparty
_________________
Custodial Agreement
As defined in Section 8.13.
Custodian
As defined in Section 8.13.
Cut-off Date
________________, 20___.
Cut-off Date Pool Principal Balance
$______________________.
Cut-off Date Principal Balance
As to any Loan, the Stated Principal Balance thereof as of the
close of business on _________________, 20___ giving effect to scheduled
payments of principal and interest due on _________________, 20___, whether or
not those scheduled payments have been made.
Defective Loan
Any Loan which is required to be repurchased pursuant to
Section 2.02 or 2.03.
Deficient Valuation
With respect to any 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 Loan, which valuation results from a
proceeding initiated under the Bankruptcy Code.
Definitive Certificates
Any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Loan
As defined in Section 2.03(c).
Denomination
With respect to each Offered Certificate, Class X Certificate
or Class R Certificate, the amount set forth on the face thereof as the "Initial
Certificate Balance of this Certificate" or the "Percentage Interest."
Depositor
Popular ABS, Inc., a Delaware corporation, or its successor
in interest.
18
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
As to any Distribution Date, the 21st day of each month or, if
such day is not a Business Day, the next preceding Business Day; provided,
however, that the Determination Date in each month will be at least two Business
Days preceding the related Distribution Date.
Distribution Account
The separate Eligible Account created and maintained by the
Trustee pursuant to Section 3.05 in the name of the Trustee for the benefit of
the Certificateholders and designated "Distribution Account,
___________________, as trustee for the registered holders of Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series []-[]." Funds in the Distribution
Account shall be held uninvested in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Distribution Account Deposit Date
As to any Distribution Date, 9:00 a.m. New York City time on
the Business Day immediately preceding such Distribution Date.
Distribution Date
The 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 on ________________, 20___.
Due Date
With respect to any Loan, the date on which scheduled payments
of interest and/or principal are due thereon, which date is a set day, but not
necessarily the first day, of each month.
Due Period
With respect to any Distribution Date, the period beginning on
the second day of the calendar month preceding the calendar month in which that
Distribution Date occurs and ending at the close of business on the first day of
the month in which that Distribution Date occurs.
Eligible Account
Any of (a) an account or accounts maintained with a federal or
state chartered depository institution or trust company, the short-term
unsecured debt obligations of which (or, in the case of a depository institution
or trust company that is the principal subsidiary of a holding company, the debt
obligations of such holding company) have the highest short-term ratings of each
Rating Agency at the time any amounts are held on deposit therein, or (b) an
account or accounts in a depository institution or trust company in which such
accounts are insured by the FDIC (to the limits established by the FDIC) and the
uninsured deposits in which accounts are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the Trustee and to each Rating
Agency, the Certificateholders have a claim with respect to the funds in such
account or a perfected first priority security interest against any collateral
(which shall be limited to Permitted Investments) securing such funds that is
superior to claims of any
19
other depositors or creditors of the depository institution or trust company in
which such account is maintained, or (c) a trust account or accounts maintained
with (i) the trust department of a federal or state chartered depository
institution or (ii) a trust company, acting in its fiduciary capacity or (d) any
other account acceptable to each Rating Agency, as evidenced by a letter from
such Rating Agency to the Trustee, without reduction or withdrawal of the then
current ratings of the Certificates. Eligible Accounts may bear interest, and
may include, if otherwise qualified under this definition, accounts maintained
with the Trustee.
Equity One-Delaware
Equity One, Inc., a Delaware corporation.
Equity One-Minnesota
Equity One, Inc., a Minnesota corporation.
Equity One-Pennsylvania
Equity One, Incorporated, a Pennsylvania corporation.
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 (without regard to the ratings requirement
or other requirements that the securities or the investor must satisfy) of the
Underwriter Exemption, or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate
Any of the Class []-[] Certificates, Class []-[] Certificates,
Class []-[] Certificates, Class X Certificates or Class R Certificates; any
Certificate of a Class that ceases to satisfy the applicable rating requirements
of the Underwriter Exemption.
Escrow Account
The Eligible Account or Eligible Accounts established and
maintained by the Servicer pursuant to Section 3.06(a).
Event of Default
As defined in Section 7.01.
Excess Cashflow Realized Loss Amortization Amount
With respect to, (a) the Class []-[] Certificates, the Class
[]-[] Realized Loss Amortization Amount, (b) the Class []-[] Certificates, the
Class []-[] Realized Loss Amortization Amount, (c) the Class []-[] Certificates,
the Class []-[] Realized Loss Amortization Amount, (d) the Class []-[]
Certificates, the Class []-[] Realized Loss Amortization Amount, (e) the Class
[]-[] Certificates, the Class []-[] Realized Loss Amortization Amount, (f) the
Class []-[] Certificates, the Class []-[] Realized Loss Amortization Amount, (g)
the Class []-[] Certificates, the Class []-[] Realized Loss Amortization Amount,
(h) the Class []-[] Certificates, the Class []-[] Realized Loss Amortization
Amount and (h) the Class []-[] Certificates, the Class []-[] Realized Loss
Amortization Amount.
Exchange Act
The Securities Exchange Act of 1934, as amended.
20
Excess Proceeds
With respect to any Liquidated Loan, the amount, if any, by
which the sum of any Liquidation Proceeds of such Loan received in the calendar
month in which such Loan became a Liquidated Loan, net of any amounts previously
reimbursed to the Servicer as Nonrecoverable Advance(s) with respect to such
Loan pursuant to Section 3.08(a)(iii), exceeds (a) the unpaid principal balance
of such Liquidated Loan as of the Due Date in the calendar month in which such
Loan became a Liquidated Loan plus (b) accrued interest at the Mortgage Rate
from the Due Date as to which interest was last paid or advanced (and not
reimbursed) to Certificateholders up to the Due Date in the calendar month in
which such Loan became a Liquidated Loan.
Expense Rate
As to each Loan, the sum of (a) the Servicing Fee Rate and (b)
the Trustee Fee Rate.
Extra Principal Distribution Amount
As of any Distribution Date, the lesser of (a) the Monthly
Excess Interest Amount for that Distribution Date and (b) the
Overcollateralization Deficiency for that Distribution Date.
FDIC
The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC
The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FIRREA
The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
FNMA
Xxxxxx Mae, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
Indirect Participant
A broker, dealer, bank or other financial institution or other
Person that clears through or maintains a custodial relationship with a
Depository Participant.
Initial Certificate Account Deposit
As defined in Section 2.01(a).
Insurance Policy
With respect to any Loan included in the Trust Fund, any
insurance policy, and including all riders and endorsements thereto in effect,
including any replacement policy or policies for any Insurance Policies.
Insurance Proceeds
Proceeds paid by an insurer pursuant to any Insurance Policy,
in each case other than any amount included in such Insurance Proceeds in
respect of Insured Expenses.
21
Insured Expenses
Expenses covered by an Insurance Policy.
Interest Accrual Period
With respect to the Offered Certificates and with respect to
the interests in REMIC 1 and REMIC 2, and any Distribution Date, the period
commencing on the Distribution Date in the calendar month prior to the month of
such Distribution Date (or on the Closing Date with respect to the first
Distribution Date) and ending on the day preceding such Distribution Date.
Interest Distribution Amount
With respect to any Distribution Date and each Class of the
Offered Certificates, the amount of interest accrued during the related Interest
Accrual Period at the Pass-Through Rate for such Class on the related Class
Certificate Balance, reduced by such Class' pro rata share of the amount of (a)
Net Prepayment Interest Shortfalls and (b) Relief Act Reductions incurred on the
Loans during the related Due Period (each such Class' pro rata share to be based
on the amount of interest to which such Class would have been entitled
notwithstanding such Net Prepayment Interest Shortfalls and Relief Act
Reductions).
Interest Remittance Amount
With respect to any Determination Date, the sum, without
duplication, of (a) all interest collected or advanced on the Loans during the
related Due Period and (b) the portion of any Substitution Adjustment Amount,
Termination Price, Purchase Price, or Liquidation Proceeds, relating to interest
and received during the related Prepayment Period.
Investment Letter
As defined in Section 5.02(b).
Latest Possible Maturity Date
The Distribution Date following the third anniversary of the
scheduled maturity date of the Loan having the latest scheduled maturity date as
of the Cut-off Date.
Last Scheduled Distribution Date
The Distribution Date in _____________ 20___.
LIBOR
As of any LIBOR Determination Date, the London interbank
offered rate for one-month United States dollar deposits which appears in the
Moneyline Telerate Page 3750 as of 11:00 a.m., London time, on that date. If the
rate does not appear on Moneyline Telerate Page 3750, the rate for that day will
be determined on the basis of the rates at which deposits in United States
dollars are offered by the Reference Banks at approximately 11:00 a.m. (London
time), on that day to prime banks in the London interbank market. 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 quotations are provided, the
rate for that day 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 day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Trustee in consultation with the Servicer, at approximately 11:00 a.m. (New
York City time) on that day for loans in United States dollars to leading
European banks.
22
LIBOR Determination Date
With respect to any Interest Accrual Period for the Offered
Certificates, the second London business day preceding the commencement of such
Interest Accrual Period. For purposes of determining LIBOR, a "London business
day" is any day on which dealings in deposits of United States dollars are
transacted in the London interbank market.
Liquidated Loan
With respect to any Distribution Date, a defaulted Loan
(including any REO Property) that was liquidated in the related Prepayment
Period Date and as to which the Servicer has determined (in accordance with this
Agreement) that it has received all amounts it expects to receive in connection
with the liquidation of such Loan, including the final disposition of an REO
Property.
Liquidation Proceeds
Amounts, including Insurance Proceeds, received in connection
with the partial or complete liquidation of defaulted Loans, whether through
trustee's sale, foreclosure sale or otherwise or amounts received in connection
with any condemnation or partial release of a Mortgaged Property and any other
proceeds received in connection with an REO Property other than Recoveries, less
the Servicing Amount applicable to such defaulted Loans.
Loans
The mortgage loans identified on the Loan Schedule as of the
Closing Date.
Loan Schedule
As of any date, the list of Loans included in the Trust Fund
on such date, attached hereto as Schedule I (as from time to time amended by the
Servicer to reflect the addition of Substitute Loans and the deletion of Deleted
Loans pursuant to the provisions of this Agreement), setting forth the following
information with respect to each Loan:
(a) the loan number;
(b) the Mortgagor's name and the state in which the Mortgaged
Property is located, including the zip code;
(c) the maturity date;
(d) the Cut-off Date Principal Balance;
(e) the first payment date of the Loan;
(f) lien position (either first or second);
(g) the Scheduled Payment in effect as of the Cut-off Date;
(h) the current Mortgage Rate;
(i) the principal balance of the Loan at origination; and
(j) if applicable, the MIN assigned to such Loan.
23
Majority in Interest
As to each Class of Offered Certificates, the Holders of
Certificates of such Class evidencing, in the aggregate, at least 51% of the
Percentage Interests evidenced by all Certificates of such Class.
Master Agreement
The Master Agreement (including the Schedule thereto and the
Transactions (as defined in the Master Agreement) thereunder evidenced by the
Cap Agreement and the Corridor Agreement) dated as of _______________, 20___, by
and between the Counterparty and the Trustee not in its individual capacity, but
solely as trustee for the benefit of the Certificateholders of the Popular ABS,
Inc. Mortgage Pass-Through Certificates, Series []-[].
MERS (R)
Mortgage Electronic Registration Systems, Inc., or its
successors in interest.
MERS (R) System
That certain electronic registry system maintained by
MERSCORP, Inc., or its successors in interest.
MIN
The Mortgage Identification Number assigned by MERS (R) to a
MOM Loan.
MOM Loan
Any Loan as to which MERS (R) is acting as mortgagee solely as
nominee for the originator of such Loan and its successors and assigns.
Monthly Excess Cashflow Amount
The sum of the Monthly Excess Interest Amount, the
Overcollateralization Release Amount and the Remaining Principal Distribution
Amount.
Monthly Excess Interest Amount
As to any Distribution Date, an amount equal to any Remaining
Interest Remittance Amount remaining after the distributions set forth in
clauses (ii)(A) through (ii)(I) of Section 4.02(a).
Monthly Statement
The statement prepared by the Trustee pursuant to Section
4.03.
Moody's
Xxxxx'x Investors Service, Inc., or any successor thereto. For
purposes of Section 10.05(b) the address for notices to Moody's shall be Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Monitoring Department, or such other address as Moody's may
hereafter furnish to the Depositor or the Servicer.
Mortgage
The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.
24
Mortgaged Property
The underlying property securing a Loan.
Mortgage File
The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Loan and any additional documents delivered to the
Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Note
The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Loan, together with any
amendment or modification thereto.
Mortgage Rate
The annual rate of interest borne by a Mortgage Note as set
forth therein.
Mortgagor
The obligor(s) on a Mortgage Note.
Net Prepayment Interest Shortfalls
As to any Distribution Date, the amount by which the aggregate
of Prepayment Interest Shortfalls during the related Prepayment Period exceeds
an amount equal to the aggregate Servicing Fee for such Distribution Date before
reduction of the Servicing Fee in respect of such Prepayment Interest
Shortfalls.
Net Realized Losses
For any Class of Subordinated Certificates and any
Distribution Date, the excess of (a) the amount of unreimbursed Realized Losses
previously allocated to that Class over (b) the sum of (i) the amount of any
increases to the Class Certificate Balance of that Class pursuant to Section
4.02A due to Recoveries and (ii) Realized Loss Amortization Amounts previously
distributed to such Class.
Net Recovery Realized Losses
For any Class of Subordinated Certificates and any
Distribution Date, the excess of Net Realized Losses for such Distribution Date
over the Realized Loss Amortization Amount distributed to that Class on that
Distribution Date.
Net WAC Cap
As to any Distribution Date, the per annum rate equal to the
weighted average Adjusted Net Mortgage Rate of the Loans as of the first day of
the Due Period relating to that Distribution Date, weighted on the basis of the
aggregate principal balance of the Loans as of the first day of the related Due
Period (calculated on the basis of a 360-day year and the actual number of days
elapsed in the related Interest Accrual Period).
Net WAC Cap Account
The account established and maintained pursuant to Section
3A.03.
Net WAC Cap Carryover
With respect to any Class of the Offered Certificates and any
Distribution Date, the sum of (a) the excess, if any, of the Interest
Distribution Amount for such Class for such Distribution Date, calculated at its
Pass-Through Rate (without regard to the applicable Net WAC Cap), over the
actual Interest Distribution Amount for such Class for such Distribution Date,
and (b) any related Net WAC Cap Carryover remaining unpaid from the prior
Distribution Date, together with interest accrued thereon at its
25
Pass-Through Rate (without regard to the applicable Net WAC Cap) during the
related Interest Accrual Period.
Net WAC Rate
As to any Distribution Date, a rate equal to the weighted
average of the Adjusted Net Mortgage Rates of all Outstanding Loans, such
weighted average to be calculated based on the principal balances of such
Outstanding Loans as of the first day of the related Due Period on the basis of
either (a) a 360-day year and the actual number of days elapsed in the related
Interest Accrual Period or (b) a 360-day year made up of twelve 30-day months,
as applicable.
Nonrecoverable Advance
Any portion of an Advance previously made or proposed to be
made by the Servicer that, in the good faith judgment of the Servicer, will not
be ultimately recoverable by the Servicer from the related Mortgagor, related
Liquidation Proceeds or otherwise.
Notice 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
The certificates representing "regular interests" in REMIC 2,
which are designated as the Senior Certificates and the Subordinate
Certificates.
Officer's Certificate
A certificate (a) signed by the Chairman of the Board, the
Vice Chairman of the Board, the President, a Managing Director, a Vice President
(however denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one of the Assistant Treasurers or Assistant Secretaries of the
Depositor or the Servicer, or (b), if provided for in this Agreement, signed by
a Servicing Officer, as the case may be, and delivered to the Depositor and the
Trustee, as the case may be, as required by this Agreement.
Opinion of Counsel
A written opinion of counsel, who may be counsel for the
Depositor or the Servicer, including, in-house counsel, reasonably acceptable to
the Trustee; provided, however, that with respect to the interpretation or
application of the REMIC Provisions, such counsel must (a) in fact be
independent of the Depositor and the Servicer, (b) not have any direct financial
interest in the Depositor or the Servicer or in any affiliate of either, and (c)
not be connected with the Depositor or the Servicer as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
Optional Termination Date
The first Distribution Date following the date on which the
Optional Termination may be exercised by the Servicer.
Optional Termination
The termination of the trust created hereunder in connection
with the purchase of the Loans pursuant to Section 9.01(a) hereof.
Original Loan
The mortgage loan refinanced in connection with the
origination of a Refinance Loan.
26
OTS
The Office of Thrift Supervision.
Outstanding
With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except (a) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and (b) Certificates in exchange for
which or in lieu of which other Certificates have been executed and delivered by
the Trustee pursuant to this Agreement.
Outstanding Loan
As of any Due Date, a Loan with a Stated Principal Balance
greater than zero, which was not the subject of a Principal Prepayment in Full
prior to such Due Date and which did not become a Liquidated Loan prior to such
Due Date.
Overcollateralization Amount
As of any Distribution Date, (a) the Pool Principal Balance as
of the last day of the immediately preceding Due Period minus (b) the aggregate
Class Certificate Balance of all Classes of Offered Certificates (after taking
into account all distributions of principal on that Distribution Date).
Overcollateralization Deficiency
As of any Distribution Date, the excess, if any, of (a) the
Targeted Overcollateralization Amount for that Distribution Date over (b) the
Overcollateralization Amount for that Distribution Date, calculated for this
purpose after taking into account the reduction on that Distribution Date of the
Class Certificate Balances of all Classes of Offered Certificates resulting from
the distribution of the related Basic Principal Distribution Amount on that
Distribution Date, but prior to taking into account any Applied Realized Loss
Amounts on that Distribution Date.
Overcollateralization Release Amount
With respect to any Distribution Date on or after the Stepdown
Date on which a Trigger Event is not in effect, the lesser of (a) the Principal
Remittance Amount for that Distribution Date and (b) the excess, if any, of (i)
the Overcollateralization Amount for that Distribution Date, assuming that 100%
of the Principal Remittance Amount is applied as a principal payment on the
Certificates on that Distribution Date, over (ii) the Targeted
Overcollateralization Amount for that Distribution Date. With respect to any
Distribution Date before the Stepdown Date or on which a Trigger Event is in
effect, the Overcollateralization Release Amount will be zero.
Ownership Interest
As to any Class R Certificate, any ownership interest in such
Certificate including any interest in such Certificate as the Holder thereof and
any other interest therein, whether direct or indirect, legal or beneficial.
Pass-Through Rate
With respect to each Class of Certificates and each regular
interest in REMIC 1 and REMIC 2, as set forth in the Preliminary Statement.
Paying Agent
________________________ and its successors and, if a
successor paying agent is appointed hereunder, such successor.
27
Percentage Interest
As to any Offered Certificate, the percentage interest
evidenced thereby in distributions required to be made to such Offered
Certificate, 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. With respect to the Class X Certificates and the Class R
Certificates, the "Percentage Interest" specified on the face thereof.
Permitted Investments
(a) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of the United
States; (b) general obligations of or obligations guaranteed by any state of the
United States or the District of Columbia receiving the highest long-term debt
rating of each Rating Agency rating the Offered Certificates, or such lower
rating as will not result in the downgrading or withdrawal of the ratings then
assigned to the Offered Certificates by each such Rating Agency; (c) commercial
or finance company paper which is then receiving the highest commercial or
finance company paper rating of each such Rating Agency, or such lower rating as
will not result in the downgrading or withdrawal of the ratings then assigned to
the Offered Certificates by each such Rating Agency; (d) certificates of
deposit, demand or time deposits, or bankers' acceptances issued by any
depository institution or trust company incorporated under the laws of the
United States or of any state thereof and subject to supervision and examination
by federal and/or state banking authorities, provided that the commercial paper
and/or long term unsecured debt obligations of such depository institution or
trust company (or in the case of the principal depository institution in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company, but only if Xxxxx'x is not a Rating Agency)
are then rated one of the two highest long-term and the highest short-term
ratings of each such Rating Agency for such securities, or such lower ratings as
will not result in the downgrading or withdrawal of the rating then assigned to
the Offered Certificates by any such Rating Agency; (e) demand or time deposits
or certificates of deposit issued by any bank or trust company or savings
institution to the extent that such deposits are fully insured by the FDIC; (f)
guaranteed reinvestment agreements issued by any bank, insurance company or
other corporation containing, at the time of the issuance of such agreements,
such terms and conditions as will not result in the downgrading or withdrawal of
the rating then assigned to the Offered Certificates by any such Rating Agency;
(g) repurchase obligations with respect to any security described in clauses (a)
and (b) above, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (d) above; (h)
securities (other than stripped bonds, stripped coupons or instruments sold at a
purchase price in excess of 115% of the face amount thereof) bearing interest or
sold at a discount issued by any corporation incorporated under the laws of the
United States or any state thereof which, at the time of such investment, have
one of the two highest ratings of each such Rating Agency (except if the Rating
Agency is Moody's or S&P, the rating shall be the highest commercial paper
rating of Moody's or S&P, as applicable, for such securities), or such lower
rating as will not result in the downgrading or withdrawal of the rating then
assigned to the Offered Certificates by any such Rating Agency, as evidenced by
a signed writing delivered by each such Rating Agency; (i) interests in any
money market fund which at the date of acquisition of the interests in the fund
and throughout the time those interests are held in the fund has the highest
applicable rating of each such Rating Agency or such lower rating as will not
result in the downgrading or withdrawal of the ratings then assigned to the
Offered Certificates by each such Rating Agency; (j) short term investment funds
sponsored by any trust company or national banking association incorporated
under the laws of the United States or any state thereof which on the date of
acquisition has been rated by each such Rating Agency in its highest applicable
rating category or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Offered Certificates by each such
Rating Agency; and (k) such other investments having a specified stated maturity
and bearing interest or sold at a discount acceptable to each such Rating Agency
as will not result in the downgrading or withdrawal of the rating then assigned
to the Offered Certificates by any
28
Rating Agency, as evidenced by a signed writing to such effect delivered by each
such Rating Agency; provided that no such instrument shall be a Permitted
Investment if such instrument evidences the right to receive interest only
payments with respect to the obligations underlying such instrument.
Permitted Transferee
Any person other than (a) the United States, any State or
political subdivision thereof, or any agency or instrumentality of any of the
foregoing, (b) a foreign government, International Organization or any agency or
instrumentality of either of the foregoing, (c) an organization (except certain
farmers' cooperatives described in section 521 of the Code) which is exempt from
tax imposed by Chapter 1 of the Code (including the tax imposed by section 511
of the Code on unrelated business taxable income) on any excess inclusions (as
defined in section 860E(c)(l) of the Code) with respect to any Class R
Certificate, (d) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, (e) a Person that is not (i) a citizen or resident of
the United States, (ii) a corporation or partnership (or other entity properly
treated as a corporation or partnership for U.S. federal income tax purposes)
created or organized in or under the laws of the United States or any political
subdivision thereof, (iii) an estate whose income from sources without the
United States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States, or (iv) a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more United States Persons have authority to control all substantial
decisions of the trust, unless such Person listed in clause (i), (ii), (iii) or
(iv) above has furnished the transferor and the Trustee with a duly completed
Internal Revenue Service Form W-8ECI and (f) any other Person so designated by
the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Class R Certificate to such Person may cause any REMIC hereunder
to fail to qualify as one or more REMICs at any time that the Certificates are
outstanding. The terms "United States," "State" and "International Organization"
shall have the meanings set forth in section 7701 of the Code or successor
provisions. A corporation will not be treated as an instrumentality of the
United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such government unit.
Person
Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Plan
As defined in Section 5.02(b)
Pool Principal Balance
With respect to any Distribution Date, the aggregate of the
Stated Principal Balances of the Loans that were Outstanding Loans (including
Loans in foreclosure and REO Properties) on their Due Dates in the related Due
Period.
Popular Financial
Popular Financial Services, LLC, a Delaware limited liability
company.
Popular Funding
Popular Financial Funding, LLC, a Delaware limited liability
company.
29
Preliminary Prospectus Supplement
The Preliminary Prospectus Supplement dated _____________,
20___, relating to the Publicly Offered Certificates.
Post-Stepdown Remaining Principal Distribution Amount
With respect to any Distribution Date is an amount equal to
the Principal Distribution Amount remaining after giving effect to the
distributions set forth in clause (i) of Section 4.02(c) hereof.
Pre-Stepdown Remaining Principal Distribution Amount
With respect to any Distribution Date is an amount equal to
the Principal Distribution Amount remaining after giving effect to the
distributions set forth in clause (i) of Section 4.02(b) hereof.
Prepayment Interest Excess
As to any Principal Prepayment on a Loan received by the
Servicer subsequent to its Due Date in the related Prepayment Period, all
amounts paid by the related Mortgagor in respect of interest on such Principal
Prepayment that are intended to cover the period on and after the Due Date. All
Prepayment Interest Excess shall be paid to the Servicer as additional servicing
compensation.
Prepayment Interest Shortfall
As to any Distribution Date and any Principal Prepayment on a
Loan received by the Servicer on or before its Due Date in the related
Prepayment Period, the amount, if any, by which one month's interest at the
related Adjusted Mortgage Rate on such Principal Prepayment, exceeds the amount
of interest paid in connection with such Principal Prepayment.
Prepayment Period
With respect to any Distribution Date, the calendar month
preceding the month of that Distribution Date.
Primary Mortgage Insurance Policy
Each policy of primary mortgage guaranty insurance or any
replacement policy therefor with respect to any Loan.
Principal Distribution Amount
With respect to any Distribution Date, the sum of (a) the
Basic Principal Distribution Amount for that Distribution Date, (b) the Extra
Principal Distribution Amount for that Distribution Date and (c) the Cap Extra
Principal Distribution Amount for that Distribution Date.
Principal Prepayment
Any payment of principal by a Mortgagor on a Loan that is
received in advance of its scheduled Due Date and is not accompanied by an
amount representing scheduled interest due on any date or dates in any month or
months subsequent to the month of prepayment. Partial Principal Prepayments
shall be applied by the Servicer in accordance with the terms of the related
Mortgage Note.
Principal Prepayment in Full
Any Principal Prepayment made by a Mortgagor of the entire
principal balance of a Loan.
Principal Remittance Amount
As to any Distribution Date, the sum of (a) the principal
portion of each Scheduled Payment due on each Loan on such Loan's Due Date in
the related Due Period and received by the Servicer on or prior to the related
Determination Date, including any Advances with respect thereto,
30
(b) the Stated Principal Balance of each Loan that was sold or repurchased by a
Seller or the Servicer pursuant to this Agreement as of such Distribution Date,
(c) the Substitution Adjustment Amount in connection with any Deleted Loan
received with respect to such Distribution Date, (d) any Insurance Proceeds or
Liquidation Proceeds allocable to recoveries of principal of the Loans that are
not yet Liquidated Loans received during the related Prepayment Period, (e) with
respect to each Loan that became a Liquidated Loan during the related Prepayment
Period, the amount of Liquidation Proceeds allocable to principal received
during the related Prepayment Period with respect to such Loan, (f) all
Principal Prepayments on the Loans received during the related Prepayment
Period, (g) on the Distribution Date on which the Trust Fund is to be terminated
in accordance with Section 9.01 hereof that portion of the Termination Price
allocable to principal of the Loans, and (h) all Recoveries relating to
Liquidated Loans received during the related Prepayment Period, if any.
Prospectus Supplement
The Prospectus Supplement dated ________________, 20___,
relating to the Publicly Offered Certificates.
Publicly Offered Certificates
The Senior Certificates and the Class []-[], Class []-[],
Class []-[], Class []-[], Class []-[] and Class []-[] Certificates.
Purchase Price
With respect to any Loan required to be repurchased by a
Seller pursuant to Section 2.02 or 2.03 hereof, or purchased at the option of
the Servicer pursuant to Section 3.11 hereof, an amount equal to the sum of (a)
100% of the Stated Principal Balance of the Loan on the date of such purchase,
(b) accrued interest thereon at the applicable Mortgage Rate (or at the
applicable Adjusted Mortgage Rate if (i) the purchaser is the Servicer or (ii)
the purchaser is a Seller and Equity One-Delaware is the Servicer) from the date
through which interest was last paid by the Mortgagor or advanced (and not
reimbursed) by the Servicer to the Determination Date in the month in which the
Purchase Price is to be distributed to Certificateholders, and (c) any costs and
damages incurred by the Trust Fund in connection with such Loan.
PTCE 95-60
As defined in Section 5.02(b).
Rating Agency
Moody's and S&P. If any of these organizations or a successor
thereof is no longer in existence, "Rating Agency" shall be such nationally
recognized statistical rating organization, or other comparable Person, as is
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss Amount
With respect to each Distribution Date, the excess, if any, of
(a) the aggregate of the Class Certificate Balances of the Offered Certificates
(after giving effect to all distributions on such Distribution Date) over (b)
the Pool Principal Balance at the end of the related Due Period.
Realized Losses
With respect to any Distribution Date, the sum of (a) the
aggregate amount, if any, by which (i) the outstanding principal balance of each
Loan that became a Liquidated Loan during the related Prepayment Period (such
principal balance determined immediately before such Loan became a Liquidated
Loan) exceeds (ii) the Liquidation Proceeds allocable to principal received
during the related
31
Prepayment Period in connection with the liquidation of such Loan which have not
theretofore been used to reduce the Stated Principal Balance of such Loan, and
(b) any Deficient Valuations.
Realized Loss Amortization Amount
With respect to (a) the Class []-[] Certificates, the sum of
the Class []-[] Realized Loss Amortization Amount and the Cap Class []-[]
Realized Loss Amortization Amount, (b) the Class []-[] Certificates, the sum of
the Class []-[] Realized Loss Amortization Amount and the Cap Class []-[]
Realized Loss Amortization Amount, (c) the Class []-[] Certificates, the sum of
the Class []-[] Realized Loss Amortization Amount and the Cap Class []-[]
Realized Loss Amortization Amount, (d) the Class []-[] Certificates, the sum of
the Class []-[] Realized Loss Amortization Amount and the Cap Class []-[]
Realized Loss Amortization Amount, (e) the Class []-[] Certificates, the sum of
the Class []-[] Realized Loss Amortization Amount and the Cap Class []-[]
Realized Loss Amortization Amount, (f) the Class []-[] Certificates, the sum of
the Class []-[] Realized Loss Amortization Amount and the Cap Class []-[]
Realized Loss Amortization Amount, (g) the Class []-[] Certificates, the sum of
the Class []-[] Realized Loss Amortization Amount and the Cap Class []-[]
Realized Loss Amortization Amount, (h) the Class []-[] Certificates, the sum of
the Class []-[] Realized Loss Amortization Amount and the Cap Class []-[]
Realized Loss Amortization Amount and (i) the Class []-[] Certificates, the sum
of the Class []-[] Realized Loss Amortization Amount and the Cap Class []-[]
Realized Loss Amortization Amount.
Record Date
With respect to the Offered Certificates and any Distribution
Date, the close of business on the Business Day immediately preceding such
Distribution Date.
Recovery
With respect to any Distribution Date and Loan that became a
Liquidated Loan in a month preceding the month prior to the Distribution Date,
an amount received in respect of principal on such Loan which has previously
been allocated as a Realized Loss to a Class or Classes of Certificates, net of
reimbursable expenses.
Reference Banks
Any three (3) major banks engaged in transactions in
Eurodollar deposits in the international Eurocurrency market selected by the
Trustee after consultation with the Servicer.
Regulation AB
Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17
C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
Refinance Loan
Any Loan originated for the purpose of refinancing an existing
mortgage loan.
Relief Act
The Servicemembers Civil Relief Act, as amended.
Relief Act Reductions
With respect to any Distribution Date and any Loan as to which
there has been a reduction in the amount of interest collectible thereon for the
most recently ended calendar month as a result of the application of the Relief
Act, the amount, if any, by which (a) interest collectible on such
32
Loan for the most recently ended calendar month is less than (b) interest
accrued thereon for such month pursuant to the Mortgage Note without taking into
account the application of the Relief Act.
Remaining Excess Interest Amount
With respect to any Distribution Date, the Monthly Excess
Cashflow Amount remaining after giving effect to the distributions set forth in
clauses (i) through (xxxiv) of Section 4.02(d) for that Distribution Date.
Remaining Interest Remittance Amount
With respect to any Distribution Date, an amount equal to the
Interest Remittance Amount remaining after giving effect to the distributions
set forth in clause (i) of Section 4.02(a).
Remaining Overcollateralization Release Amount
With respect to any Distribution Date, (a) on or after the
Stepdown Date on which a Trigger Event is not in effect, the lesser of (i) the
Monthly Excess Cashflow Amount remaining after giving effect to the
distributions set forth in clauses (i) through (xxxi) of Section 4.02(d) for
that Distribution Date and (ii) the Overcollateralization Release Amount for
that Distribution Date or (b) before the Stepdown Date or on which a Trigger
Event is in effect, zero.
Remaining Principal Distribution Amount
With respect to any Distribution Date, the sum of (a) the
Pre-Stepdown Remaining Principal Distribution Amount remaining after the
distributions set forth in clause (ii)(A) through (ii)(I) of Section 4.02(b) and
(b) the Post-Stepdown Remaining Principal Distribution Amount remaining after
the distributions set forth in clauses (ii)(A) through (ii)(I) of Section
4.02(c), each for that Distribution Date.
REMIC
A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.
REMIC 1
As defined in the Preliminary Statement.
REMIC 2
As defined in the Preliminary Statement.
REMIC 1 Accrual Class
As defined in the Preliminary Statement.
REMIC Change of Law
Any proposed, temporary or final regulation, revenue ruling,
revenue procedure or other official announcement or interpretation relating to
REMICs and the REMIC Provisions issued after the Closing Date.
REMIC Provisions
Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at sections 860A through 860G
of part IV of subchapter M of chapter 1 of subtitle A 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.
33
REO Property
A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Loan.
Request for Release
The Request for Release submitted by the Servicer to the
Trustee, substantially in the form of Exhibit J.
Required Insurance Policy
With respect to any Loan, any insurance policy that is
required to be maintained from time to time under this Agreement.
Responsible Officer
When used with respect to the Trustee, any officer assigned to
the Corporate Trust Division of the Trustee (or any successor thereto),
including any Vice President, any Assistant Vice President, the Secretary, any
Assistant Secretary, any Trust Officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
this Agreement.
Rule 144A Letter
As defined in Section 5.02(b).
Scheduled Payment
The scheduled monthly payment on a Loan due on any Due Date
allocable to principal and/or interest on such Loan.
Second Lien Loan
Any Loan secured by a mortgage that is second in lien
priority.
Securities Act
The Securities Act of 1933, as amended.
Sellers
Collectively, the following entities, their successors and
assigns, each in its capacity as a Seller of the Loans to the Depositor:
_________________; __________________; ________________; _________________; and
____________________.
Senior Certificates
The Class []-[], Class []-[], Class []-[] and Class []-[]
Certificates.
Senior Enhancement Percentage
With respect to any Distribution Date, the percentage obtained
by dividing (a) the sum of (i) the aggregate Class Certificate Balance of the
Subordinate Certificates and (ii) the Overcollateralization Amount, in each case
before taking into account the distribution of the Principal Distribution Amount
on that Distribution Date by (b) the Pool Principal Balance as of the last day
of the related Due Period.
Senior Principal Distribution Amount
As of any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect, the lesser of (i) the Principal
Distribution Amount for that Distribution Date and (ii) the excess, if any, of
(A) the sum of the Class Certificate Balances of the Senior Certificates
immediately
34
prior to that Distribution Date over (B) the lesser of (1) the product of (x)
[]% and (y) the Pool Principal Balance as of the last day of the related Due
Period and (2) the Pool Principal Balance as of the last day of the related Due
Period minus the product of (x) []% and (y) the Cut-off Date Pool Principal
Balance.
Senior Specified Enhancement Percentage
As of any date of determination thereof, []%.
Servicer
Equity One, Inc., a Delaware corporation, and its successors
and assigns, in its capacity as servicer hereunder.
Servicer Advance Date
As to any Distribution Date, the 18th day of the month in
which such Distribution Date occurs, or if such day is not a Business Day, the
next succeeding Business Day.
Servicing Advances
All customary, reasonable and necessary "out of pocket" costs
and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of a Mortgaged Property, (b) the foreclosure,
trustee's sale, or other liquidation of any Mortgage or Mortgaged Property, (c)
any expenses reimbursable to the Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, (d) the management
and liquidation of any REO Property, (e) compliance with the obligations
described in Section 3.06 and (f) any payments made by the Servicer pursuant to
Section 3.09.
Servicing Amount
The sum of (a) the Servicing Fee, (b) unreimbursed Advances
and (c) unreimbursed Servicing Advances.
Servicing Criteria
The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time, or those Servicing
Criteria otherwise mutually agreed to by the Depositor and the applicable Person
in response to evolving interpretations of Regulation AB.
Servicing Fee
As to each Loan and any Distribution Date, an amount payable
out of each full payment of interest received on such Loan and equal to
one-twelfth of the Servicing Fee Rate multiplied by the Stated Principal Balance
of such Loan as of the Due Date in the month of such Distribution Date (prior to
giving effect to any Scheduled Payments due on such Loan on such Due Date),
subject to reduction as provided in Section 3.13.
Servicing Fee Rate
With respect to each Loan, []% per annum.
Servicing Officer
Any officer of the Servicer involved in, or responsible for,
the administration and servicing of the Loans whose name and facsimile signature
appear on a list of servicing officers furnished to the Trustee by the Servicer
on the Closing Date pursuant to this Agreement, as such list may from time to
time be amended.
35
S&P
Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. For purposes of Section 10.05(b) the address for
notices to S&P shall be Standard & Poor's Ratings Services, 00 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Surveillance, or such other address as S&P may hereafter furnish to the
Depositor and the Servicer.
Startup Day
The Closing Date.
Stated Principal Balance
As to any Loan, the unpaid principal balance of such Loan as
of its most recent Due Date as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any moratorium or similar waiver or grace period) after giving effect
to any previous partial Principal Prepayments and Liquidation Proceeds allocable
to principal (other than with respect to any Liquidated Loan) and to the payment
of principal due on such Due Date and irrespective of any delinquency in payment
by the related Mortgagor.
Stepdown Date
The earlier of (a) the Distribution Date on which the Class
Certificate Balances of the Senior Certificates have been reduced to zero or (b)
the later to occur of (i) the Distribution Date in ____________ 20___ (the 37th
Distribution Date) or (ii) the first Distribution Date on which the Senior
Enhancement Percentage is greater than or equal to the Senior Specified
Enhancement Percentage.
Subordinate Certificates
The Class []-[], Class []-[], Class []-[], Class []-[], Class
[]-[], Class []-[], Class []-[], Class []-[] and Class []-[] Certificates.
Subservicer
Any person to whom the Servicer has contracted for the
servicing of all or a portion of the Loans pursuant to Section 3.02.
Substitute Loan
A Loan substituted by a Seller for a Deleted Loan(s) which
must, on the date of such substitution, as confirmed in a Request for Release,
substantially in the form of Exhibit J, (a) have a Stated Principal Balance not
in excess of, and not more than 10% less than, the Stated Principal Balance(s)
of the Deleted Loans (such Stated Principal Balances to be measured as of the
respective Due Dates in the month of substitution); (b) have an interest rate
that is determined in the same manner as that of the Deleted Loans(s); (c) have
a Mortgage Rate not lower than, and not more than 1% per annum higher than, that
of the Deleted Loan(s); (d) have a Combined Loan-to-Value Ratio not higher than
that of the Deleted Loan(s); (e) have a debt to income ratio not higher than
that of the Deleted Loan(s); (f) have been originated pursuant to the same
underwriting standards as the Deleted Loan(s); (g) have a remaining term to
maturity not greater than, and not more than one year less than, that of the
Deleted Loan(s); and (h) comply, as of the date of substitution, with each
representation and warranty set forth or referred to in Section 2.03.
Substitution Adjustment Amount
The meaning ascribed to such term pursuant to Section 2.03.
Targeted Overcollateralization Amount
As of any Distribution Date, (a) prior to the Stepdown Date,
the sum of (i) []% of the Cut-off Date Pool Principal Balance and (ii) the
Aggregate Class [] Early Distribution Amount, and (b) on
36
and after the Stepdown Date, the lesser of (i) the sum of (A) []% of the Cut-off
Date Pool Principal Balance and (B) the Aggregate Class [] Early Distribution
Amount and (ii) the greater of (A) the excess of (I) []% of the Pool Principal
Balance as of the last day of the related Due Period over (II) the excess of (x)
the sum of the Class Certificate Balances of the Class []-[], Class []-[] and
Class []-[] Certificates as of the Closing Date over (y) the aggregate of
distributions made in respect of principal to the Class []-[], Class []-[] and
Class []-[] Certificates on all prior Distribution Dates and (B) []% of the
Cut-off Date Pool Principal Balance. With respect to any Distribution Date on
which a Trigger Event is in effect, the Targeted Overcollateralization Amount
will be equal to the Targeted Overcollateralization Amount for the immediately
preceding Distribution Date (after taking into account any distributions of the
Aggregate Class [] Early Distribution Amount on the immediately preceding
Distribution Date).
Tax Matters Person
The person designated as "tax matters person" in the manner
provided under Treasury regulation ss.1.860F-4(d) and temporary Treasury
regulation ss.301.6231(a)(7)-1T. Initially, the Tax Matters Person shall be the
Trustee.
Tax Matters Person Certificate
The Class R Certificate with a Denomination of .00001%.
Termination Price
As defined in Section 9.01.
Transfer
Any direct or indirect transfer or sale of any Ownership
Interest in a Class R Certificate.
Transfer Affidavit
As defined in Section 5.02(c).
Transferor Certificate
As defined in Section 5.02(b).
Trigger Event
With respect to any Distribution Date, if (a) the six-month
rolling average of 60+ Day Delinquent Loans equals or exceeds []% of the Senior
Enhancement Percentage or (b) the aggregate amount of Realized Losses incurred
since the Cut-off Date through the last day of the calendar month immediately
preceding that Distribution Date divided by the Cut-off Date Pool Principal
Balance exceeds the applicable percentages set forth below with respect to that
Distribution Date:
-----------------------------------------------------------------------------------------------
Distribution Date Occurring In Percentage
-------------------------------------------- --------------------------------------------------
________ 20___ - _______ 20___ []% (or []% if the Class Certificate Balances of
the Class []-[], Class []-[] and Class []-[]
Certificates have been reduced to zero and no
part of that reduction was due to the
application of Realized Losses) for the first
month plus an additional 1/12th of []% for each
month thereafter (or 1/12th of []% if the Class
Certificate Balances of the Class []-[], Class
[]-[] and Class []-[] Certificates have been
reduced to zero and no part of that reduction
was due to the application of Realized Losses)
for each month thereafter;
-------------------------------------------- --------------------------------------------------
_________ 20__ - _________ 20__ []% (or []% if the Class Certificate Balances of
the Class []-[], Class []-[] and Class []-[]
Certificates have been reduced to zero and no
part of that reduction was due to the
37
-------------------------------------------- --------------------------------------------------
application of Realized Losses) for the first
month plus an additional 1/12th of []% (or
1/12th of []% if the Class Certificate Balances
of the Class []-[], Class []-[] and Class []-[]
Certificates have been reduced to zero and no
part of that reduction was due to the
application of Realized Losses) for each month
thereafter;
-------------------------------------------- --------------------------------------------------
___________ 20__ - _______ 20__ []% (or []% if the Class Certificate Balances of
the Class []-[], Class []-[] and Class []-[]
Certificates have been reduced to zero and no
part of that reduction was due to the
application of Realized Losses) for the first
month plus an additional 1/12th of []% (or
1/12th of []% if the Class Certificate Balances
of the Class []-[], Class []-[] and Class []-[]
Certificates have been reduced to zero and no
part of that reduction was due to the
application of Realized Losses) for each month
thereafter;
-------------------------------------------- --------------------------------------------------
_________ 20__ - ________ 20___ []% (or []% if the Class Certificate Balances of
the Class []-[], Class []-[] and Class []-[]
Certificates have been reduced to zero and no
part of that reduction was due to the
application of Realized Losses) for the first
month plus an additional 1/12th of []% (or
1/12th of []% if the Class Certificate Balances
of the Class []-[], Class []-[] and Class []-[]
Certificates have been reduced to zero and no
part of that reduction was due to the
application of Realized Losses) for each month
thereafter;
-------------------------------------------- --------------------------------------------------
________ 20__ - _________ 20__ []% (or []% if the Class Certificate Balances of
the Class []-[], Class []-[] and Class []-[]
Certificates have been reduced to zero and no
part of that reduction was due to the
application of Realized Losses) for the first
month plus an additional 1/12th of []% (or
1/12th of []% if the Class Certificate Balances
of the Class []-[], Class []-[] and Class []-[]
Certificates have been reduced to zero and no
part of that reduction was due to the
application of Realized Losses) for each month
thereafter;
-------------------------------------------- --------------------------------------------------
____________ 20__ and thereafter []% (or []% if the Class Certificate Balances of
the Class []-[], Class []-[] and Class []-[]
Certificates have been reduced to zero and no
part of that reduction was due to the
application of Realized Losses).
-------------------------------------------- --------------------------------------------------
Trustee
______________________ and its successors and, if a successor
trustee is appointed hereunder, such successor.
Trustee Fee
As to any Distribution Date, an amount equal to one-twelfth of
the Trustee Fee Rate multiplied by the Pool Principal Balance as of such
Distribution Date.
Trustee Fee Rate
With respect to each Loan, []% per annum.
Trust Fund
The corpus of the trust created hereunder and referred to in
the Prospectus Supplement as the "Issuing Entity" consisting of (a) the Loans
(including, without limitation, the Mortgage Files relating
38
thereto), and all interest, principal and other amounts received, or receivable,
on or with respect thereto on and after the Cut-off Date to the extent not
applied in computing the Cut-off Date Principal Balance thereof and all interest
and principal payments on such Loans received prior to the Cut-off Date in
respect of installments of interest and principal due thereafter; (b) the
Certificate Account, the Distribution Account, the Net WAC Cap Account, the Cap
Reserve Fund, the Corridor Reserve Fund and all amounts deposited therein
pursuant to the applicable provisions of this Agreement; (c) property that
secured a Loan and has been acquired by foreclosure, deed-in-lieu of foreclosure
or otherwise; (d) the Master Agreement; (e) such other rights and property as
are held in trust hereunder by the Trustee for the benefit of the
Certificateholders; and (f) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing.
Trustee Permitted Withdrawal Amount
Means an aggregate amount not to exceed (a) with respect to
costs associated with the transitioning of servicing, $75,000 per servicing
transition event and (b) with respect to amounts (other than the Trustee Fee)
which are payable to the Trustee pursuant to Section 8.05 hereof, $150,000 per
annum.
Unpaid Realized Loss Amount
For any Class of Subordinate Certificates and as to any
Distribution Date, the excess of (a) the cumulative amount of Applied Realized
Loss Amounts with respect to that Class for all prior Distribution Dates over
(b) the cumulative amount of Realized Loss Amortization Amounts with respect to
that Class for all prior Distribution Dates.
Underwriter Exemption
Prohibited Transaction Exemption 2002-41, 67 Fed Reg. 54487
(August 22, 2002), or any successor thereto.
Underwriters
________________________ and ________________________
Voting Rights
The portion of the voting rights of all of the Certificates,
which is allocated to any Certificate. With respect to any date of
determination, the Offered Certificates shall be allocated 100% of all Voting
Rights. The Voting Rights allocated to each Class of the Offered Certificates
shall be the fraction, expressed as a percentage, the numerator of which is the
Class Certificate Balance of such Class then outstanding and the denominator of
which is the aggregate Stated Principal Balance of the Loans then outstanding.
The Voting Rights allocated to each Class of Certificates shall be allocated
among the Certificates of each such Class in accordance with their respective
Percentage Interests. The Class X and the Class R Certificates will not have any
Voting Rights.
ARTICLE II
CONVEYANCE OF LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Loans.
(a) Subject to its substitution and repurchase obligations
hereunder, each Seller, concurrently with the execution and delivery hereof,
hereby irrevocably sells, transfers, grants, bargains, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest
39
of such Seller in and to that portion of the Loans (including, without
limitation, the Mortgage Files relating thereto) listed on the Loan Schedule
that pertains to such Seller, including (i) all interest and principal received
or receivable by such Seller on or with respect to such Loans after the Cut-off
Date and all interest and principal payments on such Loans received on or prior
to the Cut-off Date in respect of installments of interest and principal due
thereafter, but not including payments of principal and interest due and payable
on such Loans on or before the Cut-off Date, and (ii) all Principal Prepayments,
Liquidation Proceeds and other unscheduled payments received or receivable on
the Loans on the Cut-off Date. On or prior to the Closing Date, each Seller
shall deliver to the Depositor or, at the Depositor's direction, to the Trustee
or other designee of the Depositor, the Mortgage File for each Loan listed in
that portion of the Loan Schedule that pertains to such Seller. Such delivery of
the Mortgage Files shall be made against payment by the Depositor of the
purchase price, previously agreed to by such Seller and the Depositor, for the
Loans listed on the Loan Schedule that pertain to such Seller. With respect to
any Loan that does not require the first payment of principal or interest
thereon to be made on or before such Loan's Due Date in the month prior to the
first Distribution Date, such Seller shall deposit into the Certificate Account
on the Closing Date, an amount equal to one month's interest at the related
Mortgage Rate on the Cut-off Date Principal Balance of such Loan (the "INITIAL
CERTIFICATE ACCOUNT DEPOSIT"). The Sellers, for the benefit of the Depositor,
shall, in connection with the conveyance described in this Section 2.01(a),
deliver to the Depositor on or prior to the Closing Date the financing
statements described in Schedule VI. The Sellers shall also arrange for the
delivery to the Depositor or its assignee, as applicable, of any appropriate
Uniform Commercial Code continuation statements as may be necessary in
connection with the financing statements referenced in the foregoing sentence.
(b) The Depositor, concurrently with the execution and
delivery hereof, hereby irrevocably sells, transfers, grants, bargains, assigns,
sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund together with the Depositor's right to
require the Sellers (and Equity One-Delaware) to cure any breach of a
representation or warranty made herein by the Sellers or to repurchase or
substitute for any affected Loan in accordance with the provisions hereof. In
addition, the Depositor, for the benefit of the Trustee and the
Certificateholders, shall, in connection with the conveyance described in this
Section 2.01(b), deliver to the Trustee on or prior to the Closing Date the
financing statements described in Schedule VII. The Depositor shall also arrange
for the delivery to the Trustee of any appropriate Uniform Commercial Code
continuation statements as may be necessary in connection with the financing
statements referenced in the foregoing sentence.
(c) In connection with the sale, transfer and assignment set
forth in clause (b) above, the Depositor has delivered or caused to be delivered
to the Trustee or a Custodian for the Trustee on or before the Closing Date, or
shall deliver or cause to be delivered to the Trustee or a Custodian for the
Trustee on or before such later date as is set forth below, for the benefit of
the Certificateholders the following documents or instruments with respect to
each Loan so sold, transferred and assigned:
(i) the original Mortgage Note endorsed (by manual or
facsimile signature) as follows: "Pay to the order of
______________________ as trustee for the benefit of the
Certificateholders of Popular ABS, Inc. Mortgage Pass-Through
Certificates Series []-[] without recourse," with all
intervening endorsements and all riders and modifications
showing a complete chain of endorsement from the originator to
the Person endorsing it to the Trustee (each such endorsement
being sufficient to transfer all right, title and interest of
the party so endorsing, as noteholder or assignee thereof, in
and to that Mortgage Note);
(ii) except as provided below, the original recorded
Mortgage;
40
(iii) an original recorded assignment of the Mortgage
(which may be included in a blanket assignment or
assignments), duly executed by the appropriate Seller and the
Depositor, which assignment will not be delivered on or before
the Closing Date, but shall be delivered within the time
period set forth in this Section 2.01, together with, except
as provided below, all interim recorded assignments of such
Mortgage, if any, all riders or modifications to such
Mortgage, if any, (each such assignment to be in recordable
form and sufficient to effect the assignment of and transfer
to the assignee thereof, under the Mortgage to which the
assignment relates, with the original to be recorded by the
Servicer as follows: the Servicer shall promptly send such
assignments for recording, and shall return the original
recorded assignment to the Trustee once returned as recorded
by the applicable recording office);
(iv) the original of each assumption, modification,
written assurance or substitution agreement, if any; and
(v) except as provided below, the original or
duplicate original lender's title policy and all riders
thereto.
Notwithstanding the foregoing, in lieu of providing the
documents described in clause (iii) above, the Depositor may at its discretion
provide evidence that the related Mortgage is held through the MERS (R) System.
With respect to any MOM Loan, the original recorded Mortgage that is provided
shall note the MIN of such MOM Loan. Certain Mortgages were or may be, at the
sole discretion of the Servicer, originally recorded in the name of MERS (R),
solely as nominee for the applicable Seller and its successors or assigns;
furthermore, subsequent assignments of such Mortgages were or may be, at the
sole discretion of the Servicer, registered electronically through the MERS (R)
System. For certain other Loans, (i) the Mortgage was recorded in the name of
the Seller, (ii) record ownership was later assigned to MERS (R), solely as
nominee for that Seller, and (iii) subsequent assignments of the Mortgage were
or may be, at the sole discretion of the Servicer, registered electronically
through the MERS (R) System. For each of these Loans, MERS (R) serves as
mortgagee of record on the Mortgage solely as a nominee in an administrative
capacity on behalf of the Trustee, and does not have any beneficial interest in
the Loan.
In the event that in connection with any Loan the Depositor
cannot deliver (a) the original recorded Mortgage, (b) all interim recorded
assignments, if any, or (c) the lender's title policy (together with all riders
thereto) satisfying the requirements of clause (ii), (iii) or (v) above,
respectively, concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable public
recording office in the case of clause (ii) or (iii) above, or because the title
policy has not been delivered to either the Servicer or the Depositor by the
applicable title insurer in the case of clause (v) above, and, in the case of
the assignments, if any, of the Mortgage to the Trustee as required under (iii)
above, the Depositor shall promptly deliver to the Trustee, in the case of
clause (ii) or (iii) above, such original recorded Mortgage or such original
recorded assignment, if any, as the case may be, with evidence of recording
indicated thereon upon receipt thereof from the public recording office, or a
copy thereof, certified, if appropriate, by the relevant recording office, but
in no event shall any such delivery of the original recorded Mortgage and each
such original recorded assignment, if any, or a copy thereof, certified, if
appropriate, by the relevant recording office, and each title policy as required
by clause (v) above be made later than one year following the Closing Date;
provided, however, in the event the Depositor is unable to deliver within one
year following the Closing Date, each original recorded Mortgage, and each such
original recorded assignment, if any, or each such title policy by reason of the
fact that any such documents have not been returned by the appropriate recording
office, or, in the case of each such assignment, if any, because the related
original recorded Mortgage or any related interim
41
recorded assignment have not been returned by the appropriate recording office
or, in the case of each title policy, because the title insurer has not received
the recording information from the appropriate recording office for such
original recorded Mortgage or original recorded assignment, if any, has not been
returned by the appropriate recording office, the Depositor shall deliver such
documents to the Trustee as promptly as possible upon receipt thereof and, in
any event, within 720 days following the Closing Date. The Depositor shall
forward or cause to be forwarded to the Trustee (a) from time to time additional
original documents evidencing an assumption or modification of a Loan and (b)
any other documents required to be delivered by the Depositor or the Servicer to
the Trustee. In the event that the original recorded Mortgage is not delivered
and, in connection with the payment in full of the related Loan, the public
recording office requires the presentation of a "lost instruments affidavit and
indemnity" or any equivalent document, because only a copy of the Mortgage can
be delivered with the instrument of satisfaction or reconveyance, the Servicer
shall execute and deliver or cause to be executed and delivered such a document
to the public recording office. In the case where a public recording office
retains the original recorded Mortgage or in the case where an original recorded
Mortgage is lost after recordation in a public recording office, the appropriate
Seller shall deliver to the Trustee a copy of such Mortgage certified by such
public recording office to be a true and complete copy of the original recorded
Mortgage.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within thirty (30) days thereafter, the Servicer
shall (i) affix the Trustee's name to each assignment of Mortgage, if any, as
the assignee thereof as Trustee for the benefit of the Certificateholders, (ii)
cause such assignment, if any, to be in proper form for recording in the
appropriate public office for real property records and (iii) cause to be
delivered for recording in the appropriate public office for real property
records the assignments, if any, of the Mortgages to the Trustee, except that,
with respect to any assignments of Mortgages as to which the information
required to prepare such assignment in recordable form has not yet been
received, the Servicer's obligation to do so and to deliver the same for such
recording shall be as soon as practicable after receipt of such information and
in any event within thirty (30) days after receipt thereof.
In the case of Loans that have been prepaid in full as of the
Closing Date, the Depositor, in lieu of delivering the above documents to the
Trustee, will deposit in the Certificate Account the portion of such payment
that is required to be deposited in the Certificate Account pursuant to Section
3.05 hereof.
(d) The Depositor, the Sellers, the Servicer and the Trustee understand
and agree that it is not intended that any Loan be included in the Trust Fund
that is a "High-Cost Home Loan" as defined by the Homeownership and Equity
Protection Act of 1994 or any other applicable predatory or abusive lending
laws.
SECTION 2.02. Acceptance by Trustee of the Trust Fund.
The Trustee acknowledges receipt of the documents identified
in the initial certification in the form annexed hereto as Exhibit D and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and that it holds or will hold
such other assets as are included in the Trust Fund, in trust for the exclusive
use and benefit of all present and future Certificateholders. The Trustee
acknowledges that it will maintain possession of the Mortgage Notes in the State
of ___________, unless otherwise permitted by the Rating Agencies. In the event
that the Trustee desires to maintain possession of the Mortgage Notes in a state
(other than the State of ________) constituting one of the United States of
America, the Trustee shall, at least thirty (30) days prior to discontinuing
possession of the Mortgage Notes in the State of __________, provide (i) a
notice of such
42
intention to the Rating Agencies and the Sellers and (ii) an Opinion of Counsel
stating that such relocation of the Mortgage Notes and the possession by the
Trustee of the Mortgage Notes in such other state will not (a) destroy or impair
the perfection by the Trustee of the security interests assigned and granted to
the Trustee pursuant to the provisions of Section 10.04 or (b) subject any REMIC
to any state tax.
The Trustee agrees to execute and deliver on the Closing Date
to the Depositor, the Servicer and the Sellers an initial certification in the
form annexed hereto as Exhibit D. Based on its review and examination, and only
as to the documents identified in such initial certification, the Trustee shall
acknowledge that such documents appear regular on their face and relate to the
Loans listed in the Loan Schedule or shall indicate any noted deviations. The
Trustee, at the time of delivery of the initial certification, shall be under no
duty or obligation (i) to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face or (ii) to determine whether the
Mortgage File shall include any of the documents listed in Section 2.01(c),
except for the Mortgage Note. Should there be any exceptions to the Trustee's
initial certification as to the Mortgage Notes, the appropriate Seller shall
have thirty (30) days from the Closing Date to cure such exception or deliver a
Mortgage File or Mortgage Files for a Substitute Loan or Substitute Loans in
accordance with Section 2.03(c). A Seller may cure an exception based on absence
of a Mortgage Note for a Loan by delivering an executed copy of an Affidavit of
Lost Note in the form attached as Annex I to Exhibit D hereto to the Trustee.
Not later than 90 days after the Closing Date, the Trustee
shall deliver to the Depositor, the Servicer and the Sellers a final
certification in the form annexed hereto as Exhibit E, with any applicable
exceptions noted thereon. At any time upon request (but not more frequently than
once per calendar month), the Trustee shall deliver to the Depositor, the
Servicer and the Sellers, an updated schedule of open exceptions in electronic
or written format.
If the Trustee finds any document constituting a part of a
Mortgage File which does not meet the requirements of Section 2.01, the Trustee
shall list such as an exception in the final certification; provided, however
that the Trustee shall not make any determination as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or is sufficient to effect the
assignment of and transfer to the assignee thereof under the mortgage to which
the assignment relates. In performing any such review, the Trustee may
conclusively rely on the Depositor as to the purported genuineness of any such
document and any signature thereon. It is understood that the scope of the
Trustee's review of the Mortgage Files is limited solely to confirming that the
documents listed in Section 2.01(c) have been received and further confirming
that any and all documents delivered pursuant to Section 2.01(c) have been
executed and relate to the Loans identified in the Loan Schedule. The Trustee
shall have no responsibility for determining whether any document is valid and
binding, whether the text of any assignment or endorsement is in proper or
recordable form, whether any document has been recorded in accordance with the
requirements of any applicable jurisdiction, or whether a blanket assignment is
permitted in any applicable jurisdiction. The appropriate Seller shall promptly
correct or cure such defect within 90 days from the date it was so notified of
such defect and, if such Seller does not correct or cure such defect within such
period, such Seller shall either (a) substitute for the related Loan a
Substitute Loan, which substitution shall be accomplished in the manner and
subject to the conditions set forth in Section 2.03, or (b) purchase such Loan
from the Trustee within 90 days from the date such Seller was notified of such
defect in writing at the Purchase Price of such Loan; provided, however, that in
no event shall such substitution or purchase occur more than 540 days from the
Closing Date, except that if the substitution or purchase of a Loan pursuant to
this provision is required by reason of a delay in
43
delivery of any comments by the appropriate recording office, and there is a
dispute between either the Servicer or such Seller and the Trustee over the
location or status of the recorded document, then such substitution or purchase
shall occur within 720 days from the Closing Date; provided, that any Loan that
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code shall be subject to a substitution or repurchase as
provided in Section 2.05(b) of this Agreement. The Trustee shall deliver a
report to each Rating Agency within 720 days from the Closing Date indicating a
list of all documents in each Mortgage File in the possession of the Trustee.
Any such substitution pursuant to (a) above or purchase pursuant to (b) above
shall not be effected prior to the delivery to the Trustee of the Opinion of
Counsel required by Section 2.05 hereof, if any, and any substitution pursuant
to (a) above shall not be effected prior to the additional delivery to the
Trustee of a Request for Release substantially in the form of Exhibit J. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. The Purchase Price for any such Loan shall be
deposited by such Seller in the Certificate Account on or prior to the
Distribution Account Deposit Date for the Distribution Date in the month
following the month of repurchase and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit J, the Trustee shall
release the related Mortgage File to such Seller and shall execute and deliver
at such Seller's request such instruments of transfer or assignment prepared by
such Seller, in each case without recourse, as shall be necessary to vest in
such Seller, or a designee, the Trustee's interest in any Loan released pursuant
hereto.
If, pursuant to the foregoing provisions, a Seller repurchases
a Loan that is registered on the MERS (R) System, the Servicer shall cause MERS
(R) to execute and deliver an assignment of the related Mortgage in recordable
form to transfer the Mortgage from MERS (R) to such Seller and shall cause such
Mortgage to be removed from registration on the MERS (R) System in accordance
with MERS' (R) rules and regulations or (ii) cause MERS (R) to designate on the
MERS (R) System the Seller as the beneficial holder of such Loan.
The Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions set
forth herein. The Servicer shall promptly deliver to the Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File as come into the possession of the
Servicer from time to time.
It is understood and agreed that the obligation of the
appropriate Seller to substitute for or to purchase any Loan which does not meet
the requirements of Section 2.01 above shall constitute the sole and exclusive
remedy respecting such defect available to the Trustee, the Depositor and any
Certificateholder against any Seller.
SECTION 2.03. Representations, Warranties and Covenants of the
Sellers and the Servicer.
(a) (i) ____________________, _________________,
_______________, ________________ and ______________, in their
capacities as Sellers, hereby make the representations and
warranties set forth in Schedules IIA, IIB and IID through IIF
respectively, and by this reference incorporated herein, to
the Depositor and the Trustee, as of the Closing Date or if so
specified therein, as of the Cut-off Date; and
(ii) The Servicer hereby makes the representations
and warranties set forth in Schedule IIX, and by this
reference incorporated herein, to the Depositor and the
Trustee, as of the Closing Date or if so specified therein, as
of the Cut-off Date.
44
(b) _________________, ____________________, _____________,
_____________ and ______________, in their capacities as Sellers, hereby make
the representations and warranties set forth in Schedules IIIA, IIIB and IIID
through IIIF respectively, and by this reference incorporated herein, to the
Depositor and the Trustee, as of the Closing Date or if so specified therein, as
of the Cut-off Date.
(c) Upon discovery by any of the parties hereto of a breach of
a representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders in any Loan, the
party discovering such breach shall give prompt notice thereof to the other
parties. Each Seller, for itself and not jointly and severally for all other
Sellers, hereby covenants that within 90 days of the earlier of its discovery or
its receipt of written notice from any party of a breach of any representation
or warranty made pursuant to Section 2.03(b) with respect to any Loan listed on
the Loan Schedule that pertains to such Seller, such Seller may, and if such
breach materially and adversely affects the interests of the Certificateholders
such Seller shall, cure such breach in all material respects, and if such breach
is not so cured, may or shall, as the case may be, (i) if such 90-day period
expires prior to the second anniversary of the Closing Date, remove such Loan (a
"DELETED LOAN") from the Trust Fund and substitute in its place a Substitute
Loan, in the manner and subject to the conditions set forth in this Section or
(ii) repurchase the affected Loan or Loans from the Trustee at the Purchase
Price in the manner set forth below; provided, however, that any such
substitution pursuant to (i) above shall not be effected prior to the delivery
to the Trustee of the Opinion of Counsel required by Section 2.05 hereof, if
any, and any such substitution pursuant to (i) above shall not be effected prior
to the additional delivery to the Trustee of a Request for Release substantially
in the form of Exhibit J and the Mortgage File for any such Substitute Loan.
Notwithstanding the preceding sentence, any Loan that does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code shall
be subject to substitution or repurchase as provided in Section 2.05(b) of this
Agreement. The appropriate Seller shall promptly reimburse the Servicer and the
Trustee for any expenses reasonably incurred by the Servicer or the Trustee in
respect of enforcing the remedies for such breach. With respect to the
representations and warranties described in this Section which are made to the
best of a Seller's knowledge, if it is discovered by either the Depositor, the
appropriate Seller or the Trustee that the substance of such representation and
warranty is inaccurate and such inaccuracy materially and adversely affects the
value of the related Loan or the interests of the Certificateholders therein,
notwithstanding such Seller's lack of knowledge with respect to the substance of
such representation or warranty, such inaccuracy shall be deemed a breach by
such Seller of the applicable representation or warranty.
With respect to any Substitute Loan or Loans, such Seller
shall deliver to the Trustee for the benefit of the Certificateholders, the
Mortgage Note, the Mortgage, the related assignment of the Mortgage, if any, and
such other documents and agreements as are required by Section 2.01, with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Substitute Loans in the month of substitution shall not be part of the Trust
Fund and will be retained by the appropriate Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to the relevant
Class will include the monthly payment due on any Deleted Loan for such month
and thereafter the appropriate Seller shall be entitled to retain all amounts
received in respect of such Deleted Loan. The Servicer shall amend the Loan
Schedule for the benefit of the Certificateholders to reflect the removal of
such Deleted Loan and the substitution of the Substitute Loan or Loans and the
Servicer shall deliver the amended Loan Schedule to the Trustee. Upon such
substitution, the Substitute Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the appropriate Seller shall be deemed to have
made with respect to such Substitute Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Section
2.03(b). Upon any such substitution and the deposit to the Certificate Account
of the amount required to be deposited therein
45
in connection with such substitution as described in the following paragraph,
the Trustee shall release the Mortgage File held for the benefit of the
Certificateholders relating to such Deleted Loan to the appropriate Seller and
shall execute and deliver at the appropriate Seller's direction such instruments
of transfer or assignment prepared by such Seller, in each case without
recourse, as shall be necessary to vest title in such Seller, or its designee,
with respect to the Trustee's interest in any Deleted Loan substituted for
pursuant to this Section 2.03.
For any month in which the appropriate Seller substitutes one
or more Substitute Loans for one or more Deleted Loans, the Servicer will
determine the amount (if any) by which the aggregate Stated Principal Balance of
all such Substitute Loans is less than the aggregate Stated Principal Balance of
all such Deleted Loans (such Stated Principal Balances to be measured as of the
respective Due Dates in the month of substitution). The amount of such shortage
(the "SUBSTITUTION ADJUSTMENT AMOUNT") plus an amount equal to the sum of (a)
the aggregate of any unreimbursed Advances with respect to such Deleted Loans
and (b) any costs and damages incurred by the Trust Fund in connection with such
Deleted Loan prior to the date of such substitution shall be deposited in the
Certificate Account by such Seller on or before the Distribution Account Deposit
Date for the Distribution Date in the month following the month during which the
related Loan became required to be purchased or replaced hereunder.
In the event that the appropriate Seller shall have
repurchased a Loan, the Purchase Price therefor shall be deposited in the
Certificate Account pursuant to Section 3.05 on or before the Distribution
Account Deposit Date for the Distribution Date in the month following the month
during which such Seller became obligated hereunder to repurchase or replace
such Loan and upon such deposit of the Purchase Price, the delivery of the
Opinion of Counsel required by Section 2.05 and receipt of a Request for Release
in the form of Exhibit J, the Trustee shall release the related Mortgage File
held for the benefit of the Certificateholders to such Seller, and the Trustee
shall execute and deliver at such Seller's direction such instruments of
transfer or assignment prepared by such Seller, in each case without recourse,
as shall be necessary to transfer title from the Trustee. It is understood and
agreed that the obligation under this Agreement of any Seller to cure,
repurchase or replace any Loan as to which a breach of a representation or
warranty has occurred and is continuing shall constitute the sole and exclusive
remedy against such Sellers respecting such breach of a representation and
warranty available to Certificateholders, the Depositor or the Trustee on their
behalf.
(d) The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the respective Mortgage Files to the
Trustee for the benefit of the Certificateholders.
SECTION 2.03A. Additional Obligations of Equity One-Delaware.
(a) In addition to the representations and warranties made by
Equity One-Delaware in its capacity as a Seller, as described in Section 2.03
and set forth in Schedules IIA and IIIA, Equity One-Delaware hereby represents
and warrants to the Depositor and the Trustee that all of the representations
and warranties of the other Sellers described in Section 2.03 and set forth in
Schedules IIB through IIF and IIIB through IIIF are true and accurate in all
respects.
(b) Equity One-Delaware hereby covenants that it shall comply
with the repurchase and substitution obligations described in Section 2.02 and
2.03 in the event that (i) a breach of any of the representations and warranties
set forth in Schedules IIIB through IIIF occurs and (ii) the related Seller
defaults on its repurchase and substitution obligations under Sections 2.02 and
2.03.
46
SECTION 2.04. Representations and Warranties of the Depositor
as to the Loans
The Depositor hereby represents and warrants to the Trustee
with respect to each Loan that as of the Closing Date, and following the
transfer of the Loans to it by the Sellers, the Depositor had good title to the
Loans and the Mortgage Notes were subject to no offsets, defenses or
counterclaims.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee. Upon discovery by the Depositor or the Trustee of a breach
of any of the foregoing representations and warranties set forth in this Section
2.04, which breach materially and adversely affects the interest of the
Certificateholders, the party discovering such breach shall give prompt written
notice to the other parties and to each Rating Agency.
SECTION 2.05. Delivery of Opinion of Counsel in Connection
with Substitutions.
(a) Notwithstanding any contrary provision of this Agreement,
no substitution pursuant to Section 2.02 or Section 2.03 shall be made more than
90 days after the Closing Date unless the appropriate Seller delivers to the
Trustee an Opinion of Counsel, which Opinion of Counsel shall not be at the
expense of either the Trustee or the Trust Fund, addressed to the Trustee, to
the effect that such substitution will not (i) result in the imposition of the
tax on "prohibited transactions" on the Trust Fund or contributions after the
Startup Day, as defined in Sections 860F(a)(2) and 860G(d) of the Code,
respectively, and/or (ii) cause the Trust Fund to fail to qualify as one or more
REMICs at any time that any Certificates are outstanding.
(b) Upon discovery by the Depositor, the appropriate Seller,
the Servicer or the Trustee that any Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within five (5) Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require the appropriate Seller, at such
Seller's option, to either (i) substitute, if the conditions in Section 2.03(c)
with respect to substitutions are satisfied, a Substitute Loan for the affected
Loan within 90 days from the discovery or (ii) repurchase the affected Loan
within 90 days of such discovery in the same manner as it would repurchase a
Loan for a breach of representation or warranty made pursuant to Section 2.03.
The Trustee shall reconvey to such Seller the Loan to be released pursuant
hereto in the same manner, and on the same terms and conditions, as it would
release a Loan repurchased for breach of a representation or warranty contained
in Section 2.03.
SECTION 2.06. Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment and in
payment therefor, has executed and delivered to or upon the order of the
Depositor, the Certificates in authorized denominations evidencing directly or
indirectly the entire ownership of the Trust Fund. The Trustee agrees to hold
the Trust Fund and exercise the rights referred to above for the benefit of all
present and future Certificateholders and to perform the duties set forth in
this Agreement to the best of its ability, to the end that the interests of the
Certificateholders may be adequately and effectively protected.
SECTION 2.07. REMIC Matters.
The Preliminary Statement sets forth the designations and
"latest possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Day" for purposes of the REMIC Provisions shall be
the Closing Date. The "tax matters person" with respect to each REMIC
47
created hereunder shall be the Trustee and the Trustee shall hold the Tax
Matters Person Certificate. The Trust Fund's fiscal year shall be the calendar
year and, for purposes of section 860C of the Code, the taxable income of each
REMIC created hereunder shall be computed under an accrual method of accounting.
The Trustee shall treat each of the Net WAC Cap Account, the
Cap Reserve Fund and the Corridor Reserve Fund as a separate and distinct
outside reserve fund within the meaning of ss.1.860G-2(h) of the Income Tax
Regulations. None of the Net WAC Cap Account, the Cap Reserve Fund, the Corridor
Reserve Fund or the Master Agreement shall be treated as an asset of any REMIC.
The Trustee shall treat the rights of the Holders of the Offered Certificates to
receive payments in respect of Net WAC Cap Carryover as rights in a limited
recourse interest rate cap contract. The Holders of the Class X Certificates
will own the Net WAC Cap Account. The Trustee will own the Cap Reserve Fund and
the Corridor Reserve Fund. The Offered Certificates shall be treated as
representing ownership of not only a regular interest in a REMIC but also
ownership of an interest in an interest rate cap contract.
The Trustee shall treat the payment of any Net WAC Cap
Carryover as paid first to the Trustee, deposited by the Trustee in the Net WAC
Cap Account and then paid from the Net WAC Cap Account to the relevant Offered
Certificates. The Trustee shall treat the Offered Certificates as "contractual
rights coupled with regular interests" within the meaning of ss.1.860G-2(i) of
the Income Tax Regulations. In determining the issue price of the regular
interests issued to Holders of Offered Certificates, the Trustee shall assume
that each interest rate cap contract has a value of $10,000.
SECTION 2.08. Covenants of the Servicer.
The Servicer hereby covenants to the Depositor and the Trustee
as follows:
(a) the Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer,
statement furnished in writing or written report delivered to the Depositor, any
affiliate of the Depositor or the Trustee and prepared by the Servicer pursuant
to this Agreement will contain any untrue statement of a material fact or omit
to state a material fact necessary to make such information, certificate,
statement or report not misleading.
ARTICLE III
ADMINISTRATION AND SERVICING
OF LOANS
SECTION 3.01. Servicer to Service Loans.
For and on behalf of the Certificateholders, the Servicer
shall service and administer the Loans in accordance with the terms of this
Agreement and customary and usual standards of practice of prudent mortgage loan
servicers, and shall maintain all material licenses necessary for the conduct of
its business. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through Subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof, (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers
48
and other instruments and documents, (ii) to consent to transfers of any
Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages
(but only in the manner provided in this Agreement), (iii) to collect any
Insurance Proceeds and other Liquidation Proceeds and Recoveries and (iv) to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Loan; provided that the Servicer shall not take any action
that is inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Loan or the rights and interests of the Depositor, the
Trustee and the Certificateholders under this Agreement. The Servicer shall
represent and protect the interests of the Trust Fund in the same manner as it
protects its own interests in mortgage loans in its own portfolio in any claim,
proceeding or litigation regarding a Loan, and shall not make or permit any
modification, waiver or amendment of any Loan which would cause the Trust Fund
to fail to qualify as one or more REMICs or result in the imposition of any tax
under Section 860F(a) or Section 860G(d) of the Code. Without limiting the
generality of the foregoing, the Servicer, in its own name or in the name of the
Depositor and the Trustee, is hereby authorized and empowered by the Depositor
and the Trustee, when the Servicer believes it appropriate in its reasonable
judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Loans, and with respect to the
Mortgaged Properties held for the benefit of the Certificateholders. The
Servicer shall prepare and deliver to the Depositor and/or the Trustee such
documents requiring execution and delivery by either or both of them as are
necessary or appropriate to enable the Servicer to service and administer the
Loans to the extent that the Servicer is not permitted to execute and deliver
such documents pursuant to the preceding sentence. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such documents and
deliver them to the Servicer. In addition, upon the request of the Servicer from
time to time the Trustee shall execute and deliver to the Servicer one or more
powers of attorney in the form attached hereto as Exhibit M.
SECTION 3.02. Subservicing; Enforcement of the Obligations of
Servicers.
(a) The Servicer may arrange for the subservicing of any Loan
by a Subservicer pursuant to a subservicing agreement; provided, however, that
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Unless the context
otherwise requires, references in this Agreement to actions taken or to be taken
by the Servicer in servicing the Loans include actions taken or to be taken by a
Subservicer on behalf of the Servicer. Notwithstanding the provisions of any
subservicing agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and liable to the Depositor, the Trustee and the Certificateholders
for the servicing and administration of the Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such subservicing agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Loans. All actions of each Subservicer performed pursuant to the related
subservicing agreement shall be performed as an agent of the Servicer with the
same force and effect as if performed directly by the Servicer. Each
subservicing agreement, if any, shall provide that any successor servicer
(including, without limitation, the Trustee acting in such capacity) shall have
the right to terminate such subservicing agreement without the payment of any
fees or other amounts to the subservicer.
(b) For purposes of this Agreement, the Servicer shall be
deemed to have received any collections, recoveries or payments with respect to
the Loans that are received by a Subservicer regardless of whether such payments
are remitted by the Subservicer to the Servicer.
49
SECTION 3.03. Rights of the Depositor and the Trustee in
Respect of the Servicer.
The Depositor may, but is not obligated to, enforce the
obligations of the Servicer hereunder and may, but is not obligated to, perform,
or cause a designee to perform, any defaulted obligation of the Servicer
hereunder and in connection with any such defaulted obligation to exercise the
related rights of the Servicer hereunder; provided that the Servicer shall not
be relieved of any of its obligations hereunder by virtue of such performance by
the Depositor or its designee. Neither the Trustee nor the Depositor shall have
any responsibility or liability for any action or failure to act by the Servicer
nor shall the Trustee or the Depositor be obligated to supervise the performance
of the Servicer hereunder or otherwise.
SECTION 3.04. Trustee to Act as Servicer.
In the event that the Servicer shall for any reason no longer
be the Servicer hereunder (including by reason of an Event of Default), the
Trustee or its successor shall thereupon assume all of the rights and
obligations of the Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of the Servicer pursuant to Section
3.09 hereof or any acts or omissions of the predecessor Servicer hereunder, (ii)
obligated to make Advances if it is prohibited from doing so by applicable law,
(iii) obligated to effectuate repurchases or substitutions of Loans hereunder
including, but not limited to, repurchases or substitutions of Loans pursuant to
Section 2.02 or 2.03 hereof, (iv) responsible for expenses of the Servicer
pursuant to Section 2.03 or (v) deemed to have made any representations and
warranties of the Servicer hereunder). Any such assumption shall be subject to
Section 7.02 hereof. If the Servicer shall for any reason no longer be the
Servicer (including by reason of any Event of Default), the Trustee or its
successor shall succeed to any rights and obligations of the Servicer under each
subservicing agreement.
The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement or substitute subservicing agreement and
the Loans then being serviced thereunder and an accounting of amounts collected
or held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of the substitute subservicing agreement to the assuming
party.
SECTION 3.05. Collection of Loan Payments; Certificate
Account; Distribution Account.
(a) The Servicer shall make reasonable efforts in accordance
with the customary and usual standards of practice of prudent mortgage servicers
to collect all payments called for under the terms and provisions of the Loans
to the extent such procedures shall be consistent with this Agreement and the
terms and provisions of any related Required Insurance Policy. Consistent with
the foregoing, the Servicer may in its discretion (i) waive any late payment
charge or any prepayment charge or penalty interest in connection with the
prepayment of a Loan and (ii) extend the due dates for payments due on a
Mortgage Note for a period not greater than 180 days; provided, however, that
the Servicer cannot extend the maturity of any such Loan past the date on which
the final payment is due on the latest maturing Loan as of the Cut-off Date. In
the event of any such arrangement, the Servicer shall make Advances on the
related Loan in accordance with the provisions of Section 4.01 during the
scheduled period in accordance with the amortization schedule of such Loan
without modification thereof by reason of such arrangements. The Servicer shall
not be required to institute or join in litigation with respect to collection of
any payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing
50
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
(b) The Servicer shall establish and maintain a Certificate
Account into which the Servicer shall deposit or cause to be deposited within
one Business Day of receipt, except as otherwise specifically provided herein,
the following payments and collections remitted by Subservicers or received by
it in respect of the Loans subsequent to the Cut-off Date (other than in respect
of principal and interest due on the Loans on or before the Cut-off Date) and
the following amounts required to be deposited hereunder:
(i) all payments on account of principal on the
Loans, including Principal Prepayments;
(ii) all payments on account of interest on the
Loans, net of the related Servicing Fee;
(iii) all Insurance Proceeds and Liquidation
Proceeds, other than proceeds to be applied to the restoration or
repair of the Mortgaged Property or released to the Mortgagor in
accordance with the Servicer's normal servicing procedures, and all
Recoveries;
(iv) any amount required to be deposited by the
Servicer pursuant to Section 3.05(d) in connection with any losses on
Permitted Investments;
(v) any amounts required to be deposited by the
Servicer pursuant to Section 3.09(c) and, in respect of net monthly
rental income from REO Property, pursuant to Section 3.11 hereof;
(vi) all Substitution Adjustment Amounts;
(vii) all Advances made by the Servicer pursuant to
Section 4.01;
(viii) all Principal Prepayments, Liquidation
Proceeds and other unscheduled payments on the Loans received on the
Cut-off Date; and
(ix) any other amounts required to be deposited
hereunder.
The foregoing requirements for remittance by the Servicer
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of prepayment penalties,
late payment charges or assumption fees, if collected, need not be remitted by
the Servicer. In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time withdraw or direct the institution
maintaining the Certificate Account to withdraw such amount from the Certificate
Account, any provision herein to the contrary notwithstanding. Such withdrawal
or direction may be accomplished by delivering written notice thereof to the
Trustee or such other institution maintaining the Certificate Account which
describes the amounts deposited in error in the Certificate Account. The
Servicer shall maintain adequate records with respect to all withdrawals made
pursuant to this Section. All funds deposited in the Certificate Account shall
be held in trust for the Certificateholders until withdrawn in accordance with
Section 3.08.
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(c) The Trustee shall establish and maintain, for the benefit
of the Certificateholders, the Distribution Account. The Trustee shall, promptly
upon receipt, deposit in the Distribution Account and retain therein the
following:
(i) the aggregate amount remitted by the Servicer to
the Trustee pursuant to Section 3.08(a)(ix); and
(ii) any other amounts deposited hereunder which are
required to be deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not
required to be remitted, it may at any time direct the Trustee to withdraw such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer's
Certificate to the Trustee which describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee uninvested in trust for the Certificateholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 3.08. In no event shall the Trustee incur liability for withdrawals from
the Distribution Account at the direction of the Servicer.
(d) The Servicer may direct, in writing, each institution at
which the Certificate Account is maintained to invest the funds therein in
specified Permitted Investments, which shall mature not later than, the second
Business Day next preceding the Distribution Account Deposit Date (except that
if such Permitted Investment is an obligation of the institution that maintains
such account or a fund for which such institution or affiliate thereof serves as
an investment advisor, administrator, shareholder servicing agent and/or
custodian or subcustodian, then such Permitted Investment shall mature not later
than the Business Day next preceding such Distribution Account Deposit Date) and
shall not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. So long as no Event of Default shall have occurred and be
continuing, all income earned on funds on deposit in the Certificate Account,
net of any losses realized from any Permitted Investments made with such funds,
shall be for the benefit of the Servicer as servicing compensation and shall be
remitted to it monthly as provided herein. If an Event of Default has occurred
and is continuing, all income earned on funds on deposit in the Certificate
Account, net of any losses realized from any Permitted Investments made with
such funds, shall be deposited into the Certificate Account without right of
reimbursement. The amount of any realized losses in the Certificate Account in
respect of any such Permitted Investments shall promptly be deposited by the
Servicer (from its own funds) in the Certificate Account. The Trustee in its
fiduciary capacity shall not be liable for the amount of any loss incurred in
respect of any investment or lack of investment of funds held in the Certificate
Account and made in accordance with this Section 3.05.
(e) The Servicer shall give notice to the Trustee, each
Seller, each Rating Agency and the Depositor of any proposed change of the
location of the Certificate Account prior to any change thereof. The Trustee
shall give notice to the Servicer, each Seller, each Rating Agency and the
Depositor of any proposed change of the location of the Distribution Account
prior to any change thereof.
SECTION 3.06. Payment of Taxes, Assessments, Hazard Insurance
Premiums and Similar Items; Escrow Accounts.
(a) The Servicer shall require Mortgagors to pay all taxes,
assessments, hazard insurance premiums, flood insurance premiums, condominium
association dues or comparable items for the account of the Mortgagors. To the
extent required by the Seller at the time the related Loan was
52
originated and not violative of current law, the Servicer shall establish and
maintain one or more accounts (each, an "ESCROW ACCOUNT") and deposit and retain
therein all collections from the Mortgagors (or advances by the Servicer) for
the payment of taxes, assessments, hazard insurance premiums, condominium
association dues or comparable items for the account of the Mortgagors. Nothing
herein shall require the Servicer to compel a Mortgagor to establish an Escrow
Account in violation of applicable law or if the Seller of the related Loan did
not require the establishment of an Escrow Account at the time the Loan was
originated.
Withdrawals of amounts so collected from the Escrow Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium association dues, or comparable items, to
reimburse the Servicer out of related collections for any payments made pursuant
to Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.09 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums determined to be overages, to pay interest, if required by
law or the terms of the related Mortgage or Mortgage Note, to Mortgagors on
balances in the Escrow Account or to clear and terminate the Escrow Account at
the termination of this Agreement in accordance with Section 9.01 hereof. The
Escrow Accounts shall not be a part of the Trust Fund.
(b) The Servicer shall advance any payments referred to in
Section 3.06(a) that are not timely paid by the Mortgagors on the date when the
tax, premium or other cost for which such payment is intended is due, but the
Servicer shall be required so to advance only to the extent that such advances,
in the good faith judgment of the Servicer, are required to be made to protect
the lien of the Mortgage and will be recoverable by the Servicer out of
Insurance Proceeds, Liquidation Proceeds or otherwise. The amount of any such
advances made by the Servicer for the purpose of maintaining any hazard or flood
insurance shall not, for the purpose of calculating monthly distributions to the
Certificateholders or remittances to the Trustee for their benefit, be added to
the principal balance of the related Loan, notwithstanding that the terms of the
Loan so permit. Any advance made by the Servicer pursuant to this Section 3.06
shall be recoverable as a Servicing Advance to the extent permitted by Section
3.08.
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Loans.
(a) The Servicer shall afford the Depositor, the Trustee and
each Rating Agency reasonable access to all records and documentation regarding
the Loans and all accounts, insurance information and other matters relating to
this Agreement, such access being afforded without charge, but only upon
reasonable request and during normal business hours at the office designated by
the Servicer.
(b) Upon reasonable advance notice in writing, the Servicer
will provide to each Certificateholder which is a savings and loan association,
bank or insurance company certain reports and reasonable access to information
and documentation regarding the Loans sufficient to permit such
Certificateholder to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that the Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the Servicer in providing such
reports and access.
SECTION 3.08. Permitted Withdrawals from the Certificate
Account and Distribution Account.
(a) The Servicer may from time to time make withdrawals from
the Certificate Account for the following purposes:
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(i) to pay to the Servicer (to the extent not
previously retained by the Servicer) the servicing compensation to
which it is entitled pursuant to Section 3.13, and, subject to Section
3.05(d), to pay to the Servicer, as additional servicing compensation,
earnings on or investment income with respect to funds in or credited
to the Certificate Account;
(ii) to reimburse the Servicer for unreimbursed
Advances made by it, such right of reimbursement pursuant to this
subclause (ii) being limited to amounts received on the Loan(s) in
respect of which any such Advance was made, excluding any Purchase
Price proceeds received from the Servicer pursuant to Section 3.11 and
subject to Section 9.01;
(iii) to reimburse the Servicer for any
Nonrecoverable Advance previously made, except that the Servicer shall
no longer be entitled to reimbursement for any Nonrecoverable Advance
on a Loan as of the date the Servicer purchases such Loan from the
Trust Fund pursuant to Section 3.11 or Section 9.01;
(iv) to reimburse the Servicer for Insured Expenses
from the related Insurance Proceeds;
(v) to reimburse the Servicer for (a) unreimbursed
Servicing Advances, the Servicer's right to reimbursement pursuant to
this clause (a) with respect to any Loan being limited to amounts
received on such Loan(s) which represent late recoveries of the
payments for which such Servicing Advances were made pursuant to
Section 3.01 or Section 3.06 and (b) for unpaid Servicing Fees as
provided in Section 3.11 hereof;
(vi) to pay to the purchaser, with respect to each
Loan or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.11, all amounts received thereon
after the date of such purchase;
(vii) to (A) reimburse the Sellers, the Servicer or
the Depositor for expenses incurred by any of them that are
reimbursable pursuant to Section 6.03 hereof or (B) to pay to the
Trustee any Trustee Permitted Withdrawal Amounts;
(viii) to withdraw any amount deposited in the
Certificate Account and not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit
Date, to withdraw an amount equal to the Available Funds for such
Distribution Date and remit such amounts to the Trustee for deposit in
the Distribution Account; and
(x) to clear and terminate the Certificate Account
upon termination of this Agreement pursuant to Section 9.01 hereof.
The Servicer shall keep and maintain separate accounting, on a
Loan by Loan basis, for the purpose of justifying any withdrawal from the
Certificate Account pursuant to such subclauses (i), (ii), (iv), (v) and (vi).
Prior to making any withdrawal from the Certificate Account pursuant to
subclause (iii), the Servicer shall deliver to the Trustee an Officer's
Certificate of a Servicing Officer indicating the amount of any previous Advance
determined by the Servicer to be a Nonrecoverable Advance and identifying the
related Loans(s), and their respective portions of such Nonrecoverable Advance.
54
(b) The Trustee shall withdraw funds from the Distribution
Account to make the distributions specified in this Agreement (and to withhold
from the amounts so withdrawn, the amount of any taxes that it is authorized to
withhold pursuant to the last paragraph of Section 8.11). In addition, the
Trustee may from time to time make withdrawals from the Distribution Account for
the following purposes:
(i) to the extent not remitted by the Servicer
pursuant to Section 3.08(a)(vii)(B) above within a reasonable period of
time after request by the Trustee, to remit (prior to making any other
distributions from amounts held in the Distribution Account) to itself
any Trustee Permitted Withdrawal Amounts;
(ii) to withdraw and return to the Servicer any
amount deposited in the Distribution Account and not required to be
deposited therein; and
(iii) to clear and terminate the Distribution Account
upon termination of the Agreement pursuant to Section 9.01 hereof.
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies.
(a) The Servicer shall require Mortgagors to maintain, for
each Loan, hazard insurance with extended coverage (i) in the case of a Loan
secured by a Mortgage creating a first lien on the related Mortgaged Property,
in an amount that is at least equal to the original principal balance of such
Loan or the maximum insurable value of the improvements on such Mortgaged
Property, whichever is less, and (ii) in the case of a Second Lien Loan, in an
amount equal to the lesser of the combined principal balance of such Second Lien
Loan and the related first lien mortgage loan or the maximum insurable value of
the improvements on the related Mortgaged Property. Each such policy of standard
hazard insurance shall contain, or have an accompanying endorsement that
contains, a standard mortgagee clause. Any amounts collected by the Servicer
under any such policies (other than the amounts to be applied to the restoration
or repair of the improvements on the related Mortgaged Property or amounts
released to the Mortgagor in accordance with the Servicer's normal servicing
procedures) shall be deposited in the Certificate Account. It is understood and
agreed that no earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired in respect of a Mortgage other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
is located at the time of origination of the Loan in a federally designated
special flood hazard area and such area is participating in the national flood
insurance program, the Servicer shall require the related Mortgagor to maintain
flood insurance with respect to such Loan. Such flood insurance shall be in an
amount equal to the original principal balance of the related Loan.
(b) The Servicer shall not be required to have Mortgagors
maintain any Primary Mortgage Insurance Policy with respect to any Loan, but may
do so as allowed by law, and shall allow the cancellation of any such Primary
Mortgage Insurance Policy as required by law. The Servicer shall not take any
action which would result in non-coverage under any applicable Primary Mortgage
Insurance Policy of any loss which, but for the actions of the Servicer, would
have been covered thereunder. If any Mortgagor fails to pay the premiums for its
Primary Mortgage Insurance Policy, if any, the Servicer may, but shall not be
required to, pay such premiums. Any payment made by the Servicer pursuant to
this Section 3.09(b) shall be recoverable as a Servicing Advance to the extent
permitted by Section 3.08.
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(c) In connection with its activities as Servicer of the
Loans, the Servicer agrees to present on behalf of itself, the Trustee and the
Certificateholders, claims to the insurer under any Primary Mortgage Insurance
Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Primary Mortgage Insurance Policies
respecting defaulted Loans. Any amounts collected by the Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the Certificate
Account.
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
(a) When any property subject to a Mortgage has been conveyed
by the Mortgagor, the Servicer, to the extent that it has knowledge of such
conveyance, may, at its discretion, but is not required to, enforce any
due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. The Servicer is authorized, subject to
Section 3.10(b), to take or enter into an assumption and modification agreement
from or with the Person to whom such property has been or is about to be
conveyed, pursuant to which such Person becomes liable under the Mortgage Note
and, unless prohibited by applicable state law, the Mortgagor remains liable
thereon, provided that the Loan shall continue to be covered (if so covered
before the Servicer enters such agreement) by the applicable Required Insurance
Policies. The Servicer, subject to Section 3.10(b), is also authorized with the
prior approval of the insurers under any Required Insurance Policies to enter
into a substitution of liability agreement with such Person, pursuant to which
the original Mortgagor is released from liability and such Person is substituted
as Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Servicer shall not be deemed to be in default under this Section
by reason of any transfer or assumption which the Servicer reasonably believes
it is restricted by law from preventing, for any reason whatsoever.
(b) In any case in which a Mortgaged Property has been
conveyed to a Person by a Mortgagor, and such Person is to enter into an
assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage that requires the signature of the Trustee, or if an instrument
of release signed by the Trustee is required releasing the Mortgagor from
liability on the Loan, the Servicer shall prepare and deliver or cause to be
prepared and delivered to the Trustee for signature and shall direct, in
writing, the Trustee to execute the assumption agreement with the Person to whom
the Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
or otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person. In connection with any such
assumption, no material term of the Mortgage Note may be changed. In addition,
the substitute Mortgagor and the Mortgaged Property must be acceptable to the
Servicer in accordance with its underwriting standards as then in effect.
Together with each such substitution, assumption or other agreement or
instrument delivered to the Trustee for execution by it, the Servicer shall
deliver an Officer's Certificate signed by a Servicing Officer stating that the
requirements of this subsection have been met in connection therewith. The
Servicer shall notify the Trustee that any such substitution or assumption
agreement has been completed by forwarding to the Trustee the original of such
substitution or assumption agreement, which in the case of the original shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof. Any fee collected by the Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Servicer as additional servicing compensation.
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SECTION 3.11. Realization Upon Defaulted Loans; Repurchase and
Sale of Certain Loans.
The Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual in its general mortgage servicing activities and meet the
requirements of the insurer under any Required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Loan after reimbursement to itself
of such expenses and (ii) that such expenses will be recoverable to it through
Liquidation Proceeds (respecting which it shall have priority for purposes of
withdrawals from the Certificate Account). The Servicer shall be responsible for
all other costs and expenses incurred by it in any such proceedings; provided,
however, that it shall be entitled to reimbursement thereof from the liquidation
proceeds with respect to the related Mortgaged Property, as provided in the
definition of Liquidation Proceeds. If the Servicer has knowledge that a
Mortgaged Property which the Servicer is contemplating acquiring in foreclosure
or by deed in lieu of foreclosure is located within a one mile radius of any
site with environmental or hazardous waste risks known to the Servicer, the
Servicer will, prior to acquiring the Mortgaged Property, consider such risks
and only take action in accordance with its established environmental review
procedures.
With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee's name shall be placed on the title to such REO Property solely as the
Trustee hereunder and not in its individual capacity. The Servicer shall ensure
that the title to such REO Property references this Agreement and the Trustee's
capacity thereunder. In order to facilitate sales of REO Properties by the
Servicer, upon the Servicer's request, the Trustee shall promptly provide the
Servicer with appropriate limited durable powers of attorney or such other
documentation as may reasonably be required by the Servicer or purchasers of REO
Properties to consummate such sales. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by the
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Certificateholders for the period prior to the
sale of such REO Property. The Servicer shall prepare for and deliver to the
Trustee a statement with respect to each REO Property that has been rented
showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Trustee to comply with the reporting
requirements of the REMIC Provisions. The net monthly income, if any, from such
REO Property shall be deposited in the Certificate Account no later than the
close of business on each Determination Date. The Servicer shall perform the tax
reporting and withholding required by Sections 1445 and 6050J of the Code with
respect to foreclosures and abandonments, the tax reporting required by Section
6050H of the Code with respect to the receipt of mortgage interest from
individuals and any tax reporting required by Section 6050P of the Code with
respect to the cancellation of indebtedness by certain financial entities, by
preparing such tax and information returns as may be required, in the form
required, and delivering the same to the Trustee for filing.
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In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Loan, the Servicer shall dispose of such Mortgaged Property prior
to the close of the third taxable year of the Trust Fund following the taxable
year of the Trust Fund in which the Trust Fund acquired such Mortgaged Property,
unless the Trustee shall have been supplied with an Opinion of Counsel (which
Opinion of Counsel shall not be at the expense of the Trustee) to the effect
that the holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of any REMIC hereunder as defined in section 860F of the Code or
cause any REMIC to fail to qualify as one or more REMICs at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel). Notwithstanding any other provision of this Agreement, no Mortgaged
Property acquired by the Trust Fund shall be rented (or allowed to continue to
be rented) or otherwise used for the production of income by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property to fail to qualify as "foreclosure property" within the
meaning of section 860G(a)(8) of the Code or (ii) subject any REMIC to the
imposition of any federal, state or local income taxes on the income earned from
such Mortgaged Property under Section 860G(c) of the Code or otherwise, unless
the Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.
The decision of the Servicer to foreclose on a defaulted Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The proceeds from any liquidation of a Loan, as well as any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the Servicer for any related unreimbursed Servicing Advances
and Servicing Fees related to such Liquidated Loan; second, to reimburse the
Servicer for any unreimbursed Advances; third, to accrued and unpaid interest
(to the extent no Advance has been made for such amount or any such Advance has
been reimbursed) on the Loan or related REO Property, at the Adjusted Net
Mortgage Rate to the Due Date occurring in the calendar month preceding the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Loan. Excess Proceeds, if any, from the liquidation
of a Liquidated Loan will be retained by the Servicer as additional servicing
compensation pursuant to Section 3.13.
During the first full calendar month (but excluding the last
Business Day thereof) following the calendar month in which a Loan became 91
days or more delinquent, the Servicer, in its sole discretion, shall have the
right, but not the obligation, to purchase for its own account or for resale as
set forth herein from the Trust Fund any Loan that is then still 91 days or more
delinquent at a price equal to the Purchase Price. The Purchase Price for any
Loan purchased hereunder shall be deposited in the Certificate Account and the
Trustee, upon receipt of a Request for Release from the Servicer substantially
in the form of Exhibit J, shall release or cause to be released to the Servicer
the related Mortgage File and shall execute and deliver such instruments of
transfer or assignment prepared by the purchaser, in each case without recourse,
as shall be necessary to vest in the purchaser any Loan released pursuant hereto
and the purchaser shall succeed to all the Trustee's right, title and interest
in and to such Loan and all security and documents related thereto. Such
assignment shall be a sale and assignment outright and not for security. The
purchaser shall thereupon own such Loan, and all security and documents, free of
any further obligation to the Trustee or the Certificateholders with respect
thereto.
If with respect to any delinquent Loan, the option of the
Servicer set forth in the preceding paragraph shall have arisen but the Servicer
shall have failed to exercise such option with respect to such Loan on or before
the Business Day preceding the last Business Day of the calendar month following
the calendar
58
month during which such Loan first became 91 days or more delinquent, then such
option shall automatically expire with respect to such Loan; provided, however,
that if any such Loan shall cease to be 91 days or more delinquent but then
subsequently shall again become 91 days or more delinquent, then the Servicer
shall be entitled to another repurchase option with respect to such Loan as
provided in the preceding paragraph.
SECTION 3.12. Documents, Records and Funds in Possession of
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Loan coming into the possession of the
Servicer from time to time and shall account fully to the Trustee for any funds
received by the Servicer or which otherwise are collected by the Servicer as
Liquidation Proceeds, Insurance Proceeds or Recoveries in respect of any Loan.
All Mortgage Files and funds collected or held by, or under the control of, the
Servicer in respect of any Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds or Recoveries, including but not
limited to, any funds on deposit in the Certificate Account, shall be held by
the Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trustee, subject to the applicable provisions of
this Agreement. The Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the Certificate
Account, Distribution Account, or any funds that otherwise are or may become due
or payable to the Trustee for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage File or any funds collected on, or in connection with, a
Loan, except, however, that the Servicer shall be entitled to set off against
and deduct from any such funds any amounts that are properly due and payable to
the Servicer under this Agreement.
SECTION 3.13. Servicing Compensation.
As compensation for its activities hereunder, the Servicer
shall be entitled to retain or withdraw from the Certificate Account an amount
equal to the Servicing Fee for each Loan, provided that the aggregate Servicing
Fee for the Loans with respect to any Distribution Date shall be reduced (i) by
an amount equal to the aggregate of the Prepayment Interest Shortfalls, if any,
with respect to such Distribution Date, up to the full amount of the aggregate
Servicing Fee, and (ii) with respect to the first Distribution Date, an amount
equal to any amount to be deposited into the Certificate Account by the Sellers
pursuant to Section 2.01(a) and not so deposited.
Additional servicing compensation in the form of Excess
Proceeds, Prepayment Interest Excess, prepayment penalties, assumption fees,
late payment charges and all income earned on funds on deposit in the
Certificate Account, net of any losses realized from any Permitted Investments
made with such funds, shall be retained by the Servicer to the extent not
required to be deposited in the Certificate Account pursuant to Section 3.05
hereof. The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided in this Agreement.
SECTION 3.14. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising certain Certificateholders and the
examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Loans required by
applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only
59
upon reasonable and prior written request and during normal business hours at
the offices designated by the Servicer. Nothing in this Section shall limit the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the Mortgagors and the failure of the Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
SECTION 3.15. Annual Statement as to Compliance.
The Servicer shall deliver to the Depositor and the Trustee
not later than March 15 of each calendar year commencing with the calendar year
following the calendar year in which the Closing Date occurs, an annual
compliance certificate pursuant to Item 1123 of Regulation AB, signed by an
officer of the Servicer, stating that (i) a review of the activities of the
Servicer during the preceding calendar year and of the performance of the
Servicer under this Agreement has been made under such officer's supervision and
(ii) to the best of such officer's knowledge, based on such review, the Servicer
has fulfilled all its obligations under this Agreement in all material respects
throughout such calendar year, or, if there has been a failure to fulfill any
such obligation in any material respect, specifying each such failure known to
such officer and the nature and status thereof. The Trustee shall forward a copy
of each such statement to each Rating Agency. Copies of such compliance
certificates shall be provided by the Servicer to any Certificateholder, without
charge, upon the written request of such Certificateholder.
SECTION 3.16. Servicer's Annual Servicing Statement;
Independent Public Accountants' Attestation.
(a) The Servicer shall deliver to the Depositor and the
Trustee, not later than March 15 of each calendar year in which the Depositor is
required to file an annual report on Form 10-K with respect to the Trust Fund,
commencing with the calendar year following the calendar year in which the
Closing Date occurs, a report regarding the Servicer's assessment of its
compliance with the Servicing Criteria. Copies of such report shall be provided
by the Servicer, without charge, upon written request of such Certificateholder.
Such report shall contain the following statements (which statements shall be
based on the activities the Servicer performs with respect to asset-backed
securities transactions taken as a whole involving the Servicer that are backed
by the same asset type as the Loans):
(i) a statement by the Servicer of its responsibility
for assessing compliance with the Servicing Criteria applicable to the Servicer;
(ii) a statement by the Servicer that it used the
Servicing Criteria to assess compliance with the Servicing Criteria applicable
to the Servicer;
(iii) a statement by the Servicer as to which of the
Servicing Criteria, if any, are not applicable to the Servicer;
(iv) a statement by the Servicer assessing the
Servicer's compliance with the applicable Servicing Criteria as of the last day
of the immediately preceding calendar year and covering the period of the
preceding calendar year, which shall disclose any material instance of
noncompliance with respect thereto; and
(v) a statement by the Servicer that a registered
public accounting firm has issued an attestation report on the Servicer's
assessment of compliance with the applicable Servicing Criteria as of the last
day of the immediately preceding calendar year and covering the period of the
preceding calendar year.
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(b) Not later than March 15 of each calendar year in which the
Depositor is required to file an annual report on Form 10-K with respect to the
Trust Fund, commencing with the calendar year following the calendar year in
which the Closing Date occurs, the Servicer, at its expense, shall cause a
registered public accounting firm which is a member of the American Institute of
Certified Public Accountants to furnish to the Depositor and Trustee a report by
such accounting firm that attests to, and reports on, the assessment made by the
Servicer pursuant to Section 3.16(a) hereof, meeting the requirements of Item
1122(b) of Regulation AB. Such attestation shall be in accordance with the
Exchange Act and Regulation S-X under the Securities Act. Copies of such report
shall be provided by the Servicer to any Certificateholder, without charge, upon
the written request of such Certificateholder.
SECTION 3.17. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under
this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
Servicer hereunder and (b) a fidelity bond in respect of its officers, employees
and agents. Each such policy or policies and bond shall, together, comply with
the requirements from time to time of FNMA or FHLMC for persons performing
servicing for mortgage loans purchased by FNMA or FHLMC. In the event that any
such policy or bond ceases to be in effect, the Servicer shall obtain a
comparable replacement policy or bond from an insurer or issuer, meeting the
requirements set forth above as of the date of such replacement.
SECTION 3.18. Engagement by Servicer of Affiliates or Third
Party Vendors.
Notwithstanding anything herein to the contrary, for so long
as the Depositor is subject to Exchange Act reporting with respect to the Trust
Fund:
to the extent the Servicer engages any affiliate or third
party vendor, in connection with the performance of any of its material duties
under this Agreement, the Servicer shall immediately notify the Depositor in
writing of such engagement. To the extent the Depositor notifies the Servicer
that it has determined that such affiliates or third party vendors are
participating in the servicing function with respect to the Loans, within the
meaning of Item 1122 of Regulation AB, the Servicer shall cause such affiliates
or third party vendors to prepare a separate annual assessment and attestation
report, as contemplated by Section 3.16 of this Agreement, and deliver such
report to the Servicer in accordance with Section 3.16 of this Agreement. In
addition, to the extent that such affiliate or third party vendor meets the
criteria in Item 1108(a)(2)(i), (ii) or (iii) of Regulation AB and the Depositor
notifies the Servicer that it has determined that any such affiliate or third
party vendor would be a "servicer" within the meaning of Item 1101 of Regulation
AB, the Servicer shall cause such affiliate or third party vendor to prepare a
separate annual compliance statement as contemplated by Section 3.15 of this
Agreement and deliver such statement to the Servicer as set forth in Section
3.15 of this Agreement. Furthermore, if such affiliate or third party vendor
meets the criteria in Item 1108(a)(2)(i), (ii) or (iii) of Regulation AB and the
Depositor determines any such affiliate or third party vendor would be a
"servicer" within the meaning of Item 1101 of Regulation AB, the Servicer shall
cause such affiliate or third party vendor to provide the Servicer, the
Depositor and the Trustee the information required by Item 1108(b) and 1108(c)
of Regulation AB within two (2) Business Days following such engagement.
SECTION 3.19. Delinquent Loans.
For all purposes in this Agreement and the Exhibits and
Schedules attached hereto, the determination as to whether a Loan is delinquent
shall be based on the number of days that payments on
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such Loan are contractually past due, assuming 30-day months. For example, a
payment due on the first day of a month is not 30 days delinquent until the
first day of the following month.
ARTICLE IIIA
RESERVE FUNDS AND NET WAC CAP ACCOUNT
SECTION 3A.01 Cap Reserve Fund and Cap Agreement.
(a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Certificateholders, the
Cap Reserve Fund to cover certain payments to the Offered Certificates. The Cap
Reserve Fund shall be an Eligible Account, and funds on deposit in such fund
shall be held separate and apart from, and shall not be commingled with, any
other moneys, including without limitation, other moneys held by the Trustee
pursuant to this Agreement. The Cap Reserve Fund shall be treated as an "outside
reserve fund" under applicable Treasury regulations and will not be part of any
REMIC. Any investment earnings on funds on deposit in the Cap Reserve Fund will
be treated as owned by the Trustee and will be taxable to the Trustee.
Distributions made to the Cap Reserve Fund under this document shall be treated
as made to the Trustee.
(b) In addition, on the Closing Date, the Master Agreement
(including the Cap Agreement) will be entered into by the Counterparty and the
Trustee, for the benefit of the Certificateholders. On each Distribution Date,
the Trustee will deposit into the Cap Reserve Fund any amounts received pursuant
to the Cap Agreement. The Trustee shall collect payments due under and otherwise
enforce the terms of the Cap Agreement. The Trustee shall make withdrawals from
the Cap Reserve Fund to make distributions pursuant to Section 4.02(e).
Notwithstanding anything to the contrary contained herein, in no event shall the
Trustee in its fiduciary capacity be liable to the Holders of the Offered
Certificates, be required to make any deposit from its own funds into the Cap
Reserve Fund, or be required to take any action against the Counterparty in
connection with any delay in payment of amounts due under the Cap Agreement
caused by any government action as further described in clause (j) of Part I of
the Schedule to the Master Agreement during the grace period specified therein.
(c) The Trustee may, but need not, invest the funds in the Cap
Reserve Fund in Permitted Investments, which shall mature not later than, the
second Business Day preceding each Distribution Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
account or a fund for which such institution or affiliate thereof serves as an
investment advisor, administrator, shareholder servicing agent and/or custodian
or subcustodian, then such Permitted Investment shall mature not later than the
Business Day next preceding such Distribution Date) and shall not be sold or
disposed of prior to their maturity. All investments made with funds from the
Cap Reserve Fund shall be made in the name of the Trustee, for the benefit of
the Certificateholders. All income earned on funds on deposit in the Cap Reserve
Fund, net of any losses realized from any Permitted Investments made with such
funds, shall be deposited in the Cap Reserve Fund. The Trustee in its fiduciary
capacity shall not be liable for the amount of any loss incurred in respect of
any investment or lack of investment of funds held in the Cap Reserve Fund and
made in accordance with this Section 3A.01.
(d) Upon termination of the Trust Fund, any amounts remaining
in the Cap Reserve Fund shall be distributed to the Trustee.
(e) In the event that the Cap Agreement is terminated prior to
the Cap Stated Termination and the Counterparty has not obtained a replacement
counterparty to assume its obligations thereunder pursuant to the terms of the
Cap Agreement, the Trustee shall obtain a replacement yield
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maintenance agreement acceptable to the Servicer and shall apply any amounts
received from the Counterparty under the Cap Agreement in connection with its
termination, to the extent necessary, to obtain such replacement. In no event
whatsoever shall the Trustee be responsible for costs and expenses incurred in
connection with obtaining a replacement yield maintenance agreement or for any
fees, costs or expenses payable thereunder.
(f) For any Distribution Date on which there is an amount
payable to the Class X Certificates, the Trustee or either of them, from the Cap
Distribution Amount, such amount(s) shall not be an asset of the Trust Fund and,
instead, shall be paid into and distributed out of a separate trust created by
this Agreement for the benefit of the party entitled to receive such payment,
and distributed as specified in Section 4.02(e)(xxxii).
SECTION 0X.00 Xxxxxxxx Reserve Fund and Corridor Agreement.
(a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Certificateholders, the
Corridor Reserve Fund to cover certain payments to the Offered Certificates. The
Corridor Reserve Fund shall be an Eligible Account, and funds on deposit in such
fund shall be held separate and apart from, and shall not be commingled with,
any other moneys, including without limitation, other moneys held by the Trustee
pursuant to this Agreement. The Corridor Reserve Fund shall be treated as an
"outside reserve fund" under applicable Treasury regulations and will not be
part of any REMIC. Any investment earnings on funds on deposit in the Corridor
Reserve Fund will be treated as owned by the Trustee and will be taxable to the
Trustee. Distributions made to the Corridor Reserve Fund under this document
shall be treated as made to the Trustee.
(b) In addition, on the Closing Date, the Master Agreement
(including the Corridor Agreement) will be entered into by the Counterparty and
the Trustee, for the benefit of the Certificateholders. On each Distribution
Date, the Trustee will deposit into the Corridor Reserve Fund any amounts
received pursuant to the Corridor Agreement. The Trustee shall collect payments
due under and otherwise enforce the terms of the Corridor Agreement. The Trustee
shall make withdrawals from the Corridor Reserve Fund to make distributions
pursuant to Section 4.02(g). Notwithstanding anything to the contrary contained
herein, in no event shall the Trustee in its fiduciary capacity be liable to the
Holders of the Offered Certificates, be required to make any deposit from its
own funds into the Corridor Reserve Fund, or be required to take any action
against the Counterparty in connection with any delay in payment of amounts due
under the Master Agreement caused by any government action as further described
in clause (j) of Part I of the Schedule to the Master Agreement during the grace
period specified therein.
(c) The Trustee may, but need not, invest the funds in the
Corridor Reserve Fund in Permitted Investments, which shall mature not later
than, the second Business Day preceding each Distribution Date (except that if
such Permitted Investment is an obligation of the institution that maintains
such account or a fund for which such institution or affiliate thereof serves as
an investment advisor, administrator, shareholder servicing agent and/or
custodian or subcustodian, then such Permitted Investment shall mature not later
than the Business Day next preceding such Distribution Date) and shall not be
sold or disposed of prior to their maturity. All investments made with funds
from the Corridor Reserve Fund shall be made in the name of the Trustee, for the
benefit of the Certificateholders. All income earned on funds on deposit in the
Corridor Reserve Fund, net of any losses realized from any Permitted Investments
made with such funds, shall be deposited in the Corridor Reserve Fund. The
Trustee in its fiduciary capacity shall not be liable for the amount of any loss
incurred in respect of any
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investment or lack of investment of funds held in the Corridor Reserve Fund and
made in accordance with this Section 3A.02.
(d) Upon termination of the Trust Fund, any amounts remaining
in the Corridor Reserve Fund shall be distributed to the Trustee.
(e) In the event that the Corridor Agreement is terminated
prior to the Corridor Stated Termination and the Counterparty has not obtained a
replacement counterparty to assume its obligations thereunder pursuant to the
terms of the Corridor Agreement, the Trustee shall obtain a replacement yield
maintenance agreement acceptable to the Servicer and shall apply any amounts
received from the Counterparty under the Corridor Agreement in connection with
its termination, to the extent necessary, to obtain such replacement. In no
event whatsoever shall the Trustee be responsible for costs and expenses
incurred in connection with obtaining a replacement yield maintenance agreement
or for any fees, costs or expenses payable thereunder.
(f) For any Distribution Date on which there is an amount
payable to the Class X Certificates, the Trustee or either of them, from the
Corridor Distribution Amount, such amount(s) shall not be an asset of the Trust
Fund and, instead, shall be paid into and distributed out of a separate trust
created by this Agreement for the benefit of the party entitled to receive such
payment, and distributed as specified in Section 4.02(g)(ii).
SECTION 3A.03. Net WAC Cap Account
(a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Certificateholders, the
Net WAC Cap Account and deposit therein the amount of $10,000 paid to the
Trustee by the Depositor. The Net WAC Cap Account shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including without limitation, other
moneys held by the Trustee pursuant to this Agreement. The Net WAC Cap Account
shall be treated as an "outside reserve fund" under applicable Treasury
regulations and will not be part of any REMIC. Any investment earnings on the
Net WAC Cap Account will be treated as owned by the Holders of the Class X
Certificates and will be taxable to the Holders of the Class X Certificates.
Distributions made to the Net WAC Cap Account under this document shall be
treated as made to the Class X Certificateholders.
(b) On each Distribution Date, the Trustee shall deposit
amounts in the Net WAC Cap Account pursuant to Section 4.02(d)(xxxi). The
Trustee shall make withdrawals from the Net WAC Cap Account to make
distributions pursuant to Section 4.02(h).
(c) The Trustee shall invest the funds in the Net WAC Cap
Account as directed in writing by the Holders of the Class X Certificates in
Permitted Investments, which shall mature not later than, the second Business
Day preceding each Distribution Date (except that if such Permitted Investment
is an obligation of the institution that maintains such account or a fund for
which such institution or affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent and/or custodian or subcustodian,
then such Permitted Investment shall mature not later than the Business Day next
preceding such Distribution Date) and shall not be sold or disposed of prior to
their maturity. Any investment earnings on such amounts shall be payable to the
Holders of the Class X Certificates. The Holders of the Class X Certificates
shall be treated as the owners of the Net WAC Cap Account for federal tax
purposes. The Trustee in its fiduciary capacity shall not be liable for the
amount of any loss incurred in respect of any investment or lack of investment
of funds held in the Net WAC Cap Account and made in accordance with this
Section 3A.03(c).
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(d) Upon termination of the Trust Fund, any amounts remaining
in the Net WAC Cap Account shall be distributed to the Holders of the Class X
Certificates.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
SECTION 4.01. Advances.
The Servicer shall determine on or before each Servicer
Advance Date whether it is required to make an Advance pursuant to the
definition thereof. If the Servicer determines it is required to make an
Advance, it shall, on or before the Servicer Advance Date, either (i) deposit
into the Certificate Account an amount equal to the Advance or (ii) make an
appropriate entry in its records relating to the Certificate Account that any
Amount Held for Future Distribution has been used by the Servicer in discharge
of its obligation to make any such Advance. Any funds so applied shall be
replaced by the Servicer by deposit in the Certificate Account no later than the
close of business on the next Servicer Advance Date. The Servicer shall be
entitled to be reimbursed from the Certificate Account for all Advances of its
own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Loan shall continue if such Loan
has been foreclosed or otherwise terminated and the Mortgaged Property has not
been liquidated.
SECTION 4.02. Priorities of Distribution and Allocation.
(a) Interest. On each Distribution Date, the Trustee will distribute:
(i) from the Interest Remittance Amount for that Distribution Date,
in the following order of priority, to the extent available:
(A) first, to the Trustee, any amounts then due and
owing representing fees of the Trustee based on
the Pool Principal Balance, to the extent not paid
by Trustee Permitted Withdrawal Amounts, expenses
and indemnity amounts due and owing to the Trustee
relating to the Loans;
(B) second, to the Servicer, an amount equal to the
sum of (1) the Servicing Fee relating to the
Loans, except to the extent previously paid with
permitted withdrawals from the Certificate
Account, and (2) any other amounts expended by the
Servicer in connection with the Loans and
reimbursable thereto under this Agreement but not
previously reimbursed;
(C) third, concurrently, to the Class []-[], Class
[]-[], Class []-[] and Class []-[] Certificates,
pro rata, the applicable Interest Distribution
Amounts for that Distribution Date; and
(D) fourth, concurrently, to the Class []-[], Class
[]-[], Class []-[] and Class []-[] Certificates,
pro rata, the applicable Class Unpaid Interest
Amounts, if any.
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(ii) from the Remaining Interest Remittance Amount for that
Distribution Date, in the following order of priority, to the
extent available:
(A) first, to the Class []-[] Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(B) second, to the Class []-[] Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(C) third, to the Class []-[] Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(D) fourth, to the Class []-[] Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(E) fifth, to the Class []-[] Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(F) sixth, to the Class []-[] Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(G) seventh, to the Class []-[] Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(H) eighth, to the Class []-[] Certificates, the
applicable Interest Distribution Amount for that
Distribution Date;
(I) ninth, to the Class []-[] Certificates, the
applicable Interest Distribution Amount for that
Distribution Date; and
(J) tenth, the Monthly Excess Interest Amount for that
Distribution Date will be applied as described
under Section 4.02(d) hereof.
(b) Principal (pre-Stepdown Date or Trigger Event). On each Distribution
Date before the Stepdown Date or with respect to which a Trigger Event
is in effect, the Trustee shall distribute:
(i) from the Principal Distribution Amount, in the following order of
priority, to the extent available, sequentially, to the Class
[]-[], Class []-[], Class []-[] and Class []-[] Certificates, in
that order, until the respective Class Certificate Balances
thereof have been reduced to zero; provided, however, that
notwithstanding any provision to the contrary set forth herein,
on any Distribution Date on which the sum of (1) the aggregate
Class Certificate Balance of the Subordinate Certificates and
(2) the Overcollateralization Amount is less than or equal to
zero, all distributions of principal to the Senior Certificates
will be made concurrently, on a pro rata basis, based on their
respective Class Certificate Balances.
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(ii) from the Pre-Stepdown Remaining Principal Distribution Amount,
in the following order of priority, to the extent available:
(A) first, to the Class []-[] Certificates, until the
Class Certificate Balance thereof has been reduced
to zero;
(B) second, to the Class []-[] Certificates, until the
Class Certificate Balance thereof has been reduced
to zero;
(C) third, to the Class []-[] Certificates, until the
Class Certificate Balance thereof has been reduced
to zero;
(D) fourth, to the Class []-[] Certificates, until the
Class Certificate Balance thereof has been reduced
to zero;
(E) fifth, to the Class []-[] Certificates, until the
Class Certificate Balance thereof has been reduced
to zero;
(F) sixth, to the Class []-[] Certificates, until the
Class Certificate Balance thereof has been reduced
to zero;
(G) seventh, to the Class []-[] Certificates, until
the Class Certificate Balance thereof has been
reduced to zero;
(H) eighth, to the Class []-[] Certificates, until the
Class Certificate Balance thereof has been reduced
to zero;
(I) ninth, to the Class []-[] Certificates, until the
Class Certificate Balance thereof has been reduced
to zero; and
(J) tenth, any amount of the Pre-Stepdown Remaining
Principal Distribution Amount remaining after
making all of the distributions in clauses
(b)(ii)(A) through (b)(ii)(I) above will be
applied as described in Section 4.02(d) hereof.
(c) Principal (post-Stepdown Date and no Trigger Event). On each
Distribution Date on or after the Stepdown Date and as long as a
Trigger Event is not in effect, the Trustee shall distribute:
(i) from the Principal Distribution Amount, the Senior Principal
Distribution Amount, in the following order of priority, to the
extent available, sequentially, to the Class []-[], Class []-[],
Class []-[] and Class []-[] Certificates, in that order, until
the respective Class Certificate Balances thereof have been
reduced to zero; provided, however, that notwithstanding any
provision to the contrary set forth herein, on any
Distribution Date on which the sum of (1) the aggregate Class
Certificate Balance of the Subordinate Certificates and (2) the
Overcollateralization Amount is less than or equal to zero, all
distributions of principal to the Senior Certificates will be
made concurrently, on a pro rata basis, based on their respective
Class Certificate Balances.
(ii) from the Post-Stepdown Remaining Principal Distribution Amount,
in the following order of priority, to the extent available:
67
(A) first, to the Class []-[] Certificates, the Class
[]-[] Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced
to zero;
(B) second, to the Class []-[] Certificates, the Class
[]-[] Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced
to zero;
(C) third, to the Class []-[] Certificates, the Class
[]-[] Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced
to zero;
(D) fourth, to the Class []-[] Certificates, the Class
[]-[] Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced
to zero;
(E) fifth, to the Class []-[] Certificates, the Class
[]-[] Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced
to zero;
(F) sixth, to the Class []-[] Certificates, the Class
[]-[] Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced
to zero;
(G) seventh, to the Class []-[] Certificates, the
Class []-[] Principal Distribution Amount, until
the Class Certificate Balance thereof has been
reduced to zero;
(H) eighth, to the Class []-[] Certificates, the Class
[]-[] Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced
to zero;
(I) ninth, to the Class []-[] Certificates, the Class
[]-[] Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced
to zero; and
(J) tenth, any amount of the Post-Stepdown Remaining
Principal Distribution Amount remaining after
making all of the distributions in clauses
(c)(ii)(A) through (c)(ii)(I) above will be
applied as described in Section 4.02(d) hereof.
(d) Excess Cashflow. On each Distribution Date, the Trustee shall
distribute: the Monthly Excess Cashflow Amount, to the extent
available, to the parties, in the amounts and in the priorities
indicated:
(i) first, concurrently, to the Class []-[], Class []-[],
Class []-[] and Class []-[] Certificates, pro rata,
any remaining applicable Interest Distribution Amount
for that Distribution Date;
68
(ii) second, concurrently, to the Class []-[], Class
[]-[], Class []-[] and Class []-[] Certificates, pro
rata, any remaining Class Unpaid Interest Amounts for
the Classes of Senior Certificates;
(iii) third, to fund the Extra Principal Distribution
Amount for that Distribution Date for distribution in
accordance with the priorities set forth under
clauses (b) and (c) above;
(iv) fourth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(v) fifth, to the Class []-[] Certificates, any remaining
Class Unpaid Interest Amount for the Class []-[]
Certificates;
(vi) sixth, to fund the Class []-[] Realized Loss
Amortization Amount for that Distribution Date;
(vii) seventh, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(viii) eighth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the Class
[]-[] Certificates;
(ix) ninth, to fund the Class []-[] Realized Loss
Amortization Amount for that Distribution Date;
(x) tenth, to the Class []-[] Certificates, any remaining
Interest Distribution Amount for that Distribution
Date;
(xi) eleventh, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the Class
[]-[] Certificates;
(xii) twelfth, to fund the Class []-[] Realized Loss
Amortization Amount for that Distribution Date;
(xiii) thirteenth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(xiv) fourteenth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the Class
[]-[] Certificates;
(xv) fifteenth, to fund the Class []-[] Realized Loss
Amortization Amount for that Distribution Date;
(xvi) sixteenth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(xvii) seventeenth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the Class
[]-[] Certificates;
69
(xviii) eighteenth, to fund the Class []-[] Realized Loss
Amortization Amount for that Distribution Date;
(xix) nineteenth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(xx) twentieth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest amount for the Class
[]-[] Certificates;
(xxi) twenty-first, to fund the Class []-[] Realized Loss
Amortization Amount for that Distribution Date;
(xxii) twenty-second, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(xxiii) twenty-third, to the Class []-[] Certificates, any
remaining Class Unpaid Interest amount for the Class
[]-[] Certificates;
(xxiv) twenty-fourth, to fund the Class []-[] Realized Loss
Amortization Amount for that Distribution Date;
(xxv) twenty-fifth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(xxvi) twenty-sixth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest amount for the Class
[]-[] Certificates;
(xxvii) twenty-seventh, to fund the Class []-[] Realized
Loss Amortization Amount for that Distribution Date;
(xxviii) twenty-eighth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(xxix) twenty-ninth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest amount for the Class
[]-[] Certificates;
(xxx) thirtieth, to fund the Class []-[] Realized Loss
Amortization Amount for that Distribution Date;
(xxxi) thirty-first, for deposit into the Net WAC Cap
Account, the amount equal to (a) the Net WAC Cap
Carryover for that Distribution Date (the amount so
deposited as limited by available funds) after taking
into account payments of Net WAC Carryover to be made
pursuant to Section 4.02(g) on that Distribution
Date, plus (b) the amount, if any, sufficient to
increase the aggregate amount on deposit in the Net
WAC Cap Account to $10,000 after giving effect to any
payments of Net WAC Cap Carryover to the Offered
Certificates on that Distribution Date;
70
(xxxii) thirty-second, to the Class []-[] Certificates as
principal, any Remaining Overcollateralization
Release Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(xxxiii) thirty-third, to the Class []-[] Certificates as
principal, any Remaining Overcollateralization
Release Amount remaining after giving effect to the
distribution set forth in clause (xxxii) above,
until the Class Certificate Balance thereof has
been reduced to zero;
(xxxiv) thirty-fourth, to the Class []-[] Certificates as
principal, any Remaining Overcollateralization
Release Amount remaining after giving effect to the
distribution set forth in clause (xxxiii) above,
until the Class Certificate Balance thereof has
been reduced to zero;
(xxxv) thirty-fifth, to the Class []-[] Certificates as
principal, any Remaining Excess Interest Amount,
until the Class Certificate Balance thereof has
been reduced to zero;
(xxxvi) thirty-sixth, to the Class []-[] Certificates as
principal, any Remaining Excess Interest Amount
remaining after giving effect to the distribution
set forth in clause (xxxv) above, until the Class
Certificate Balance thereof has been reduced to
zero;
(xxxvii) thirty-seventh, to the Class []-[] Certificates as
principal, any Remaining Excess Interest Amount
remaining after giving effect to the distribution
set forth in clause (xxxvi) above, until the Class
Certificate Balance thereof has been reduced to
zero; and
(xxxviii) thirty-eighth, to the Class X and Class R
Certificates, any remaining Monthly Excess Cashflow
Amount.
(e) Cap Reserve Fund. On each Distribution Date, following all
distributions and deposits made pursuant to subsections (a)
through (d) above, the Trustee will withdraw all funds available
in the Cap Reserve Fund (the "Cap Distribution Amount") to make
the following payments in the following order of priority:
(i) first, concurrently, to the Class []-[], Class
[]-[], Class []-[] and Class []-[] Certificates,
pro rata, any remaining applicable Interest
Distribution Amount for that Distribution Date;
(ii) second, concurrently, to the Class []-[], Class
[]-[], Class []-[] and Class []-[] Certificates,
pro rata, any remaining Class Unpaid Interest
Amounts for the classes of Senior Certificates;
(iii) third, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(iv) fourth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the
Class []-[] Certificates;
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(v) fifth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(vi) sixth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the
Class []-[] Certificates;
(vii) seventh, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(viii) eight, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the
Class []-[] Certificates;
(ix) ninth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(x) tenth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the
Class []-[] Certificates;
(xi) eleventh, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(xii) twelfth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the
Class []-[] Certificates;
(xiii) thirteenth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(xiv) fourteenth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the
Class []-[] Certificates;
(xv) fifteenth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(xvi) sixteenth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the
Class []-[] Certificates;
(xvii) seventeenth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(xviii) eighteenth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the
Class []-[] Certificates;
(xix) ninetieth, to the Class []-[] Certificates, any
remaining Interest Distribution Amount for that
Distribution Date;
(xx) twentieth, to the Class []-[] Certificates, any
remaining Class Unpaid Interest Amount for the
Class []-[] Certificates;
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(xxi) twenty-first, to fund the Cap Extra Principal
Distribution Amount for that Distribution Date in
accordance with the priorities set forth under
subsections (b) and (c) above;
(xxii) twenty-second, to pay to each Class of Offered
Certificates, any remaining Net WAC Cap Carryover
for that Class, after taking into account (a)
payments of Net WAC Cap Carryover from the Corridor
Reserve Fund made to that Class of Offered
Certificate on that Distribution Date and (b)
amounts deposited into the Net WAC Cap Account with
respect to that Class of Offered Certificate
pursuant to clause (xxxi) of subsection (d) above
(with distributions of Net WAC Carryover to the
Offered Certificates to be made on a pro rata basis
based on the related unpaid Net WAC Cap Carryover);
(xxiii) twenty-third, to fund the Cap Class []-[] Realized
Loss Amortization Amount for that Distribution
Date;
(xxiv) twenty-fourth, to fund the Cap Class []-[] Realized
Loss Amortization Amount for that Distribution
Date;
(xxv) twenty-fifth, to fund the Cap Class []-[] Realized
Loss Amortization Amount for that Distribution
Date;
(xxvi) twenty-sixth, to fund the Cap Class []-[] Realized
Loss Amortization Amount for that Distribution
Date;
(xxvii) twenty-seventh, to fund the Cap Class []-[]
Realized Loss Amortization Amount for that
Distribution Date;
(xxviii) twenty-eighth, to fund the Cap Class []-[] Realized
Loss Amortization Amount for that Distribution
Date;
(xxix) twenty-ninth, to fund the Cap Class []-[] Realized
Loss Amortization Amount for that Distribution
Date;
(xxx) thirtieth, to fund the Cap Class []-[] Realized
Loss Amortization Amount for that Distribution
Date;
(xxxi) thirty-first, to fund the Cap Class []-[] Realized
Loss Amortization Amount for that Distribution
Date; and
(xxxii) thirty-second, (a) on any Distribution Date for
which the Cap Notional Balance for that
Distribution Date exceeds the aggregate Class
Certificate Balance of the Offered Certificates for
that Distribution Date (before taking into account
all distributions of principal on that Distribution
Date), (i) to the Class X Certificates, an amount
equal to the product of (A) the Cap Distribution
Amount remaining, if any, after giving effect to
the distributions set forth in clauses (e)(i)
through (e)(xxxi) above, if any, and (B) a
fraction, expressed as a percentage, the numerator
of which is the aggregate Class Certificate Balance
of the
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Offered Certificates for that Distribution Date
(before taking into account all distributions of
principal on that Distribution Date) and the
denominator of which is the Cap Notional Balance
for that Distribution Date and (ii) to the Trustee
as additional compensation, any remaining Cap
Distribution Amount (after giving effect to any
distribution to the Class X Certificates pursuant
to the immediately preceding clause (a)(i)) and (b)
on any Distribution Date for which the Cap Notional
Balance for that Distribution Date is less than or
equal to the aggregate Class Certificate Balance of
the Offered Certificates for that Distribution Date
(before taking into account all distributions of
principal on that Distribution Date), to the Class
X Certificates, all remaining Cap Distribution
Amount.
(f) Realized Losses. Realized Losses shall be allocated first against
the Overcollateralization Amount, until the Overcollateralization
Amount has been reduced to zero. If, after giving effect to the
distribution of the Principal Distribution Amount on any
Distribution Date the aggregate Class Certificate Balance of the
Offered Certificates exceeds the Pool Principal Balance as of the
end of the related Due Period, such excess will be allocated
against the Class []-[], Class []-[], Class []-[], Class []-[],
Class []-[], Class []-[], Class []-[], Class []-[] and Class
[]-[] Certificates, in that order and until the respective Class
Certificate Balances thereof are reduced to zero.
(g) Corridor Reserve Fund. On each Distribution Date, following all
distributions and deposits made pursuant to subsections (a)
through (f) above, the Trustee will withdraw all funds available
in the Corridor Reserve Fund to make the following payments in
the following order of priority:
(i) first, to pay to each Class of Offered
Certificates, to the extent of amounts available
with respect to that Class, Net WAC Cap Carryover
for that Class (with distributions of Net WAC
Carryover to the Offered Certificates to be made on
a pro rata basis based on the related unpaid Net
WAC Cap Carryover); and
(ii) second, (a) on any Distribution Date for which the
Corridor Notional Balance for that Distribution
Date exceeds the aggregate Class Certificate
Balance of the Offered Certificates for that
Distribution Date (before taking into account all
distributions of principal on that Distribution
Date), (i) to the Class X Certificates, an amount
equal to the product of (A) the Corridor
Distribution Amount remaining, if any, after giving
effect to the distributions set forth in clause
(g)(i) above, if any, and (B) a fraction, expressed
as a percentage, the numerator of which is the
aggregate Class Certificate Balance of the Offered
Certificates for that Distribution Date (before
taking into account all distributions of principal
on that Distribution Date) and the denominator of
which is the Corridor Notional Balance for that
Distribution Date and (ii) to the Trustee as
additional compensation, any remaining Corridor
Distribution Amount (after giving effect to any
distribution to the Class X Certificates pursuant
to the immediately preceding clause (a)(i)) and (b)
on any Distribution Date for which the Corridor
Notional Balance for that Distribution Date is less
than or equal to the aggregate Class Certificate
Balance of the Offered Certificate for that
Distribution Date (before taking into account all
distributions of principal on that Distribution
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Date), to the Class X Certificates, all remaining
Corridor Distribution Amount.
(h) Net WAC Cap Carryover from Net WAC Cap Account. On each Distribution Date,
following all distributions, deposits and allocations made pursuant to
subsections (a) through (g) above, the Trustee shall distribute, pro rata,
to the Offered Certificates, the applicable Net WAC Cap Carryover for such
Distribution Date, if any, from the Net WAC Cap Account (to the extent of
available funds therein).
SECTION 4.02A. Recoveries.
(a) With respect to any Class of Subordinate Certificates to
which a Realized Loss has been allocated (including any such Class for which the
related Class Certificate Balance has been reduced to zero), the Class
Certificate Balance of such Class will be increased, up to the amount of related
Recoveries for such Distribution Date as follows:
(i) first, the Class Certificate Balance of the Class
[]-[] Certificates will be increased, up to the
amount of Net Recovery Realized Losses for such
Class;
(ii) second, the Class Certificate Balance of the Class
[]-[] Certificates will be increased, up to the
amount of Net Recovery Realized Losses for such
Class;
(iii) third, the Class Certificate Balance of the Class
[]-[] Certificates will be increased, up to the
amount of Net Recovery Realized Losses for such
Class;
(iv) fourth, the Class Certificate Balance of the Class
[]-[] Certificates will be increased, up to the
amount of Net Recovery Realized Losses for such
Class;
(v) fifth, the Class Certificate Balance of the Class
[]-[] Certificates will be increased, up to the
amount of Net Recovery Realized Losses for such
Class;
(vi) sixth, the Class Certificate Balance of the Class
[]-[] Certificates will be increased, up to the
amount of Net Recovery Realized Losses for such
Class;
(vii) seventh, the Class Certificate Balance of the Class
[]-[] Certificates will be increased, up to the
amount of Net Recovery Realized Losses for such
Class;
(viii) eighth, the Class Certificate Balance of the Class
[]-[] Certificates will be increased, up to the
amount of Net Recovery Realized Losses for such
Class; and
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(ix) ninth, the Class Certificate Balance of the Class
[]-[] Certificates will be increased, up to the
amount of Net Recovery Realized Losses for such
Class.
(b) Any increase to the Class Certificate Balance of a Class
of Certificates shall increase the Certificate Balance of each Certificate in
the related Class pro rata in accordance with each Certificate's Percentage
Interest.
SECTION 4.03. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall
post on its website at ________________________, which posting shall be
accessible to each Certificateholder, the Servicer, the Depositor and each
Rating Agency, a statement setting forth with respect to the related
distribution (provided, however, that each Certificateholder, upon request to
the Trustee, shall be entitled to receive from the Trustee a paper copy of such
statement if such Certificateholder is unable to access the Trustee's website):
(i) the applicable Record Date, Determination Date and
Distribution Date;
(ii) the amount thereof allocable to principal,
separately identifying the aggregate amount of any
Principal Prepayments in full, partial Principal
Prepayments and Liquidation Proceeds included
therein;
(iii) the amount thereof allocable to interest, any Class
Unpaid Interest Amount included in such
distribution and any remaining Class Unpaid
Interest Amount after giving effect to such
distribution;
(iv) if the distribution to the Holders of a Class of
Certificates is less than the full amount that
would be distributable to such Holders if there
were sufficient funds available therefor, the
amount of the shortfall and the allocation thereof
as between principal and interest;
(v) the Class Certificate Balance of each Class of
Certificates after giving effect to the
distribution of principal on such Distribution
Date; (vi) the Pool Principal Balance for the
following Distribution Date;
(vii) the amount of the Servicing Fee paid to or retained
by the Servicer with respect to such Distribution
Date;
(viii) the Pass-Through Rate for each Class of Offered
Certificates with respect to such Distribution
Date;
(ix) the amount of Advances included in the distribution
on such Distribution Date and the aggregate amount
of Advances outstanding as of the close of business
on such Distribution Date;
(x) the amount of the Trustee Fee paid to or retained
by the Trustee with respect to such Distribution
Date, any other fees or expenses paid from the
assets of the Trust Fund, and the identity of the
party receiving such fees or expenses;
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(xi) the number and aggregate principal amounts of Loans
(A) contractually past due (assuming 30 day months)
(exclusive of Loans in foreclosure) (1) 1 to 30
days (2) 31 to 60 days (3) 61 to 90 days and (4) 91
or more days and (B) in foreclosure (1) 1 to 30
days (2) 31 to 60 days (3) 61 to 90 days and (4) 91
or more days, as of the close of business on the
last day of calendar month immediately preceding
such Distribution Date;
(xii) with respect to any Loan that became an REO
Property during the preceding calendar month, the
loan number and Stated Principal Balance of such
Loan as of the close of business on the last day of
the Prepayment Period preceding such Distribution
Date and the date of acquisition thereof;
(xiii) (A) the total number and principal balance of any
REO Properties (and market value, if available) as
of the close of business on the last day of the
Prepayment Period preceding such Distribution Date
and (B) the total number and cumulative principal
balance of any Liquidated Loans (prior to the
reduction of the principal balance of any such
Liquidated Loan to zero);
(xiv) the amount equal to the sum of the Stated Principal
Balances of the three Loans with the largest
individual Stated Principal Balances;
(xv) with respect to each Class of Offered Certificates,
the amount of the Net WAC Cap Carryover to be paid
to such Class from the Net WAC Cap Account and the
amount remaining unpaid;
(xvi) the aggregate principal balance of Balloon Loans
with original terms less than or equal to 36 months
which are 60 or more days contractually past due
(assuming 30 day months) (including Loans in
foreclosure and REO Properties) on the last day of
the calendar month immediately preceding such
Distribution Date;
(xvii) the cumulative aggregate amount of Realized Losses
as of the last day of the Prepayment Period
preceding such Distribution Date;
(xviii) the amount of funds withdrawn from the Cap Reserve
Fund and the Corridor Reserve Fund (for each Class
of Offered Certificates) and included in such
distribution and the outstanding balance of the Cap
Reserve Fund and the Corridor Reserve Fund (and the
amounts available for each Class of Offered
Certificates), after giving effect to such
distribution;
(xix) the number of Loans repurchased by Sellers during
the Due Period related to such Distribution Date;
(xx) the weighted average Mortgage Rate of the
Outstanding Loans, such weighted average to be
calculated based on the principal balances of such
Outstanding Loans on the first day of the Due
Period related to such Distribution Date;
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(xxi) the weighted average maturity date of the
Outstanding Loans;
(xxii) the Targeted Overcollateralization Amount after
giving effect to such distribution;
(xxiii) the amount of any Overcollateralization Release
Amount included in the distribution on such
Distribution Date;
(xxiv) the cumulative amount of Realized Losses from the
Cut-off Date through the last day of the Due Period
relating to such Distribution Date;
(xxv) any Overcollateralization Deficiency after giving
effect to the distribution of principal on such
Distribution Date;
(xxvi) whether a Trigger Event has occurred and is
continuing, and the cumulative Realized Losses, as
a percentage of the Cut-off Date Pool Principal
Balance;
(xxvii) the aggregate amount of 60+ Day Delinquent Loans as
a percentage of the current Pool Principal Balance
and the six-month rolling average of 60+ Day
Delinquent Loans;
(xxviii) the amount of funds collected by the Trustee under
the Cap Agreement and the Corridor Agreement during
the Due Period relating to such Distribution Date;
(xxix) the amount of Recoveries collected during the
Prepayment Period relating to such Distribution
Date;
(xxx) the cumulative amount of Recoveries collected as of
such Distribution Date;
(xxxi) any material modifications, extensions or waivers
to the terms of the Loans during the Due Period
relating to such Distribution Date, or which have
cumulatively become material over time;
(xxxii) any material breaches under this Agreement
(including breaches the representations and
warranties set forth in Schedules IIA, IIB,
IID-IIF, IIX, IIIA, IIIB and IIID-IIIF);
(xxxiii) whether the Optional Termination Date or the
Stepdown Date has occurred; and
(xxxiv) the Senior Enhancement Percentage for such
Distribution Date.
(b) The Trustee's responsibility for posting the above
information on its website is limited to the availability, timeliness and
accuracy of the information provided by the Servicer. On or before the 18th day
of each calendar month, commencing in the month of the first Distribution Date
hereunder, or if such day is not a Business Day, the next succeeding Business
Day, the Servicer shall
78
deliver to the Trustee a report, in a form acceptable to the Trustee, containing
all of the necessary information for the Trustee to complete items (ii), (vi),
(vii), (ix)-(xiv), (xvi), (xvii), (xix)-(xxi), (xxiv), (xxvii), (xxix) and
(xxx)-(xxxii) of the statement described in (a) above. The Trustee shall be
responsible for obtaining the necessary information to complete items (i),
(iii), (iv), (v), (viii), (x), (xv), (xviii), (xxii), (xxiii), (xxv), (xxvi),
(xxviii) and (xxxii)-(xxxiv) of the statement described in (a) above.
Notwithstanding the foregoing, (i) with respect to item (xxxii), each of the
Servicer and the Trustee shall only be responsible for reporting the events
described in such item with respect to itself and for which it has received
notice thereof in compliance with the applicable provisions of this Agreement
(including, without limitation, Sections 8.02(viii) and 10.05(b)) and (ii) with
respect to item (x), the Servicer shall only be responsible for providing the
specified information with respect to any amounts payable to it under this
Agreement from assets of the Trust Fund.
(c) Within a reasonable period of time after the end of each
calendar year, but in no case later than the time prescribed by the Code and
applicable Treasury regulations, the Trustee shall cause to be furnished to each
Person who at any time during the calendar year was a Certificateholder, a
statement containing the information set forth in clauses (a)(ii), (a)(iii),
(a)(viii) and (a)(xx) 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) The Trustee shall report such other information on the
statement described in (a) above as the Depositor, the Servicer and the Trustee
may agree in writing from time to time in order to facilitate the Depositor's
compliance with Regulation AB. The Servicer and the Trustee shall cooperate in
order to determine the appropriate party responsible for the provision of such
other information within the time periods specified in clause (b) above.
SECTION 4.04. Reporting.
On each Distribution Date, the Servicer shall provide to the
Trustee current information of the type set forth in Schedule I hereto presented
in a format substantially similar to Exhibit K attached hereto and the Trustee
shall then forward such information to a reporting service mutually agreed upon
by the Servicer and the Trustee.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
The Certificates shall be substantially in the forms attached
hereto as exhibits. The Certificates shall be issuable in the minimum
denominations, integral multiples in excess thereof (except that one Certificate
in each Class may be issued in a different amount which must be in excess of the
applicable minimum denomination) and aggregate denominations per Class set forth
in the Preliminary Statement.
Subject to Section 9.02 hereof respecting the final
distribution on the Certificates, on each Distribution Date the Trustee shall
make distributions to each Certificateholder of record on the preceding Record
Date either (a) by wire transfer in immediately available funds to the account
of such Holder at a bank or other entity having appropriate facilities therefor,
if (i) such Holder has so notified the Trustee at least five Business Days prior
to the related Record Date and (ii) such Holder shall hold (A)
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100% of the Class Certificate Balance or Percentage Interest of any Class of
Certificates or (B) Certificates of any Class with an aggregate principal
Denomination of not less than $1,000,000 or (b) by check mailed by first class
mail to such Certificateholder at the address of such Holder appearing in the
Certificate Register.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to be so authorized prior to the countersignature and delivery of
such Certificates or did not hold such offices at the date of such Certificate.
No Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless countersigned by the Trustee by manual signature,
and such countersignature upon any Certificate shall be conclusive evidence, and
the only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
SECTION 5.02. Certificate Register; Registration of Transfer
and Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in the form of Exhibit G duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for
any registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) Except for the initial transfer of the Class X
Certificates and Class R Certificates, no transfer of a Class X Certificate or
Class R Certificate shall be made unless such transfer is made pursuant to an
effective registration statement under the Securities Act and any applicable
state securities
80
laws or is exempt from the registration requirements under said Act and such
state securities laws. In the event that a transfer is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, (i) the Certificateholder
desiring to effect such transfer and such Certificateholder's prospective
transferee shall each certify to the Trustee in writing the facts surrounding
the transfer, the Certificateholder by delivering a certificate in substantially
the form set forth in Exhibit G (the "TRANSFEROR CERTIFICATE") and the
Certificateholder's prospective transferee by delivering a letter in
substantially the form of either Exhibit H (the "INVESTMENT LETTER") or Exhibit
I (the "RULE 144A LETTER") or (ii) there shall be delivered to the Trustee at
the expense of the transferor an Opinion of Counsel that such transfer may be
made pursuant to an exemption from the Securities Act. The Depositor shall
provide to any Holder of a Class X Certificate or Class R Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Trustee and the Servicer shall cooperate with the Depositor in providing the
Rule 144A information referenced in the preceding sentence, including providing
to the Depositor such information regarding the Certificates, the Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Class X
Certificate or Class R Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee and the Depositor, the Sellers and
the Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received (i) a representation letter from the
transferee substantially in the form of Exhibit H or Exhibit I, to the effect
that (x) such transferee is not an employee benefit plan or arrangement subject
to Section 406 of ERISA or a plan or arrangement subject to Section 4975 of the
Code, nor a person acting on behalf of any such plan or arrangement, nor using
the assets of any such plan or arrangement to effect such transfer or (y) if the
purchaser is an insurance company and the ERISA-Restricted Certificate is not a
Class R Certificate and has been the subject of an ERISA Qualifying
Underwriting, 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 (ii) in the case of any such ERISA-Restricted Certificate presented for
registration in the name of an employee benefit plan subject to ERISA, or a plan
or arrangement subject to Section 4975 of the Code (or comparable provisions of
any subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan or arrangement, or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Trustee, which
Opinion of Counsel shall not be an expense of either the Trustee or the Trust
Fund, addressed to the Trustee to the effect that the purchase or holding of
such 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 and will not subject the Trustee to any
obligation in addition to those expressly undertaken in this Agreement or to any
liability. Notwithstanding anything else to the contrary herein, any purported
transfer of an ERISA-Restricted Certificate to or on behalf of an employee
benefit plan subject to ERISA or to the Code without the delivery to the Trustee
of an Opinion of Counsel satisfactory to the Trustee as described above shall be
void and of no effect.
In the case of an ERISA-Restricted Certificate that is a
Book-Entry Certificate, for purposes of clauses (i) or (ii) of the first
sentence of the preceding paragraph, such representations shall
81
be deemed to have been made to the Certificate Registrar and the Trustee by the
transferee's acceptance of such ERISA-Restricted Certificate.
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 Class R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate 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 Class R Certificate
may be registered on the Closing Date or thereafter transferred, and
the Trustee shall not register the Transfer of any Class R Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "TRANSFER AFFIDAVIT") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
F.
(iii) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Class R Certificate, (B) to obtain
a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of a Class R
Certificate and (C) not to Transfer its Ownership Interest in a Class R
Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that
such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any
Ownership Interest in a Class R Certificate in violation of the
provisions of this Section 5.02(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 Class R 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 Class R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that is in fact
not permitted by this Section or for making any payments due on such
Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long
as the Transfer was registered after receipt of the related Transfer
Affidavit, Transferor Certificate and either the Rule 144A Letter or
the Investment Letter. The Trustee shall be entitled but not obligated
to recover from any Holder of a Class R Certificate that was in fact
not a Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class R Certificate at and after
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either such time. Any such payments so recovered by the Trustee shall
be paid and delivered by the Trustee to the last preceding Permitted
Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Sellers
or the Servicer, to the effect that the elimination of such restrictions will
not cause the Trust Fund hereunder to fail to qualify as one or more REMICs at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Class R Certificate hereby
consents to any amendment of this Agreement which, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (A) to ensure that the
record ownership of, or any beneficial interest in, a Class R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (B) to provide for a means to compel the Transfer of a Class R
Certificate which is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and
opinions referred to above in this Section 5.02 in connection with transfer
shall be at the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Beneficial Owners and with
respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Beneficial Owners of the Book-Entry Certificates
for purposes of exercising the rights of Holders under this Agreement, and
requests and directions for and votes of such representatives shall not be
deemed to be inconsistent if they are made with respect to different Beneficial
Owners; and (vi) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Beneficial Owners.
All transfers by Beneficial Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Beneficial Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of Beneficial
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures.
If (x) (i) the 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 is unable to locate a
qualified successor, (y) the Depositor, at its sole option with the consent of
the Trustee, advises
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the Trustee in writing that it elects to terminate the book-entry system through
the Depository or (z) after the occurrence of an Event of Default or the
resignation or removal of the Servicer, Beneficial Owners representing at least
51% of the sum of the then outstanding Class Certificate Balance of all
Book-Entry Certificates together advise the Depository, either directly or
through the Depository Participants, and the Trustee in writing that the
continuation of a book-entry system through the Depository is no longer in the
best interests of the Beneficial Owners. Upon the occurrence of any of the
events described in the immediately preceding sentence, the Trustee shall notify
all Beneficial Owners of the occurrence of any such event and of the
availability of definitive, fully-registered Certificates (the "DEFINITIVE
CERTIFICATES") to Beneficial Owners requesting the same. Upon surrender to the
Trustee of the related Class of Certificates by the Depository, accompanied by
the instructions from the Depository for registration, the Trustee shall issue
the Definitive Certificates. Neither the 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
Servicer and the Trustee such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Trustee
shall execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Servicer, the Trustee and any agent of the Servicer or the
Trustee may treat the Person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions as provided
in this Agreement and for all other purposes whatsoever, and neither the
Servicer, the Trustee nor any agent of the Servicer or the Trustee shall be
affected by any notice to the contrary.
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days
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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 its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the
Servicer.
The Depositor and the Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the
Servicer.
The Depositor and the Servicer will each keep in full effect
their respective existence, rights and franchises as a corporation under the
laws of the United States or under the laws of one of the states thereof and
will each obtain and preserve their respective qualifications to do business as
a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
or any of the Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Depositor or the Servicer shall be a party, or any person
succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person to the Servicer shall
be qualified to sell mortgage loans to, and to service mortgage loans on behalf
of, FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the
Sellers, the Servicer and Others.
None of the Depositor, the Sellers, the Servicer or any of the
directors, officers, employees or agents of the Depositor, the Sellers or the
Servicer shall be under any liability to the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Sellers, the Servicer or any such
Person against any breach of representations or warranties made by it herein or
protect the Depositor, the Sellers, the Servicer or any such Person from any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties
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hereunder. The Depositor, the Sellers, the Servicer and any director, officer,
employee or agent of the Depositor, the Sellers or the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor, the Sellers,
the Servicer and any director, officer, employee or agent of the Depositor, the
Sellers or the Servicer shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to any specific Loan or Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant to
this Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Sellers or the Servicer shall be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and which in its opinion may
involve it in any expense or liability; provided, however, that any of the
Depositor, the Sellers or the Servicer may in its discretion undertake any such
action that it may deem necessary or desirable in respect of this Agreement and
the rights and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Sellers and the Servicer
shall be entitled to be reimbursed therefor out of the Certificate Account.
SECTION 6.04. Limitation on Resignation of Servicer.
The Servicer shall not resign from the obligations and duties
hereby imposed on it except (a) upon appointment of a successor servicer and
receipt by the Trustee of a letter from each Rating Agency that such a
resignation and appointment will not result in a downgrading of the rating of
any of the Certificates or (b) upon determination that its duties hereunder are
no longer permissible under applicable law. Any such determination under clause
(b) permitting the resignation of the Servicer shall be evidenced by an Opinion
of Counsel to such effect delivered to the Trustee. No such resignation shall
become effective until the Trustee or a successor servicer shall have assumed
the Servicer's responsibilities, duties, liabilities and obligations hereunder.
If the Servicer resigns for any of the foregoing reasons and the Trustee is
unwilling or unable to assume responsibility for the Servicer's duties under
this Agreement, the Trustee may take action to appoint a successor servicer in
accordance with Section 7.02 hereof.
SECTION 6.05. Indemnification.
The Servicer agrees to indemnify and hold the Trustee, the
Depositor and each Certificateholder harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs, judgments,
and any other costs, fees and expenses that the Trustee, the Depositor or any
Certificateholder may sustain directly resulting from the gross negligence or
willful misconduct of the Servicer in the performance of its duties hereunder or
in the servicing of the Loans in compliance with the terms of this Agreement.
The Servicer shall not be liable or responsible for any of the representations,
covenants, warranties, responsibilities, duties or liabilities of any prior
servicer. The Servicer shall immediately notify the Trustee, the Depositor and
each Certificateholder if a claim is made by a third party for which any of such
parties could require indemnification from the Servicer under this Section 6.05,
and the Servicer shall assume (with the consent of the Trustee) the defense of
any such claim and advance all expenses in connection therewith, including
reasonable counsel fees, and promptly advance funds to pay, discharge and
satisfy any non-appealable, final judgment or decree which may be entered
against the Servicer, the Trustee, the Depositor and/or the Certificateholder in
respect of such claim. The indemnity provided for in this Section 6.05 shall
survive the termination of the Agreement.
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ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Servicer to deposit in the
Certificate Account or remit to the Trustee any payment (other than a
payment required to be made under Section 4.01 hereof) required to be
made with respect to any Class of Certificates under the terms of this
Agreement, which failure shall continue unremedied for 5 days after the
date upon which written notice of such failure shall have been given
(a) to the Servicer by the Trustee or the Depositor or (b) to the
Servicer, the Depositor and the Trustee by the Holders of Certificates
of such Class evidencing not less than 25% of the Voting Rights
allocated to such Class;
(ii) any failure by the Servicer to duly observe or
perform in any material respect any other of the covenants or
agreements on the part of the Servicer contained in this Agreement,
which failure shall continue unremedied for a period of 30 days after
the date on which written notice of such failure shall have been given
(a) to the Servicer by the Trustee or the Depositor or (b) to the
Servicer, the Depositor and the Trustee by the Holders of Certificates
of any Class evidencing not less than 25% of the Voting Rights
allocated to such Class;
(iii) a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceeding,
or for the winding-up or liquidation of its affairs, shall have been
entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days;
(iv) the Servicer shall consent to the appointment of
a receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Servicer or all or substantially all of the property of
the Servicer;
(v) the Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations;
(vi) so long as the Servicer is a Seller, any failure
by any Seller to observe or perform in any material respect any of the
other covenants or agreements on the part of any Seller contained in
this Agreement, which failure shall continue unremedied for a period of
60 days after the date on which written notice of such failure shall
have been given to such Seller by the Trustee or the Depositor, or to
such Seller and the Trustee by the Holders of Certificates of any Class
evidencing not less than 25% of the Voting Rights allocated to such
Class; or
(vii) any failure of the Servicer to make any Advance
in the manner and at the time required to be made pursuant to Section
4.01 which continues unremedied for a period of 1 Business Day after
the date of such failure.
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If an Event of Default described in clauses (i) to (vi) of
this Section shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, and at the
direction of the Holders of Certificates of any Class evidencing not less than
25% of the Voting Rights allocated to such Class, by notice in writing to the
Servicer (with a copy to each Rating Agency) shall, terminate all of the rights
and obligations of the Servicer under this Agreement and in and to the Loans and
the proceeds thereof, other than its rights as a Certificateholder hereunder. If
an Event of Default described in clause (vii) of this Section shall occur, then,
and in each and every such case, so long as such Event of Default shall not have
been remedied, the Trustee shall, by telephonic notice to the Servicer, followed
by notice in writing (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
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder. On and after the receipt by the Servicer of such telephonic notice,
all authority and power of the Servicer hereunder, whether with respect to the
Loans or otherwise, shall pass to and be vested in the Trustee, as successor
Servicer. The Trustee shall, subject to 3.04 hereof, thereupon promptly make any
Advance described in clause (vii) hereof. The Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Loans and related documents, or otherwise.
Unless expressly provided in such written notice, no such termination shall
affect any obligation of the Servicer to pay amounts owed pursuant to Article
VIII. The Servicer agrees to cooperate with the Trustee in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee of all cash amounts which shall
at the time be credited to the Certificate Account, or thereafter be received
with respect to the Loans.
The Trustee shall be entitled to be reimbursed from the
Servicer (or by the Trust Fund if the Servicer does not fulfill its obligations
hereunder) for all costs associated with the transfer of servicing from the
predecessor Servicer, including, without limitation, any costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Loans properly and effectively,
costs reasonably allocable to specific employees and overhead, legal fees and
expenses, accounting and financial consulting fees and expenses, costs or
expenses associated with the transfer of all servicing files and costs of
amending the Agreement, if necessary. If the terminated Servicer does not pay
such reimbursement within thirty (30) days of its receipt of an invoice
therefor, such reimbursement shall be an expense of the Trust Fund and the
Trustee shall be entitled to receive such reimbursement from amounts on deposit
in the Certificate Account pursuant to Section 3.08(a)(vii)(B) or from the
Distribution Account pursuant to Section 3.08(b)(i), as applicable, in an amount
not to exceed the Trustee Permitted Withdrawal Amount and to receive all amounts
in excess of the Trustee Permitted Withdrawal Amount pursuant to Sections
4.02(a)(i)(A).
Notwithstanding any termination of the activities of the
Servicer hereunder, the Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Loan which was due prior to the notice
terminating such Servicer's rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which such Servicer would
have been entitled pursuant to Sections 3.08(a)(i) through (viii), and any other
amounts payable to such Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder.
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SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, subject to and
to the extent provided in Section 3.04, be the successor to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof and applicable law including the obligation to make Advances pursuant to
Section 4.01. As compensation therefor, the Trustee shall be entitled to all
funds relating to the Loans that the Servicer would have been entitled to charge
to the Certificate Account or Distribution Account if the Servicer had continued
to act hereunder. Notwithstanding the foregoing, if the Trustee has become the
successor to the Servicer in accordance with Section 7.01 hereof, the Trustee
may, if it shall be unwilling to so act, or shall, if it is prohibited by
applicable law from making Advances pursuant to Section 4.01 hereof or if it is
otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
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 FNMA and FHLMC approved seller/servicer in good standing, which has a
net worth of at least $10,000,000, and which is willing to service the Loans and
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, which contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer (other than liabilities of the Servicer under Section 6.03 hereof
incurred prior to termination of the Servicer under Section 7.01), with like
effect as if originally named as a party to this Agreement; and provided further
that no such delegation and assignment shall become effective unless each Rating
Agency acknowledges that its rating of the Certificates in effect immediately
prior to such delegation and assignment will not be qualified or reduced as a
result of such delegation and assignment. Pending appointment of a successor to
the Servicer hereunder, the Trustee, unless the Trustee is prohibited by law
from so acting, shall, subject to Section 3.04 hereof, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of
payments on Loans as it and such successor shall agree; provided, however, that
no such compensation shall be in excess of the Servicing Fee permitted the
Servicer hereunder. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Neither the Trustee nor any other successor servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
Any successor to the Servicer as servicer shall give notice to
the Mortgagors of such change of servicer.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice of
each such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
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SECTION 7.04. Survivability of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon
termination of the Servicer hereunder, any liabilities of the Servicer which
accrued prior to such termination shall survive such termination.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default of
which a Responsible Officer of the Trustee shall have actual knowledge and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default of which a Responsible Officer of the
Trustee shall have actual knowledge has occurred and remains uncured or waived,
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
Unless an Event of Default of which a Responsible Officer of
the Trustee shall have actual knowledge shall have occurred and be continuing,
the duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
this Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believed in good faith to be genuine and
to have been duly executed by the proper authorities respecting any matters
arising hereunder.
The Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or other officers of the Trustee, unless
it shall be finally proven that the Trustee was negligent in ascertaining the
pertinent facts.
The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance with
this Agreement or with the direction of the Holders of Certificates evidencing
not less than 25% of the Voting Rights of the Certificates relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee under this
Agreement.
Subject to the other provisions of this Agreement and without
limiting the generality of this Section 8.01, the Trustee shall have no duty (A)
to see to any recording, filing, or depositing of this Agreement or any
agreement referred to herein or any financing statement or continuation
statement
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evidencing a security interest, or to see to the maintenance of any such
recording or filing or depositing or to any re-recording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against any part of the Trust Fund other than from funds available in the
Certificate Account or (D) to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Trustee pursuant to this Agreement
believed by the Trustee to be genuine and to have been signed or presented by
the proper party or parties; provided, however, that the provisions of this
Section 8.01(D) shall not apply during any period during which the Trustee is
acting in the capacity of servicer.
Notwithstanding anything contained in this Section 8.01 to the
contrary, no provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
SECTION 8.02 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) the Trustee (acting as Trustee, Tax Matters
Person or as agent of the Tax Matters Person for any REMIC) may request
and rely upon and shall be protected in acting or refraining from
acting upon any resolution, Officers' Certificate, Opinion of Counsel,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties and
the Trustee shall have no responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(ii) the Trustee (acting as Trustee, Tax Matters
Person or as agent of the Tax Matters Person for any REMIC) may consult
with counsel, financial advisers or accountants and the advice of any
such counsel, financial advisers or accountants and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(iv) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Agreement, the Trustee
may require reasonable indemnity against such cost, expense or
liability as a condition to taking any such action. The reasonable
expense of every such examination shall be paid by the Trustee and
shall be repaid pursuant to Sections 3.08(a)(vii)(B), 3.08(b)(i), and
4.02(a)(i)(A) hereof, as applicable;
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(v) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, accountants, custodians or attorneys, and the
Trustee shall not be responsible for any misconduct or negligence on
the part of any such agent, accountant, custodian or attorney appointed
by the Trustee with due care;
(vi) the Trustee shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not assured to it, and none of the provisions
contained in this Agreement shall in any event require the Trustee to
perform, or be responsible for the manner of performance of, any of the
obligations of the Servicer under this Agreement except during such
time, if any, as the Trustee shall be the successor to, and be vested
with the rights, duties, powers and privileges of the Servicer in
accordance with the terms of this Agreement;
(vii) the Trustee shall not be liable for any loss on
any investment of funds pursuant to this Agreement (other than as
issuer of the investment security);
(viii) the Trustee shall not be required to take
notice or be deemed to have knowledge of any Event of Default (except
an event of nonpayment by the Servicer) until a Responsible Officer of
the Trustee shall have received written notice thereof, and in the
absence of receipt of such notice, the Trustee may conclusively assume
that there is no default or Event of Default;
(ix) the Trustee shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder
or in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which may be incurred therein or
thereby;
(x) the right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of such act;
(xi) the Trustee shall not be required to give any
bond or surety in respect of the execution of the Trust Fund created
hereby or the powers granted hereunder; and
(xii) anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee be liable for special,
indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Trustee has
been advised of the likelihood of such loss or damage and regardless of
the form of action.
SECTION 8.03. Trustee Not Liable for Certificates or Loans.
The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor or the Sellers, as the case may be, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Loan or related document other than with respect to the
Trustee's execution and counter-signature of the Certificates. The Trustee shall
not be accountable for the use or application
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by the Depositor or the Servicer of any of the Certificates or of the proceeds
of such Certificates or for the use and application of any funds paid to the
Depositor or the Servicer in respect of the Loans or deposited in or withdrawn
from the Certificate Account by the Depositor or the Servicer. The Trustee shall
not be responsible for the legality or validity of this Agreement or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued or intended to be issued hereunder; provided, however, that
the foregoing language shall not apply to the Trustee's obligations under this
Agreement.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates, and may otherwise deal with the parties
hereto with the same rights as it would have if it were not the Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder,
shall be entitled to withdraw from the Distribution Account on each Distribution
Date an amount equal to the Trustee Fee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
and expenses for such Distribution Date. The Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified by the Servicer and held
harmless against any loss, liability or expense (including reasonable attorney's
fees) (i) incurred in connection with any claim or legal action relating to (a)
this Agreement, (b) the Certificates or (c) the performance of any of the
Trustee's duties hereunder, other than any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence in the performance of
any of the Trustee's duties hereunder, (ii) resulting from any error in any tax
or information return prepared by the Servicer and (iii) incurred in connection
with Section 2.01(d) hereof. Such indemnity shall survive the termination of
this Agreement or the resignation or removal of the Trustee hereunder. Without
limiting the foregoing, the Servicer covenants and agrees, except as otherwise
agreed upon in writing by the Depositor and the Trustee, and except for any such
expense, disbursement or advance as may arise from the Trustee's negligence, bad
faith or willful misconduct, to pay or reimburse the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement with respect to the
following: (A) the reasonable compensation and the expenses and disbursements of
its counsel not associated with the closing of the issuance of the Certificates,
(B) the reasonable compensation, expenses and disbursements of any accountant,
engineer or appraiser that is not regularly employed by the Trustee, to the
extent that the Trustee must engage such persons to perform acts or services
hereunder and (C) printing and engraving expenses in connection with preparing
any Definitive Certificates. Except as otherwise provided herein, the Trustee
shall not be entitled to payment or reimbursement for any routine ongoing
expenses incurred by the Trustee in the ordinary course of its duties as
Trustee, Certificate Registrar, Tax Matters Person or Paying Agent hereunder or
for any other expenses.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 subject to
supervision or examination by federal or state authority and with a credit
rating which would not cause any one 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). 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
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8.06 the combined capital and surplus of such corporation or association shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section 8.06, the Trustee
shall resign immediately in the manner and with the effect specified in Section
8.07 hereof. The entity serving as Trustee may have normal banking and trust
relationships with the Depositor and its affiliates or the Servicer and its
affiliates; provided, however, that such entity cannot be an affiliate of the
Servicer other than the Trustee in its role as successor to the Servicer.
SECTION 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice of resignation to the Depositor
and the Servicer and each Rating Agency not less than 60 days before the date
specified in such notice when, subject to Section 8.08, such resignation is to
take effect, and acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to resign
after written request thereto by the Depositor, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a tax
is imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor or the Servicer may
remove the Trustee, and shall, within 30 days after such removal, appoint a
successor trustee by written instrument, in triplicate, one copy of which
instrument shall be delivered to the Trustee, one copy of which shall be
delivered to the Servicer and one copy to the successor trustee.
The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered by the successor trustee to the Servicer, one complete set to
the Trustee so removed and one complete set to the successor so appointed.
Notice of any removal of the Trustee shall be given to each Rating Agency by the
successor trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
hereof shall execute, acknowledge and deliver to the Depositor and to its
predecessor trustee and the Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Servicer and the predecessor trustee
shall execute and deliver such instruments and do such other things as may
reasonably
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be required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 hereof and its
appointment shall not adversely affect the then current rating of the
Certificates.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the succession
of such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 8.06 hereof without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the prior written approval of
the Servicer. If the Servicer shall not have joined in such appointment within
15 days after the receipt by it of a request to do so, or in the case an Event
of Default shall have occurred and be continuing, the Trustee alone shall have
the power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 and no notice to Certificateholders of the appointment of any
co-trustee or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) to the extent necessary to effectuate the
purposes of this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee, except for the
obligation of the Trustee under this Agreement to advance funds on
behalf of the Servicer, shall be conferred or imposed upon and
exercised or performed by the 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
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as Trustee hereunder or as successor to the Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) no trustee hereunder shall be held personally
liable by reason of any act or omission of any other trustee hereunder
and such appointment shall not, and shall not be deemed to, constitute
any such separate trustee or co-trustee as agent of the Trustee;
(iii) the Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee; and
(iv) the Servicer, and not the Trustee, shall be
liable for the payment of reasonable compensation, reimbursement and
indemnification to any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the separate trustees and
co-trustees, when and as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article VIII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to the Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 8.11. Tax Matters.
It is intended that the assets with respect to which any REMIC
election is to be made, as set forth in the Preliminary Statement, shall
constitute, and that the conduct of matters 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 each REMIC created
hereunder and that in such capacity it shall: (a) prepare and file, or cause to
be prepared and filed, in a timely manner, U.S. Real Estate Mortgage Investment
Conduit Income Tax Returns (Forms 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and filed
with the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to each
REMIC created hereunder, containing such information and at the times and in the
manner as may be required by the Code or regulations, rules or procedures issued
under the Code, or state or local tax laws, regulations, or rules, and furnish
or cause to be furnished to Certificateholders the schedules, statements or
information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish
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or cause to be furnished to the Internal Revenue Service, on Forms 8811 or as
otherwise may be required by the Code, the name, title, address, and telephone
number of the person that the holders of the Certificates may contact for tax
information relating thereto, together with such additional information as may
be required by such Form, and update such information at the time or times in
the manner required by the Code; (c) make or cause to be made elections that
such assets be treated as a REMIC on the federal tax return for its first
taxable year (and, if necessary, under applicable state law); (d) prepare and
forward, or cause to be prepared and forwarded, to the Certificateholders and to
the Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including without limitation, the
calculation of any original issue discount using the prepayment assumption
described in the Prospectus Supplement; (e) provide information necessary for
the computation of tax imposed on the transfer of a Class R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a non-Permitted Transferee, or a pass-through
entity in which a non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax); (f) to the extent that they are under its
control, conduct matters relating to such assets at all times that any
Certificates are outstanding so as to maintain the REMIC status of each REMIC
created hereunder 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 of the REMICs 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 each REMIC created hereunder prior to its termination when and as the
same shall be due and payable (but such obligation shall not prevent the Trustee
or any other appropriate Person from contesting any such tax in appropriate
proceedings and shall not prevent the Trustee from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings); (i) ensure
that federal, state or local income tax or information returns shall be signed
by the Trustee or such other person as may be required to sign such returns by
the Code or state or local laws, regulations or rules; (j) maintain records
relating to each REMIC created hereunder, including, but not limited to, the
income, expenses, assets, and liabilities thereof and the fair market value and
adjusted basis of the assets determined at such intervals as may be required by
the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and (k) as and when necessary and appropriate,
represent 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
each REMIC created hereunder, and otherwise act on behalf of each REMIC created
hereunder in relation to any tax matter or controversy involving it.
In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within ten (10) days after the Closing Date all information or data that
the Trustee requests in writing and determines to be relevant for tax purposes
to the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Loans. Thereafter, the Depositor shall provide to the
Trustee promptly upon written request therefor, any such additional information
or data that the Trustee may, from time to time, reasonably request to enable
the Trustee to perform its duties as set forth herein. The Depositor hereby
indemnifies the Trustee for any losses, liabilities, damages, claims or expenses
of the Trustee arising from any errors or miscalculations of the Trustee that
result from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Trustee on a timely basis.
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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 any REMIC created hereunder as defined
in Section 860G(c) of the Code, on any contribution to any REMIC created
hereunder after the Startup Day pursuant to Section 860G(d) of the Code, or any
other tax is imposed, if not paid as otherwise provided for herein, such tax and
all other related costs shall be paid by (i) the Trustee, if such tax arises out
of or results from a breach by the Trustee of any of its obligations under this
Agreement, (ii) the Servicer, or if such tax arises out of or results from a
breach by the Servicer or a Seller of any of their obligations under this
Agreement, (iii) the Sellers, if any tax arises out of or results from any
Seller's obligation to repurchase a Loan pursuant to Section 2.02 or 2.03 or
(iv) in all other cases, or if the Trustee, the Servicer or a Seller fails to
honor its obligations under the preceding clause (i),(ii) or (iii), such tax
will be paid with amounts otherwise to be distributed to the Certificateholders,
as provided in Section 3.08(b).
SECTION 8.12. Periodic Filings.
The Depositor shall prepare, execute and file all periodic
reports required under the Exchange Act. In connection with the preparation and
filing of such periodic reports, the Servicer shall timely provide to the
Depositor all material information available to it which is required to be
included in such reports and not known to it to be in the possession of the
Depositor and such other information as the Depositor reasonably may request
from it and otherwise reasonably shall cooperate with the Depositor. The
Depositor shall have no liability with respect to any failure to properly
prepare or file such periodic reports resulting from or relating to the
Depositor's inability or failure to obtain any information not resulting from
its own gross negligence or willful misconduct. The Servicer and the Trustee
shall reasonably cooperate with the Depositor to enable the Depositor to satisfy
its reporting requirements under the Exchange Act and its obligations under
Regulation AB.
SECTION 8.13. Appointment of Custodians.
The Trustee may, with the consent of the Servicer, appoint one
or more custodians (each, a "CUSTODIAN") to hold all or a portion of the
Trustee's Mortgage Files as agent for the Trustee, by entering into a custodial
agreement ("CUSTODIAL AGREEMENT"). The Trustee agrees to comply with the terms
of each Custodial Agreement and to enforce the terms and provisions thereof
against the Custodian for the benefit of the Certificateholders. The Trustee
shall be liable for the fees of any Custodian appointed hereunder. Each
Custodian shall be a depository institution subject to supervision by federal or
state authority and shall be qualified to do business in the jurisdiction in
which it holds any Trustee's Mortgage File. In the event that the Trustee
appoints a Custodian, it shall cause the Custodial Agreement to include a
provision pursuant to which the Custodian agrees to deliver any attestations,
certificates or reports or other information required for the Depositor to
comply with Regulation AB.
SECTION 8.14. Trustee May Enforce Claims Without Possession
of Certificates.
All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, any such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.
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The Trustee shall afford the Sellers, the Depositor, the
Servicer and each Certificateholder, upon reasonable notice during normal
business hours, access to all records maintained by the Trustee in respect of
its duties hereunder and reasonable access to officers of the Trustee
responsible for performing such duties, or such other employees who can provide
the information required. Upon request, the Trustee shall furnish the Sellers,
the Depositor, the Servicer and each Certificateholder with its most recent
financial statements. The Trustee shall cooperate fully with the Sellers, the
Servicer, the Depositor and such Certificateholder and shall make available to
the Sellers, the Servicer, the Depositor and such Certificateholder for review
and copying at the expense of the party requesting such copies, such books,
documents or records as may be requested with respect to the Trustee's duties
hereunder. The Sellers, the Depositor, the Servicer and the Certificateholders
shall not have any responsibility or liability for any action or failure to act
by the Trustee and are not obligated to supervise the performance of the Trustee
under this Agreement or otherwise.
SECTION 8.15. Suits for Enforcement.
In case an Event of Default or other default by the Servicer
hereunder shall occur and be continuing, the Trustee, in its discretion, may
proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Trustee or the
Certificateholders.
SECTION 8.16. Trustee's Annual Servicing Statement;
Independent Public Accountants' Attestation.
(a) The Trustee shall deliver to the Depositor and the
Servicer, not later than March 15 of each calendar year in which the Depositor
is required to file an annual report on Form 10-K with respect to the Trust
Fund, commencing with the calendar year following the calendar year in which the
Closing Date occurs, a report regarding the Trustee's assessment of its
compliance with the Servicing Criteria, which assessment of compliance shall, at
a minimum, address the criteria identified as applicable on Exhibit N attached
hereto (as the same may be amended from time to time). Copies of such report
shall be provided by the Servicer to any Certificateholder, without charge, upon
the written request of such Certificateholder, provided such report is delivered
by the Trustee to the Servicer. Such report shall contain the following
statements (which statements shall be based on the activities the Trustee
performs with respect to asset-backed securities transactions taken as a whole
involving the Trustee that are backed by the same asset type as the Loans):
(i) a statement by the Trustee of its responsibility
for assessing compliance with the Servicing Criteria applicable to the Trustee;
(ii) a statement by the Trustee that it used the
Servicing Criteria to assess compliance with the Servicing Criteria applicable
to the Trustee;
(iii) a statement by the Trustee as to which of the
Servicing Criteria, if any, are not applicable to the Trustee;
(iv) a statement by the Trustee assessing the Trustee's
compliance with the applicable Servicing Criteria as of the last day of the
immediately preceding calendar year and covering
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the period of the preceding calendar year, which shall disclose any material
instance of noncompliance with respect thereto; and
(v) a statement by the Trustee that a registered public
accounting firm has issued an attestation report on the Trustee's assessment of
compliance with the applicable Servicing Criteria as of the last day of the
immediately preceding calendar year and covering the period of the preceding
calendar year.
(b) Not later than March 15 of each calendar year in which the
Depositor is required to file an annual report on Form 10-K with respect to the
Trust Fund, commencing with the calendar year following the calendar year in
which the Closing Date occurs, the Trustee, at its expense, shall cause a
registered public accounting firm which is a member of the American Institute of
Certified Public Accountants to furnish to the Depositor and the Servicer a
report by such accounting firm that attests to, and reports on, the assessment
made by the Trustee pursuant to Section 8.16(a) hereof, meeting the requirements
of Item 1122(b) of Regulation AB. Such attestation shall be in accordance with
the Exchange Act and Regulation S-X under the Securities Act. Copies of such
report shall be provided by the Servicer to any Certificateholder, without
charge, upon the written request of such Certificateholder, provided such report
is delivered by the Trustee to the Servicer.
SECTION 8.17. Engagement by Trustee of Affiliates or Third
Parties.
Notwithstanding anything herein to the contrary, for so long
as the Depositor is subject to Exchange Act reporting with respect to the Trust
Fund:
to the extent the Trustee engages any affiliate or third
party, in connection with the performance of any of its material duties under
this Agreement (including, without limitation, any co-trustee or separate
trustee pursuant to Section 8.10 hereof), the Trustee shall immediately notify
the Depositor in writing of such engagement. To the extent the Depositor
notifies the Trustee that it has determined that such affiliates or third
parties are participating in the servicing function with respect to the Loans,
within the meaning of Item 1122 of Regulation AB, the Trustee shall cause such
affiliates or third parties to prepare a separate annual assessment and
attestation report, as contemplated by Section 8.16 of this Agreement, and
deliver such report to the Trustee as set forth in Section 8.16 of this
Agreement. In addition, to the extent the Trustee or such affiliate or third
parties meet the criteria in Item 1108(a)(2)(i), (ii) or (iii) of Regulation AB
and the Depositor notifies the Trustee that it has determined that the Trustee
or such affiliate or third parties would be a "servicer" within the meaning of
Item 1101 of Regulation AB, the Trustee shall, and shall cause such affiliate or
third parties to, prepare a separate annual compliance statement as contemplated
by Section 3.15 of this Agreement and deliver such statement to the Depositor as
set forth in Section 3.15 of this Agreement. Furthermore, if the Trustee or such
affiliate or third parties meet the criteria in Item 1108(a)(2)(i), (ii) or
(iii) of Regulation AB and the Depositor determines that the Trustee or such
affiliate or third parties would be a "servicer" within the meaning of Item 1101
of Regulation AB, the Trustee shall cause such affiliate or third parties to
provide the Depositor the information required by Item 1108(b) and 1108(c) of
Regulation AB within two (2) Business Days following such engagement.
SECTION 8.18. Representations and Warranties of the Trustee.
The Trustee hereby represent and warrants to the Depositor and
the Servicer, as of the date of the Preliminary Prospectus Supplement, the
Prospectus Supplement and the Closing Date that:
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(a) there are no material pending legal or other proceedings
against the Trustee, that, individually or in the aggregate, would have a
material adverse impact on the Certificateholders; and
(b) there are no affiliations, relationships or transactions
relating to the Trustee and the Depositor, the Servicer, the Sellers, the
Underwriters or the Counterparty of a type described in Item 1119 of Regulation
AB.
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all
Loans.
Subject to Section 9.03, the obligations and responsibilities
of the Depositor, the Servicer and the Trustee created hereby with respect to
the Trust Fund shall terminate upon the earlier of (a) the purchase by the
Servicer of all Loans (and REO Properties) remaining in the Trust Fund at a
price equal to the sum of (i) 100% of the Stated Principal Balance of each Loan
plus accrued and unpaid interest thereon at the applicable Mortgage Rate and
(ii) 100% of the Stated Principal Balance of each Loan related to any REO
Property plus accrued and unpaid interest thereon at the applicable Mortgage
Rate (the "TERMINATION PRICE"); provided, however, that in no event shall the
Termination Price be less than (1) with respect to the Offered Certificates,
100% of their then outstanding principal balance, (2) with respect to the
Offered Certificates, any accrued and unpaid interest thereon at the applicable
Pass-Through Rate (including any Class Unpaid Interest Amounts) and (3) with
respect to the Offered Certificates, any accrued and unpaid Net WAC Cap
Carryover as of such Distribution Date, or (b) the later of (i) the maturity or
other liquidation of the last Loan remaining in the Trust Fund (or any Advance
with respect thereto) and the disposition of all REO Property and (ii) the
distribution to Certificateholders of all amounts required to be distributed to
them pursuant to this Agreement. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death of
the survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the
United States to the Court of St. Xxxxx, living on the date hereof or (ii) the
Latest Possible Maturity Date. The right to purchase all Loans and REO
Properties pursuant to clause (a) above shall be conditioned upon the Pool
Principal Balance, at the time of any such repurchase, aggregating less than ten
percent (10%) of the Cut-off Date Pool Principal Balance. If the Servicer elects
to exercise its purchase right pursuant to clause (a) above, the Servicer's
right to reimbursement from the Trust Fund for any Advances previously made on
the Loans being purchased shall terminate as of the date the purchase of the
Loans and REO Properties is completed.
SECTION 9.02. Final Distribution on the Certificates.
If on any Determination Date, the Servicer determines that
there are no Outstanding Loans and no other funds or assets in the Trust Fund
other than the funds in the Certificate Account, the Servicer shall direct the
Trustee in writing promptly to send a final distribution notice to each
Certificateholder. If the Servicer elects to terminate the Trust Fund pursuant
to clause (a) of Section 9.01, at least 20 days prior to the date notice is to
be mailed to the affected Certificateholders, the Servicer shall notify in
writing the Depositor and the Trustee of the date the Servicer intends to
terminate the Trust Fund and of the applicable repurchase price of the Loans and
REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to Certificateholders mailed not earlier than the 10th
day
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and not later than the 15th day of the month next preceding the month of such
final distribution. Any such notice shall specify (a) the Distribution Date
upon which final distribution on the Certificates will be made upon presentation
and surrender of Certificates at the office therein designated, (b) the amount
of principal to be included in such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Servicer will give such notice
to each Rating Agency at the time such notice is given to Certificateholders.
In the event such notice is given, the Servicer shall cause
all funds in the Certificate Account to be remitted to the Trustee for deposit
in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. Upon such final deposit with respect to the Trust Fund and the
receipt by the Trustee of a Request for Release therefor, the Trustee shall
promptly release to the Servicer the Mortgage Files for the Loans.
Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to Certificateholders of each Class, in
the order set forth in Section 4.02 hereof, on the final Distribution Date and
in proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to the Offered
Certificates, the Class Certificate Balance of each Class thereof plus accrued
interest thereon and (ii) as to the Class R Certificates, the amount, if any,
which remains on deposit in the Distribution Account (other than the amounts
retained to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund, on a pro-rata basis among the
remaining Certificateholders. If within one year after the second notice all
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets of
the Trust Fund which remain subject hereto.
SECTION 9.03. Additional Termination Requirements.
(a) In the event the Servicer exercises its purchase option as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Servicer, to the effect that the
failure to comply with the requirements of this Section 9.03 will not (i) result
in the imposition of taxes on "prohibited transactions" on any REMIC created
hereunder as defined in section 860F of the Code, or (ii) cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(1) Within 90 days prior to the final Distribution
Date set forth in the notice given by the Servicer under Section 9.02,
the Servicer shall prepare and the Trustee, at the expense of the Tax
Matters Person, shall adopt a plan of complete liquidation within the
meaning of section 860F(a)(4) of the Code which, as evidenced by an
Opinion of Counsel (which opinion
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shall not be an expense of the Trustee or the Tax Matters Person),
meets the requirements of a qualified liquidation; and
(2) Within 90 days after the time of adoption of such
a plan of complete liquidation, the Trustee shall sell all of the
assets of the Trust Fund to the Servicer for cash in accordance with
Section 9.01.
(b) The Trustee as agent for each REMIC created hereunder
hereby agrees to adopt and sign such a plan of complete liquidation upon the
written request of the Servicer, and the receipt of the Opinion of Counsel
referred to in Section 9.03(a)(1) and to take such other action in connection
therewith as may be reasonably requested by the Servicer.
(c) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Servicer to prepare and the Trustee to adopt and
sign a plan of complete liquidation.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Sellers, the Servicer and the Trustee, without the consent of any
of the Certificateholders, (a) to cure any ambiguity, (b) to correct or
supplement any provisions herein which may be defective or inconsistent with any
other provisions herein, (c) to conform this Agreement to the Prospectus
Supplement or to facilitate compliance with Regulation AB, (d) to make any other
revisions relating to matters or questions arising under this Agreement,
provided that any such revisions shall not be inconsistent with the provisions
of this Agreement or (e) to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or helpful to (i) maintain the qualification
of the Trust Fund as one or more REMICs under the Code or (ii) avoid or minimize
the risk of imposition of any tax on any REMIC; provided that, (x) in the case
of clauses (a) - (d), that amendment will not adversely affect in any material
respect the interests of any Certificateholders covered by this Agreement as
evidenced either by an Opinion of Counsel to that effect or the delivery to the
Trustee of written notification from each Rating Agency that provides, at the
request of the Depositor, a rating for the Offered Certificates, of the related
series to the effect that that amendment or supplement will not cause that
Rating Agency to lower or withdraw the then current rating assigned to those
Certificates, and (y) in the case of clause (e), the Trustee has received an
Opinion of Counsel (which opinion shall not be an expense of the Trustee or the
Trust Fund) to the effect that the amendment is necessary or helpful to (i)
maintain the qualification of the Trust Fund as one or more REMICs under the
Code or (ii) avoid or minimize the risk of imposition of any tax on any REMIC,
as applicable.
This Agreement may also be amended from time to time by the
Depositor, the Sellers, the Servicer and the Trustee with the consent of the
Holders of Percentage Interests of at least 66% of each Class of Certificates
affected thereby for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (a) 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 or (b) 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.
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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 Trust Fund to fail to qualify as one or more REMICs at any time that
any Certificates are outstanding. Prior to the execution of any amendment to
this Agreement, the Trustee shall be entitled to receive and rely upon an
Opinion of Counsel (which opinion shall not be at the expense of the Trustee or
the Trust Fund) stating that the execution of such amendment is authorized or
permitted by this Agreement. The Trustee may, but shall not be obligated to,
enter into any such amendment that affects the Trustee's own rights, duties or
immunities under this Agreement.
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 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.
SECTION 10.02. Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Servicer at its expense, but only upon
direction by the Trustee accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts, taken
together, shall constitute one and the same instrument.
SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAW PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the
conveyance of the Loans by the Sellers to the Depositor pursuant to Article II
of this Agreement be, and be construed as, an absolute sale thereof to the
Depositor. It is, further, not the intention of the parties that such conveyance
be deemed a
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pledge thereof by the Sellers to the Depositor to secure a borrowing by
the Sellers from the Depositor. However, in the event that, notwithstanding
the intent of the parties, such assets are held to be the property of the
Sellers or any one of them, or if this Agreement is held or deemed to constitute
or have created a loan, lending transaction or an extension of credit by the
Depositor to the Sellers or any one of them, then and only then (i) this
Agreement shall be deemed, effective as of ______________, 20__, to be a
security agreement within the meaning of the Uniform Commercial Code of the
State of New York and (ii) the conveyance by the Sellers to the Depositor
provided for in this Agreement shall be deemed, effective as of _____________,
20___, to be an assignment and a grant by the Sellers to the Depositor, and each
of the Sellers does hereby grant and assign to the Depositor, a security
interest in, and lien upon, all of the assets that constitute the Collateral,
whether now owned or hereafter acquired.
The Sellers, for the benefit of the Depositor, shall, in
connection with the perfection of the security interest described in the
preceding paragraph of this Section 10.04, deliver to the Depositor on the
Closing Date the financing statements described in Schedule IV. The Sellers
shall also arrange for the delivery to the Depositor of any appropriate Uniform
Commercial Code continuation statements as may be necessary or appropriate to
continue the perfection of the security interest of the Depositor in the
Collateral, whether now owned or hereafter acquired. The Sellers, for the
benefit of the Depositor, shall, to the extent consistent with this Agreement,
take such actions as may be necessary to ensure that, if this Agreement is held
or deemed to constitute or have created a loan, lending transaction or an
extension of credit by the Depositor to the Sellers or any one of them, then and
only then (i) this Agreement shall be deemed, effective as of ______________,
20___, to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York and (ii) the conveyance by the Sellers to the
Depositor provided for in this Agreement shall be deemed, effective as of
_______________, 20___, to be an assignment and a grant by the Sellers to the
Depositor, and each of the Sellers does hereby grant and assign to the
Depositor, a security interest in, and lien upon, all of the assets that
constitute the Collateral, whether now owned or hereafter acquired, such
security interest shall be deemed to be a perfected security interest of first
priority under applicable law, and will be maintained as such throughout the
term of this Agreement. The Sellers shall arrange for filing any appropriate
Uniform Commercial Code financing statements, continuation statements or other
appropriate forms, notices or documents in connection with any security interest
granted or assigned to the Depositor.
The Depositor does hereby assign the security interest in and
lien on the Collateral, whether now owned or hereafter acquired, to the Trustee
for the benefit of the Certificateholders. The Depositor shall arrange for
filing of such Uniform Commercial Code financing statements as are necessary to
effect the assignment of the security interest and lien to the Trustee for the
benefit of the Certificateholders.
It is the express intent of the parties hereto that the
conveyance of the Trust Fund by the Depositor to the Trustee pursuant to Article
II of this Agreement be, and be construed as, an absolute sale thereof to the
Trustee. It is, further, not the intention of the parties that such conveyance
be deemed a pledge thereof by the Depositor to the Trustee to secure a borrowing
by the Depositor from the Trustee. However, in the event that, notwithstanding
the intent of the parties, the assets constituting the Trust Fund are held to be
the property of the Depositor, or if this Agreement is held or deemed to
constitute or have created a loan, lending transaction or an extension of credit
by the Trustee to the Depositor, then and only then (i) this Agreement shall be
deemed, effective as of ____________, 20___, to be a security agreement within
the meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyance by the Depositor to the Trustee provided for in this Agreement shall
be deemed, effective as of ________, 20___, to be an assignment and a grant by
the Depositor to the Trustee, and the Depositor does hereby grant and assign to
the Trustee, for the benefit of the Certificateholders, a security interest in,
and lien upon, all of the assets that constitute the Collateral, whether now
owned or hereafter acquired.
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The Depositor, for the benefit of the Trustee and the
Certificateholders, shall, in connection with the perfection of the security
interest described in the preceding paragraph of this Section 10.04, deliver to
the Trustee on the Closing Date the financing statements described in Schedule
V. The Depositor shall also arrange for the delivery to the Trustee of any
appropriate Uniform Commercial Code continuation statements as may be necessary
or appropriate to continue the perfection of the security interest of the
Trustee in the Trust Fund, and all of the proceeds thereof, whether now owned or
hereafter acquired. The Depositor, for the benefit of the Trustee and the
Certificateholders, shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement is held or
deemed to constitute or have created a loan, lending transaction or an extension
of credit by the Trustee to the Depositor, then and only then (i) this Agreement
shall be deemed, effective as of ____________, 20___, to be a security agreement
within the meaning of the Uniform Commercial Code of the State of New York and
(ii) the conveyance by the Depositor to the Trustee provided for in this
Agreement shall be deemed, effective as of _____________, 20___, to be an
assignment and a grant by the Depositor to the Trustee, and the Depositor does
hereby grant and assign to the Trustee, for the benefit of the
Certificateholders, a security interest in, and lien upon, all of the assets
that constitute the Collateral, whether now owned or hereafter acquired, such
security interest shall be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement. The Servicer shall, within ten (10) days of the Closing Date,
present to the appropriate filing offices in the jurisdictions set forth on
Schedules IV and V all of the financing statements delivered on the Closing Date
by the Sellers to the Depositor, the assignments thereof delivered by the
Depositor to the Trustee on the Closing Date and the financing statements
delivered by the Depositor to the Trustee on the Closing Date. The Servicer
shall arrange for filing any appropriate Uniform Commercial Code continuation
statements or other appropriate forms, notices or documents in connection with
any security interest granted or assigned to the Trustee.
SECTION 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency and the Underwriters with respect to each of the
following of which it has actual knowledge:
1. any material change or amendment to this
Agreement;
2. the occurrence of any Event of Default that has
not been cured;
3. the resignation or termination of the Servicer or
the Trustee and the appointment of any successor;
4. the repurchase or substitution of Loans pursuant
to Section 2.03; and
5. the final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating
Agency and the Underwriters copies of the following:
1. each report to Certificateholders described in
Section 4.03;
2. each annual statement as to compliance described
in Section 3.15;
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3. each annual independent public accountants'
servicing report described in Section 3.16; and
4. any notice of a purchase or sale of a Loan
pursuant to Section 2.02, 2.03 or 3.11.
(b) Except as expressly provided otherwise in this Agreement,
all directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered to the following addresses or such
other addresses as may hereafter be furnished in writing to the Servicer and the
Trustee: (a) in the case of the Depositor, Popular ABS, Inc., 000 Xxxxxxxx
Xxxxxxxx, 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Chief
Financial Officer, facsimile number: (000) 000-0000, (b) in the case of the
Servicer, Equity One, Inc., 000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000,
Attention: Chief Financial Officer, facsimile number: (000) 000-0000, (c) in the
case of any of the Sellers, to that Seller c/o Equity One, Inc., 000 Xxxxxxxxxx
Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000, Attention: Chief Financial Officer, facsimile
number: (000) 000-0000, (d) in the case of the Trustee,
_______________________________________________, Attention: ___________________,
Popular ABS []-[], facsimile number: (___) ___-____, (e) in the case 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 the Underwriters, (i)
___________________________, Attention: General Counsel, facsimile number: (___)
___-____ and (ii) ___________________________, Attention: ________________,
facsimile number: (___) ___-____. Notices to Certificateholders shall be deemed
given when mailed, first class postage prepaid, to their respective addresses
appearing in the Certificate Register. Telephonic notice to the Servicer
pursuant to Section 7.01 hereof shall be deemed to have been duly given when the
Trustee has delivered such notice via a direct, in-person telephone conversation
with the Chief Financial Officer of the Servicer at (000) 000-0000 or such other
telephone number as the Servicer may provide to the Trustee in writing in
accordance with the notice provisions of this Section 10.05(b).
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 and the Depositor.
SECTION 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the trust created hereby, nor entitle
such Certificateholder's legal representative or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
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No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as herein
provided, and unless the Holders of Certificates evidencing not less than 25% of
the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 10.09. Inspection and Audit Rights.
The Servicer agrees that, on reasonable prior notice, it will
permit and will cause each Subservicer to permit any representative of the
Depositor or the Trustee during the Servicer's normal business hours, to examine
all the books of account, records, reports and other papers of the Servicer
relating to the Loans, to make copies and extracts therefrom, to cause such
books to be audited by independent certified public accountants selected by the
Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Loans with its officers, employees and independent public
accountants (and by this provision the Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense incident to the exercise by the Depositor
or the Trustee of any right under this Section 10.09 shall be borne by the party
requesting such inspection; all other such expenses shall be borne by the
Servicer or the related Subservicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor and the Trustee that the
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.
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SECTION 10.11. The Closing.
The closing of the transactions contemplated by this Agreement
shall occur at 10:00 a.m. Philadelphia time on the Closing Date at the Closing
Place.
SECTION 10.12. Interpretation.
Unless the context of this Agreement clearly requires
otherwise, (a) references to the plural include the singular, the singular the
plural, the part the whole, (b) references to one gender includes all genders,
(c) "or" has the inclusive meaning frequently identified with the phrase
"and/or," (d) "including" has the inclusive meaning frequently identified with
the phrase "but not limited to" and (e) references to "hereunder," "hereof" or
"herein" relate to this Agreement. The section and other headings contained in
this Agreement are for reference purposes only and shall not control or affect
the construction of this Agreement or the interpretation thereof in any respect.
Section, subsection, schedule and exhibit references are to this Agreement
unless otherwise specified.
SECTION 10.13. Material Litigation; Affiliations.
So long as the Depositor is subject to Exchange Act reporting
with respect to the Trust Fund, on of before the 18th day of each calendar
month, or if such day is not a Business Day, the next succeeding Business Day,
the Sellers, the Depositor, the Trustee and the Servicer shall notify the
Depositor and the Trustee of any proceedings of the type described in Item 1117
of Regulation AB, together with a description thereof, that were commenced or
terminated in the related Due Period. In addition, the Trustee and the Servicer
shall notify the Depositor and the Trustee of any affiliations or relationships
that develop following the Closing Date between the Depositor, the Trustee or
the Servicer and any of the parties listed in Item 1119 of Regulation AB,
together with a description thereof, no later than March 15 of any calendar year
in which the Depositor is required to file an annual report on Form 10-K with
respect to the Trust Fund (or such earlier time as may be required under the
Exchange Act or Regulation AB).
SECTION 10.14. No Partnership.
Nothing herein contained shall be deemed or construed to
create a co-partnership or joint venture between the parties hereto and the
services of the Trustee and the Servicer shall be rendered as an independent
contractor and not as agent for the Certificateholders.
SECTION 10.15. Protection of Assets.
(a) Except for transactions and activities entered into in
connection with the securitization that is the subject of this Agreement, the
Trust Fund created by this Agreement is not authorized and has no power to:
(1) borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate
or sell assets;
(3) engage in any business or activities.
(b) Each party to this agreement agrees that it will not file
an involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.
109
SECTION 10.16. Execution of Master Agreement.
The Depositor hereby directs the Trustee to execute, deliver
and perform its obligations under, and make the representations contained in,
the Master Agreement (including the Cap Agreement and the Corridor Agreement) on
the Closing Date and thereafter on behalf of, and for the benefit of, the
Certificateholders.
The Trustee acknowledges and agrees that at the direction of
the Depositor or the Servicer, it shall initiate a Regulation AB Request (as
defined in the Schedule to the Master Agreement) with respect to such subject
matter as the Depositor or the Servicer may determine is necessary from time to
time. The Trustee shall direct the Counterparty to forward any information in
response to such Regulation AB Request directly to the Depositor and the
Servicer, and the Trustee shall reasonably cooperate with the Depositor and the
Servicer to enforce any such Regulation AB Request pursuant to the terms of the
Master Agreement.
The Sellers, the Depositor, the Servicer and the Holders of
the Offered Certificates (by their acceptance of such Certificates) acknowledge
and agree that the Trustee is executing, delivering and performing its
obligations under, and making the representations contained in, the Master
Agreement and shall do so solely in its capacity as Trustee of the Trust Fund
and not in its individual capacity.
* * * * * *
110
IN WITNESS WHEREOF, the Depositor, the Trustee, each of the
Sellers and the Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
POPULAR ABS, INC., a Delaware corporation, as
Depositor
By:
------------------------------------------------
[], []
______________________________, a
____________________________________, as Trustee
By:
------------------------------------------------
[], []
EQUITY ONE, INC., a Delaware corporation, as
Servicer
By:
------------------------------------------------
[], []
______________________, a _______________________,
as a Seller
By:
------------------------------------------------
[], []
______________________, a _______________________,
as a Seller
By:
------------------------------------------------
[], []
______________________, a _______________________,
as a Seller
By:
------------------------------------------------
[], []
SIGNATURE PAGE
POOLING AND SERVICING AGREEMENT []-[]
______________________, a _______________________,
as a Seller
By:
------------------------------------------------
[], []
SIGNATURE PAGE
POOLING AND SERVICING AGREEMENT []-[]
SCHEDULE I
Loan Schedule
SEE ATTACHED
S-I-1
SCHEDULE IIA
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
Representations and Warranties of []
_____________________ ("SELLER") hereby makes the
representations and warranties set forth in this Schedule IIA to the Depositor
and the Trustee as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans being conveyed by Seller. Capitalized
terms used but not otherwise defined in this Schedule IIA shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement (the "POOLING
AND SERVICING AGREEMENT") relating to the above-referenced Series, among Seller,
the other Sellers and the Servicer identified therein, Popular ABS, Inc., as
depositor, and ___________________, as trustee. The term "AGREEMENT" shall be
used in this Schedule to refer to the Pooling and Servicing Agreement.
(1) Seller is duly organized as a _____________________ and is validly
existing and in good standing under the laws of the State of
______________ and is duly authorized and qualified to transact any and
all business contemplated by the Agreement to be conducted by Seller
under the laws of each state where a Mortgaged Property is located or
is otherwise exempt under applicable law from such qualification or is
otherwise not required under applicable law to effect such
qualification.
(2) Seller has the full corporate power and authority to sell each Loan,
and to execute, deliver and perform, and to enter into and consummate
the transactions contemplated by the Agreement and has duly authorized
by all necessary corporate action on the part of Seller the execution,
delivery and performance of the Agreement; and the Agreement, assuming
the due authorization, execution and delivery thereof by the other
parties thereto, constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except
that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(3) The execution and delivery of the Agreement by Seller, the sale of the
Loans by Seller under the Agreement, the consummation of any other of
the transactions contemplated by the Agreement, and the fulfillment of
or compliance with the terms thereof are in the ordinary course of
business of Seller and will not (a) result in a material breach of any
term or provision of the charter or by-laws of Seller or (b) materially
conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other
material agreement or instrument to which Seller is a party or by which
it may be bound or (c) constitute a material violation of any statute,
order or regulation applicable to Seller of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
Seller; and Seller is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of
any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair Seller's ability to
perform or meet any of its obligations under the Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Agreement or the
S-IIA-1
ability of Seller to sell the Loans or to perform any of its other
obligations under the Agreement in accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Agreement
or the consummation of the transactions contemplated thereby, or if any
such consent, approval, authorization or order is required, Seller has
obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the Depositor
as a sale under applicable law.
(7) Seller is not insolvent nor is Seller aware of any pending insolvency,
and Seller will not become insolvent as a result of its sale of the
Loans under the Agreement, and Seller's sale of the Loans to the
Depositor under the Agreement will not be made with any intent to
hinder, delay or defraud any of its creditors.
S-IIA-2
SCHEDULE IIB
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
Representations and Warranties of []
______________________ ("SELLER") hereby makes the
representations and warranties set forth in this Schedule IIB to the Depositor
and the Trustee as of the Closing Date or, if so specified herein, as of the
Cut-off Date with respect to the Loans being conveyed by Seller. Capitalized
terms used but not otherwise defined in this Schedule IIB shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement (the "POOLING
AND SERVICING AGREEMENT") relating to the above-referenced Series, among Seller,
the other Sellers and the Servicer identified therein, Popular ABS, Inc., as
depositor, and ______________________, as trustee. The term "AGREEMENT" shall be
used in this Schedule to refer to the Pooling and Servicing Agreement.
(1) Seller is duly organized as a ___________________ and is validly
existing and in good standing under the laws of the State of
______________ and is duly authorized and qualified to transact any and
all business contemplated by the Agreement to be conducted by Seller
under the laws of each state where a Mortgaged Property is located or
is otherwise exempt under applicable law from such qualification or is
otherwise not required under applicable law to effect such
qualification.
(2) Seller has the full corporate power and authority to sell each Loan,
and to execute, deliver and perform, and to enter into and consummate
the transactions contemplated by the Agreement and has duly authorized
by all necessary corporate action on the part of Seller the execution,
delivery and performance of the Agreement; and the Agreement, assuming
the due authorization, execution and delivery thereof by the other
parties thereto, constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except
that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(3) The execution and delivery of the Agreement by Seller, the sale of the
Loans by Seller under the Agreement, the consummation of any other of
the transactions contemplated by the Agreement, and the fulfillment of
or compliance with the terms thereof are in the ordinary course of
business of Seller and will not (a) result in a material breach of any
term or provision of the charter or by-laws of Seller or (b) materially
conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other
material agreement or instrument to which Seller is a party or by which
it may be bound or (c) constitute a material violation of any statute,
order or regulation applicable to Seller of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
Seller; and Seller is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of
any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair Seller's ability to
perform or meet any of its obligations under the Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Agreement or the
S-IIB-1
ability of Seller to sell the Loans or to perform any of its other
obligations under the Agreement in accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Agreement
or the consummation of the transactions contemplated thereby, or if any
such consent, approval, authorization or order is required, Seller has
obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the Depositor as
a sale under applicable law; however, for financial reporting purposes
Seller intends to treat this transaction as the incurrence of debt by
Seller.
(7) Seller is not insolvent nor is Seller aware of any pending insolvency,
and Seller will not become insolvent as a result of its sale of the
Loans under the Agreement, and Seller's sale of the Loans to the
Depositor under the Agreement will not be made with any intent to
hinder, delay or defraud any of its creditors.
S-IIB-2
SCHEDULE IIC
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
RESERVED
S-IIC-1
SCHEDULE IID
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
Representations and Warranties of []
_______________________ ("SELLER") hereby makes the
representations and warranties set forth in this Schedule IID to the Depositor
and the Trustee as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans being conveyed by Seller. Capitalized
terms used but not otherwise defined in this Schedule IID shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement (the "POOLING
AND SERVICING AGREEMENT") relating to the above-referenced Series, among Seller,
the other Sellers and the Servicer identified therein, Popular ABS, Inc., as
depositor, and _____________________, as trustee. The term "AGREEMENT" shall be
used in this Schedule to refer to the Pooling and Servicing Agreement.
(1) Seller is duly organized as a ____________________ and is validly
existing and in good standing under the laws of the State of
______________ and is duly authorized and qualified to transact any and
all business contemplated by the Agreement to be conducted by Seller
under the laws of each state where a Mortgaged Property is located or
is otherwise exempt under applicable law from such qualification or is
otherwise not required under applicable law to effect such
qualification.
(2) Seller has the full corporate power and authority to sell each Loan,
and to execute, deliver and perform, and to enter into and consummate
the transactions contemplated by the Agreement and has duly authorized
by all necessary corporate action on the part of Seller the execution,
delivery and performance of the Agreement; and the Agreement, assuming
the due authorization, execution and delivery thereof by the other
parties thereto, constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except
that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(3) The execution and delivery of the Agreement by Seller, the sale of the
Loans by Seller under the Agreement, the consummation of any other of
the transactions contemplated by the Agreement, and the fulfillment of
or compliance with the terms thereof are in the ordinary course of
business of Seller and will not (a) result in a material breach of any
term or provision of the charter or by-laws of Seller or (b) materially
conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other
material agreement or instrument to which Seller is a party or by which
it may be bound or (c) constitute a material violation of any statute,
order or regulation applicable to Seller of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
Seller; and Seller is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of
any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair Seller's ability to
perform or meet any of its obligations under the Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Agreement or the
S-IID-1
ability of Seller to sell the Loans or to perform any of its other
obligations under the Agreement in accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Agreement
or the consummation of the transactions contemplated thereby, or if any
such consent, approval, authorization or order is required, Seller has
obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the Depositor as
a sale under applicable law.
(7) Seller is not insolvent nor is Seller aware of any pending insolvency,
and Seller will not become insolvent as a result of its sale of the
Loans under the Agreement, and Seller's sale of the Loans to the
Depositor under the Agreement will not be made with any intent to
hinder, delay or defraud any of its creditors.
S-IID-2
SCHEDULE IIE
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
Representations and Warranties of []
____________________ ("SELLER") hereby makes the
representations and warranties set forth in this Schedule IIE to the Depositor
and the Trustee as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans being conveyed by Seller. Capitalized
terms used but not otherwise defined in this Schedule IIE shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement (the "POOLING
AND SERVICING AGREEMENT") relating to the above-referenced Series, among Seller,
the other Sellers and the Servicer identified therein, Popular ABS, Inc., as
depositor, and _____________________, as trustee. The term "AGREEMENT" shall be
used in this Schedule to refer to the Pooling and Servicing Agreement.
(1) Seller is duly formed as a _______________________ and is validly
existing and in good standing under the laws of the State of
____________ and is duly authorized and qualified to transact any and
all business contemplated by the Agreement to be conducted by Seller
under the laws of each state where a Mortgaged Property is located or
is otherwise exempt under applicable law from such qualification or is
otherwise not required under applicable law to effect such
qualification.
(2) Seller has the full power and authority to sell each Loan, and to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by the Agreement and has duly authorized by
all necessary corporate action on the part of Seller the execution,
delivery and performance of the Agreement; and the Agreement, assuming
the due authorization, execution and delivery thereof by the other
parties thereto, constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except
that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(3) The execution and delivery of the Agreement by Seller, the sale of the
Loans by Seller under the Agreement, the consummation of any other of
the transactions contemplated by the Agreement, and the fulfillment of
or compliance with the terms thereof are in the ordinary course of
business of Seller and will not (a) result in a material breach of any
term or provision of the operating agreement of Seller or (b)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which Seller is a party
or by which it may be bound or (c) constitute a material violation of
any statute, order or regulation applicable to Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Seller; and Seller is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Seller's
ability to perform or meet any of its obligations under the Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Agreement or the
S-IIE-1
ability of Seller to sell the Loans or to perform any of its other
obligations under the Agreement in accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Agreement
or the consummation of the transactions contemplated thereby, or if any
such consent, approval, authorization or order is required, Seller has
obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the Depositor as
a sale under applicable law.
(7) Seller is not insolvent nor is Seller aware of any pending insolvency,
and Seller will not become insolvent as a result of its sale of the
Loans under the Agreement, and Seller's sale of the Loans to the
Depositor under the Agreement will not be made with any intent to
hinder, delay or defraud any of its creditors.
S-IIE-2
SCHEDULE IIF
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
Representations and Warranties of []
_________________ ("SELLER") hereby makes the representations
and warranties set forth in this Schedule IIF to the Depositor and the Trustee
as of the Closing Date, or if so specified herein, as of the Cut-off Date with
respect to the Loans being conveyed by Seller. Capitalized terms used but not
otherwise defined in this Schedule IIF shall have the meanings ascribed thereto
in the Pooling and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT")
relating to the above-referenced Series, among Seller, the other Sellers and the
Servicer identified therein, Popular ABS, Inc., as depositor, and
________________________, as trustee. The term "AGREEMENT" shall be used in this
Schedule to refer to the Pooling and Servicing Agreement.
(1) Seller is duly formed as a __________________________ and is validly
existing and in good standing under the laws of the State of
_______________ and is duly authorized and qualified to transact any
and all business contemplated by the Agreement to be conducted by
Seller under the laws of each state where a Mortgaged Property is
located or is otherwise exempt under applicable law from such
qualification or is otherwise not required under applicable law to
effect such qualification.
(2) Seller has the full power and authority to sell each Loan, and to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by the Agreement and has duly authorized by
all necessary corporate action on the part of Seller the execution,
delivery and performance of the Agreement; and the Agreement, assuming
the due authorization, execution and delivery thereof by the other
parties thereto, constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except
that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(3) The execution and delivery of the Agreement by Seller, the sale of the
Loans by Seller under the Agreement, the consummation of any other of
the transactions contemplated by the Agreement, and the fulfillment of
or compliance with the terms thereof are in the ordinary course of
business of Seller and will not (a) result in a material breach of any
term or provision of the operating agreement of Seller or (b)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which Seller is a party
or by which it may be bound or (c) constitute a material violation of
any statute, order or regulation applicable to Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Seller; and Seller is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Seller's
ability to perform or meet any of its obligations under the Agreement.
(4) No litigation is pending or, to the best of Seller's knowledge,
threatened, against Seller that would materially and adversely affect
the execution, delivery or enforceability of the Agreement or the
S-IIF-1
ability of Seller to sell the Loans or to perform any of its other
obligations under the Agreement in accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of, or compliance by Seller with, the Agreement
or the consummation of the transactions contemplated thereby, or if any
such consent, approval, authorization or order is required, Seller has
obtained the same.
(6) Seller intends to treat the conveyance of the Loans to the Depositor as
a sale under applicable law.
(7) Seller is not insolvent nor is Seller aware of any pending insolvency,
and Seller will not become insolvent as a result of its sale of the
Loans under the Agreement, and Seller's sale of the Loans to the
Depositor under the Agreement will not be made with any intent to
hinder, delay or defraud any of its creditors.
S-IIF-2
SCHEDULE IIX
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
Representations and Warranties of the Servicer
Equity One-Delaware, in its capacity as Servicer ("SERVICER"),
hereby makes the representations and warranties set forth in this Schedule IIX
to the Depositor and the Trustee as of the Closing Date, or if so specified
herein, as of the Cut-off Date with respect to the Loans being conveyed by the
Seller(s). Capitalized terms used but not otherwise defined in this Schedule IIX
shall have the meanings ascribed thereto in the Pooling and Servicing Agreement
(the "POOLING AND SERVICING AGREEMENT") relating to the above-referenced Series,
among Servicer, the Sellers identified therein, Popular ABS, Inc., as depositor,
and _________________________, as trustee. The term "AGREEMENT" shall be used in
this Schedule to refer to the Pooling and Servicing Agreement.
(1) Servicer is duly organized as a Delaware corporation and is validly
existing and in good standing under the laws of the State of Delaware
and is duly authorized and qualified to transact any and all business
contemplated by the Agreement to be conducted by Servicer in any state
in which a Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any event, is
in compliance with the doing business laws of any such state, to the
extent necessary to ensure its ability to service the Loans in
accordance with the terms of the Agreement and to perform any of its
other obligations under the Agreement in accordance with the terms
thereof.
(2) Servicer has the full corporate power and authority to service each
Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by the Agreement and has duly
authorized by all necessary corporate action on the part of Servicer
the execution, delivery and performance of the Agreement; and the
Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of Servicer, enforceable against Servicer in
accordance with its terms, except that (a) the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of the Agreement by Servicer, the servicing
of the Loans by Servicer under the Agreement, the consummation of any
other of the transactions contemplated by the Agreement, and the
fulfillment of or compliance with the terms thereof are in the ordinary
course of business of Servicer and will not (a) result in a material
breach of any term or provision of the charter or by-laws of Servicer
or (b) materially conflict with, result in a material breach, violation
or acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which Servicer is a party
or by which it may be bound or (c) constitute a material violation of
any statute, order or regulation applicable to Servicer of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Servicer; and Servicer is not in breach or violation
of any material indenture or other material agreement or instrument, or
in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair
Servicer's ability to perform or meet any of its obligations under the
Agreement.
S-IIX-1
(4) No litigation is pending or, to the best of Servicer's knowledge,
threatened, against Servicer that would materially and adversely affect
the execution, delivery or enforceability of the Agreement or the
ability of Servicer to service the Loans or to perform any of its other
obligations under the Agreement in accordance with the terms thereof.
(5) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Servicer of, or compliance by Servicer with, the
Agreement or the consummation of the transactions contemplated thereby,
or if any such consent, approval, authorization or order is required,
Servicer has obtained the same.
S-IIX-2
SCHEDULE IIIA
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
Loan Representations and Warranties of []
_____________________ ("SELLER") hereby makes the
representations and warranties set forth in this Schedule IIIA to the Depositor
and the Trustee as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans being conveyed by Seller and the
Mortgages, Mortgage Notes and Mortgaged Properties related thereto. Capitalized
terms used but not otherwise defined in this Schedule IIIA shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement (the "POOLING
AND SERVICING AGREEMENT") relating to the above-referenced Series, among Seller,
the other Sellers and the Servicer identified therein, Popular ABS, Inc., as
depositor, and ________________________, as trustee. The term "AGREEMENT" shall
be used in this Schedule to refer to the Pooling and Servicing Agreement.
(1) The information set forth on Schedule I to the Agreement with respect
to the Loans is true and correct in all material respects as of the
Closing Date.
(2) As of the close of business on ______________, 20___, no Loan was 30 or
more days contractually past due (assuming 30 day months).
(3) None of the Loans are Second Lien Loans.
(4) No Loan had a Combined Loan-to-Value Ratio at origination in excess of
100%. For purposes of determining the date of origination on which each
Loan's Combined Loan-to-Value Ratio is measured, no Loan has been
significantly modified within the meaning of Treasury Regulation
1.860G-2(b) as of the Closing Date.
(5) Each Mortgage is a valid and enforceable first lien on the referenced
Mortgaged Property subject only to (a) the lien of non delinquent
current real property taxes and assessments, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection
with the origination of the related Loan, and (c) other matters to
which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
such Mortgage.
(6) Immediately prior to the assignment of the Loans to the Depositor, the
Seller had good title to, and was the sole owner of, each such Loan
free and clear of any pledge, lien, encumbrance or security interest
and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and
assign the same pursuant to the Agreement.
(7) To the best of Seller's knowledge, there is no delinquent tax or
assessment lien against any Mortgaged Property.
(8) There is no valid right of rescission, offset, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
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(9) To the best of Seller's knowledge, there are no mechanics' liens or
claims for work, labor or material affecting any Mortgaged Property
which are or may be a lien prior to, or equal with, the lien of such
Mortgage, except those which are insured against by the title insurance
policy referred to in item (13) below.
(10) To the best of the Seller's knowledge, each Mortgaged Property is free
of material damage and in good repair.
(11) Each Loan at origination complied in all material respects with
applicable local, state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and all applicable
predatory and abusive lending laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(12) As of the Closing Date, neither the Seller nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that
a Loan may have been modified by a written instrument which has been
recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and the original or a copy of which
has been or shall be delivered to the Trustee); satisfied, canceled or
subordinated such Mortgage in whole or in part; released the related
Mortgaged Property in whole or in part from the lien of such Mortgage;
or executed any instrument of release, cancellation, modification or
satisfaction with respect thereto.
(13) For each Loan, a lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Principal
Balance of each such Loan or a commitment (binder) to issue the same
was effective on the date of the origination of each Loan, each such
policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in item (4) above; to
the best of the Seller's knowledge, no claims have been made under such
mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such mortgage title insurance
policy.
(14) To the best of the Seller's knowledge, all of the improvements which
were included for the purpose of determining the appraised value of
each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(15) To the best of the Seller's knowledge, no improvement located on or
being part of any Mortgaged Property is in violation of any applicable
zoning law or regulation. To the best of the Seller's knowledge, all
inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of such Mortgaged Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities, unless the lack thereof would not have a material adverse
effect on the value of such Mortgaged Property, and such Mortgaged
Property is lawfully occupied under applicable law.
(16) Each Mortgage Note and the related Mortgage are genuine, and each is
the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such Mortgage had legal capacity to execute such Mortgage Note and
such
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Mortgage and each such Mortgage Note and Mortgage have been duly and
properly executed by such parties.
(17) The proceeds of each Loan (other than certain amounts escrowed for home
improvements) have been fully disbursed and there is no requirement for
future advances thereunder. All costs, fees and expenses incurred in
making, or closing or recording such Loans were paid.
(18) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the related Mortgaged Property of the benefits of
the security, including, (a) in the case of a Mortgage designated as a
deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(19) With respect to each Mortgage constituting a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(20) Each Mortgage Note and each Mortgage is in substantially one of the
forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(21) The origination, underwriting and collection practices used by the
Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(22) There is no pledged account or other security other than any Escrow
Account and real estate securing the Mortgagor's obligations.
(23) No Loan has a shared appreciation feature, or other contingent interest
feature.
(24) Each Loan contains a customary "due on sale" clause.
(25) To the best of Seller's knowledge: at the Cut-off Date, the
improvements on each Mortgaged Property were covered by a valid and
existing hazard insurance policy with a generally acceptable carrier
that provides for fire and extended coverage and coverage for such
other hazards as are customary in the area where such Mortgaged
Property is located in an amount at least equal to the lesser of (a)
the maximum insurable value of the improvements on such Mortgaged
Property or (b) (i) in the case of a Loan secured by a Mortgage
creating a first lien on such Mortgaged Property, the original
principal balance of such Loan, or (ii) in the case of a Loan which is
subject to a prior loan or prior loans, the combined principal balances
of such Loan and the prior loan(s). If such Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium unit. For all Mortgages creating a
first lien on the related Mortgaged Property, all such individual
insurance policies and all flood policies referred to in item (25)
below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
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(26) If a Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special
flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended.
(27) To the best of Seller's knowledge, there is no proceeding occurring,
pending or threatened for the total or partial condemnation of any
Mortgaged Property.
(28) There is no material monetary default existing under any Mortgage or
the related Mortgage Note and, to the best of the Seller's knowledge,
there is no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration under such Mortgage or
related Mortgage Note; and the Seller has not waived any default,
breach, violation or event of acceleration.
(29) Each Mortgaged Property is improved by a one- to four-family
residential dwelling including condominium units, which, to the best of
Seller's knowledge, does not include cooperatives or mobile homes and
does not constitute other than real property under state law.
(30) Each Loan is being serviced by the Servicer.
(31) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related loan schedule. The consolidated principal amount does not
exceed the original principal amount of such Loan. No Mortgage Note
permits or obligates the Servicer to make future advances to the
Mortgagor at the option of the Mortgagor.
(32) To the best of Seller's knowledge, all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have
been paid, except for items which have been assessed, but are not yet
due and payable. Except for (a) payments in the nature of escrow
payments, and (b) interest accruing from the date of any Mortgage Note
or date of disbursement of the related Mortgage proceeds, whichever is
later, to the day which precedes by one month the Due Date of the first
installment of principal and interest, including without limitation,
taxes and insurance payments, the Servicer has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment
of any amount required by the related Mortgage.
(33) Each Loan was underwritten in all material respects in accordance with
the Seller's underwriting guidelines as set forth in the Prospectus
Supplement.
(34) An appraisal of each Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the originator, who had no interest,
direct or indirect, in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the
approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(35) No Loan is a graduated payment mortgage loan or a growing equity
mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
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(36) The Loans were selected from among the outstanding residential mortgage
loans in Seller's portfolio at the Closing Date as to which the
representations and warranties made as to such Loans set forth in this
Schedule IIIA can be made. Such selection was not made in a manner that
would adversely affect the interests of Certificateholders.
(37) Each Loan has a Due Date in the month of the first Distribution Date.
(38) Approximately []% Loans (by principal balance) are Balloon Loans.
(39) No Loan is subject to negative amortization or deferred interest
payments.
(40) No Mortgagor has requested relief under the Relief Act.
(41) None of the Loans are retail installment contracts for goods or
services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans"
as such terms are defined in 16 C.F.R. ss.433.1.
(42) No Mortgagor has or will have a claim or defense against Seller or any
assignor or assignee of Seller under any express or implied warranty
with respect to goods or services provided in connection with any Loan.
(43) Each Loan is a "qualified mortgage" for purposes of Section 860G(a)(3)
of the Code and Treasury Regulations Section 1.860G-2(a)(1) and (3).
(44) The Loans, individually and in the aggregate, conform in all material
respects to the descriptions thereof in the Prospectus Supplement.
(45) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or
payments of other charges or payments due the Seller have been
capitalized under any Mortgage or related Mortgage Note.
(46) All Loans calculate interest utilizing the actuarial method.
(47) None of the Loans are subject to the Home Ownership & Equity Protection
Act of 1994.
(48) As of the Cut-off Date, the Mortgage Rate relating to each Loan that is
an adjustable rate mortgage loan has been adjusted in accordance with
the terms of the related Mortgage Note.
(49) Each Loan at the time it was made complied in all material respects
with applicable local, state, and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws.
(50) No Loan is classified and/or defined as (a) a "high cost home,"
"covered" (excluding home loans defined as "covered home loans"
pursuant to the New Jersey Home Ownership Security Act of 2002 that
were originated between November 26, 2003 and July 7, 2004), "high risk
home," or "predatory" loan under any applicable federal, state or local
law (or is similarly classified and/or defined using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points and/or fees), or (b) a "High Cost Loan" or
"Covered Loan," as applicable (as such terms are defined in the then
current Standard & Poor's LEVELS(R) Glossary which is now Version 5.6c
Revised, Appendix E).
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(51) No Loan originated on or after October 1, 2002, and before March 7,
2003, is secured by property located in the State of Georgia, and no
Loan originated on or after March 7, 2003, is a "high cost home loan"
as defined under the Georgia Fair Lending Act.
(52) No Loan secured by property located in the State of Kentucky is a
"high-cost home loan" as defined in Kentucky House Xxxx 207.
(53) No Loan secured by property located in the State of New York (a) had an
original principal balance of $300,000 or less and (b) had an
application date on or after April 1, 2003, the terms of which loan
equal or exceed either the APR or the points and fees threshold for
"high-cost home loans," as defined in Section 6-L of the New York State
Banking Law.
(54) No Loan secured by property located in the State of New Mexico is a
"high-cost home loan" as defined in the New Mexico Home Loan Protection
Act.
(55) No Loan secured by property located in the State of New Jersey is a
"high-cost home loan" as defined in the New Jersey Home Ownership
Security Act of 2002.
(56) No Loan secured by property located in the State of Illinois is in
violation of the provisions of the Illinois Interest Act.
(57) No Loan secured by property located in the Commonwealth of
Massachusetts is a "high cost home mortgage loan" as defined in the
Massachusetts Predatory Home Loan Practices Act.
(58) No Loan secured by property located in the State of Indiana is a
"high-cost home loan" as defined in the Indiana High Cost Home Loan
Act.
S-IIIA-6
SCHEDULE IIIB
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
Loan Representations and Warranties of []
____________________ ("SELLER") hereby makes the
representations and warranties set forth in this Schedule IIIB to the Depositor
and the Trustee as of the Closing Date or, if so specified herein, as of the
Cut-off Date with respect to the Loans being conveyed by Seller and the
Mortgages, Mortgage Notes and Mortgaged Properties related thereto. Capitalized
terms used but not otherwise defined in this Schedule IIIB shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement (the "POOLING
AND SERVICING AGREEMENT") relating to the above-referenced Series, among Seller,
the other Sellers and the Servicer identified therein, Popular ABS, Inc., as
depositor, and __________________, as trustee. The term "AGREEMENT" shall be
used in this Schedule to refer to the Pooling and Servicing Agreement.
(1) The information set forth on Schedule I to the Agreement with respect
to the Loans is true and correct in all material respects as of the
Closing Date.
(2) As of the close of business on _____________, 20__, no Loan was 30 or
more days contractually past due (assuming 30 day months).
(3) None of the Loans are Second Lien Loans.
(4) No Loan had a Combined Loan-to-Value Ratio at origination in excess of
100%. For purposes of determining the date of origination on which each
Loan's Combined Loan-to-Value Ratio is measured, no Loan has been
significantly modified within the meaning of Treasury Regulation
1.860G-2(b) as of the Closing Date.
(5) Each Mortgage is a valid and enforceable first lien on the referenced
Mortgaged Property subject only to (a) the lien of non delinquent
current real property taxes and assessments, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection
with the origination of the related Loan, and (c) other matters to
which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
such Mortgage.
(6) Immediately prior to the assignment of the Loans to the Depositor, the
Seller had good title to, and was the sole owner of, each such Loan
free and clear of any pledge, lien, encumbrance or security interest
and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and
assign the same pursuant to the Agreement.
(7) To the best of Seller's knowledge, there is no delinquent tax or
assessment lien against any Mortgaged Property.
(8) There is no valid right of rescission, offset, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
S-IIIB-1
(9) To the best of Seller's knowledge, there are no mechanics' liens or
claims for work, labor or material affecting any Mortgaged Property
which are or may be a lien prior to, or equal with, the lien of such
Mortgage, except those which are insured against by the title insurance
policy referred to in item (13) below.
(10) To the best of the Seller's knowledge, each Mortgaged Property is free
of material damage and in good repair.
(11) Each Loan at origination complied in all material respects with
applicable local, state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and all applicable
predatory and abusive lending laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(12) As of the Closing Date, neither the Seller nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that
a Loan may have been modified by a written instrument which has been
recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and the original or a copy of which
has been or shall be delivered to the Trustee); satisfied, canceled or
subordinated such Mortgage in whole or in part; released the related
Mortgaged Property in whole or in part from the lien of such Mortgage;
or executed any instrument of release, cancellation, modification or
satisfaction with respect thereto.
(13) For each Loan, a lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Loan,
each such policy is valid and remains in full force and effect, and
each such policy was issued by a title insurer qualified to do business
in the jurisdiction where the related Mortgaged Property is located,
which policy insures the Seller and successor owners of indebtedness
secured by the related insured Mortgage, as to the applicable priority
lien of the Mortgage subject to the exceptions set forth in item (4)
above; to the best of the Seller's knowledge, no claims have been made
under such mortgage title insurance policy and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission,
anything which would impair the coverage of such mortgage title
insurance policy.
(14) To the best of the Seller's knowledge, all of the improvements which
were included for the purpose of determining the appraised value of
each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(15) To the best of the Seller's knowledge, no improvement located on or
being part of any Mortgaged Property is in violation of any applicable
zoning law or regulation. To the best of the Seller's knowledge, all
inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of such Mortgaged Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities, unless the lack thereof would not have a material adverse
effect on the value of such Mortgaged Property, and such Mortgaged
Property is lawfully occupied under applicable law.
(16) Each Mortgage Note and the related Mortgage are genuine, and each is
the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such
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Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(17) The proceeds of each Loan (other than certain amounts escrowed for home
improvements) have been fully disbursed and there is no requirement for
future advances thereunder. All costs, fees and expenses incurred in
making, or closing or recording such Loans were paid.
(18) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the related Mortgaged Property of the benefits of
the security, including, (a) in the case of a Mortgage designated as a
deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(19) With respect to each Mortgage constituting a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(20) Each Mortgage Note and each Mortgage is in substantially one of the
forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(21) The origination, underwriting and collection practices used by the
Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(22) There is no pledged account or other security other than any Escrow
Account and real estate securing the Mortgagor's obligations.
(23) No Loan has a shared appreciation feature, or other contingent interest
feature.
(24) Each Loan contains a customary "due on sale" clause.
(25) To the best of Seller's knowledge: at the Cut-off Date, the
improvements on each Mortgaged Property were covered by a valid and
existing hazard insurance policy with a generally acceptable carrier
that provides for fire and extended coverage and coverage for such
other hazards as are customary in the area where such Mortgaged
Property is located in an amount at least equal to the lesser of (a)
the maximum insurable value of the improvements on such Mortgaged
Property or (b) (i) in the case of a Loan secured by a Mortgage
creating a first lien on such Mortgaged Property, the original
principal balance of such Loan, or (ii) in the case of a Loan which is
subject to a prior loan or prior loans, the combined principal balances
of such Loan and the prior loan(s). If such Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium unit. For all Mortgages creating a
first lien on the related Mortgaged Property, all such individual
insurance policies and all flood policies referred to in item (25)
below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
S-IIIB-3
(26) If a Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special
flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended.
(27) To the best of Seller's knowledge, there is no proceeding occurring,
pending or threatened for the total or partial condemnation of any
Mortgaged Property.
(28) There is no material monetary default existing under any Mortgage or
the related Mortgage Note and, to the best of the Seller's knowledge,
there is no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration under such Mortgage or
related Mortgage Note; and the Seller has not waived any default,
breach, violation or event of acceleration.
(29) Each Mortgaged Property is improved by a one- to four-family
residential dwelling including condominium units, which, to the best of
Seller's knowledge, does not include cooperatives or mobile homes and
does not constitute other than real property under state law.
(30) Each Loan is being serviced by the Servicer.
(31) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related loan schedule. The consolidated principal amount does not
exceed the original principal amount of such Loan. No Mortgage Note
permits or obligates the Servicer to make future advances to the
Mortgagor at the option of the Mortgagor.
(32) To the best of Seller's knowledge, all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have
been paid, except for items which have been assessed, but are not yet
due and payable. Except for (a) payments in the nature of escrow
payments, and (b) interest accruing from the date of any Mortgage Note
or date of disbursement of the related Mortgage proceeds, whichever is
later, to the day which precedes by one month the Due Date of the first
installment of principal and interest, including without limitation,
taxes and insurance payments, the Servicer has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment
of any amount required by the related Mortgage.
(33) Each Loan was underwritten in all material respects in accordance with
the Seller's underwriting guidelines as set forth in the Prospectus
Supplement.
(34) An appraisal of each Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the originator, who had no interest,
direct or indirect, in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the
approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(35) No Loan is a graduated payment mortgage loan or a growing equity
mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
S-IIIB-4
(36) The Loans were selected from among the outstanding residential mortgage
loans in Seller's portfolio at the Closing Date as to which the
representations and warranties made as to such Loans set forth in this
Schedule IIIB can be made. Such selection was not made in a manner that
would adversely affect the interests of Certificateholders.
(37) Each Loan has a Due Date in the month of the first Distribution Date.
(38) None of the Loans are Balloon Loans.
(39) No Loan is subject to negative amortization or deferred interest
payments.
(40) No Mortgagor has requested relief under the Relief Act.
(41) None of the Loans are retail installment contracts for goods or
services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans"
as such terms are defined in 16 C.F.R. ss.433.1.
(42) No Mortgagor has or will have a claim or defense against Seller or any
assignor or assignee of Seller under any express or implied warranty
with respect to goods or services provided in connection with any Loan.
(43) Each Loan is a "qualified mortgage" for purposes of Section 860G(a)(3)
of the Code and Treasury Regulations Section 1.860G-2(a)(1) and (3).
(44) The Loans, individually and in the aggregate, conform in all material
respects to the descriptions thereof in the Prospectus Supplement.
(45) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or
payments of other charges or payments due the Seller have been
capitalized under any Mortgage or related Mortgage Note.
(46) All Loans calculate interest utilizing the actuarial method.
(47) None of the Loans are subject to the Home Ownership & Equity Protection
Act of 1994.
(48) As of the Cut-off Date, the Mortgage Rate relating to each Loan that is
an adjustable rate mortgage loan has been adjusted in accordance with
the terms of the related Mortgage Note.
(49) Each Loan at the time it was made complied in all material respects
with applicable local, state, and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws.
(50) No Loan is classified and/or defined as (a) a "high cost home,"
"covered" (excluding home loans defined as "covered home loans"
pursuant to the New Jersey Home Ownership Security Act of 2002 that
were originated between November 26, 2003 and July 7, 2004), "high risk
home," or "predatory" loan under any applicable federal, state or local
law (or is similarly classified and/or defined using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points and/or fees), or (b) a "High Cost Loan" or
"Covered Loan," as applicable (as such terms are defined in the then
current Standard & Poor's LEVELS(R) Glossary which is now Version 5.6c
Revised, Appendix E).
S-IIIB-5
(51) No Loan originated on or after October 1, 2002, and before March 7,
2003, is secured by property located in the State of Georgia, and no
Loan originated on or after March 7, 2003, is a "high cost home loan"
as defined under the Georgia Fair Lending Act.
(52) No Loan secured by property located in the State of Kentucky is a
"high-cost home loan" as defined in Kentucky House Xxxx 207.
(53) No Loan secured by property located in the State of New York (a) had an
original principal balance of $300,000 or less and (b) had an
application date on or after April 1, 2003, the terms of which loan
equal or exceed either the APR or the points and fees threshold for
"high-cost home loans," as defined in Section 6-L of the New York State
Banking Law.
(54) No Loan secured by property located in the State of New Mexico is a
"high-cost home loan" as defined in the New Mexico Home Loan Protection
Act.
(55) No Loan secured by property located in the State of New Jersey is a
"high-cost home loan" as defined in the New Jersey Home Ownership
Security Act of 2002.
(56) No Loan secured by property located in the State of Illinois is in
violation of the provisions of the Illinois Interest Act.
(57) No Loan secured by property located in the Commonwealth of
Massachusetts is a "high cost home mortgage loan" as defined in the
Massachusetts Predatory Home Loan Practices Act.
(58) No Loan secured by property located in the State of Indiana is a
"high-cost home loan" as defined in the Indiana High Cost Home Loan
Act.
S-IIIB-6
SCHEDULE IIIC
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
RESERVED
S-IIIC-1
SCHEDULE IIID
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
Loan Representations and Warranties of []
___________________ ("SELLER") hereby makes the
representations and warranties set forth in this Schedule IIID to the Depositor
and the Trustee as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans being conveyed by Seller and the
Mortgages, Mortgage Notes and Mortgaged Properties related thereto. Capitalized
terms used but not otherwise defined in this Schedule IIID shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement (the "POOLING
AND SERVICING AGREEMENT") relating to the above-referenced Series, among Seller,
the other Sellers and the Servicer identified therein, Popular ABS, Inc., as
depositor, and _______________________, as trustee. The term "AGREEMENT" shall
be used in this Schedule to refer to the Pooling and Servicing Agreement.
(1) The information set forth on Schedule I to the Agreement with respect
to the Loans is true and correct in all material respects as of the
Closing Date.
(2) As of the close of business on ______________, 20___, no Loan was 30 or
more days contractually past due (assuming 30 day months).
(3) None of the Loans are Second Lien Loans.
(4) No Loan had a Combined Loan-to-Value Ratio at origination in excess of
100%. For purposes of determining the date of origination on which each
Loan's Combined Loan-to-Value Ratio is measured, no Loan has been
significantly modified within the meaning of Treasury Regulation
1.860G-2(b) as of the Closing Date.
(5) Each Mortgage is a valid and enforceable first lien on the referenced
Mortgaged Property subject only to (a) the lien of non delinquent
current real property taxes and assessments, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection
with the origination of the related Loan, and (c) other matters to
which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
such Mortgage.
(6) Immediately prior to the assignment of the Loans to the Depositor, the
Seller had good title to, and was the sole owner of, each such Loan
free and clear of any pledge, lien, encumbrance or security interest
and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and
assign the same pursuant to the Agreement.
(7) To the best of Seller's knowledge, there is no delinquent tax or
assessment lien against any Mortgaged Property.
(8) There is no valid right of rescission, offset, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
S-IIID-1
(9) To the best of Seller's knowledge, there are no mechanics' liens or
claims for work, labor or material affecting any Mortgaged Property
which are or may be a lien prior to, or equal with, the lien of such
Mortgage, except those which are insured against by the title insurance
policy referred to in item (13) below.
(10) To the best of the Seller's knowledge, each Mortgaged Property is free
of material damage and in good repair.
(11) Each Loan at origination complied in all material respects with
applicable local, state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and all applicable
predatory and abusive lending laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(12) As of the Closing Date, neither the Seller nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that
a Loan may have been modified by a written instrument which has been
recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and the original or a copy of which
has been or shall be delivered to the Trustee); satisfied, canceled or
subordinated such Mortgage in whole or in part; released the related
Mortgaged Property in whole or in part from the lien of such Mortgage;
or executed any instrument of release, cancellation, modification or
satisfaction with respect thereto.
(13) For each Loan, a lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Principal
Balance of each such Loan or a commitment (binder) to issue the same
was effective on the date of the origination of each Loan, each such
policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in item (4) above; to
the best of the Seller's knowledge, no claims have been made under such
mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such mortgage title insurance
policy.
(14) To the best of the Seller's knowledge, all of the improvements which
were included for the purpose of determining the appraised value of
each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(15) To the best of the Seller's knowledge, no improvement located on or
being part of any Mortgaged Property is in violation of any applicable
zoning law or regulation. To the best of the Seller's knowledge, all
inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of such Mortgaged Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities, unless the lack thereof would not have a material adverse
effect on the value of such Mortgaged Property, and such Mortgaged
Property is lawfully occupied under applicable law.
(16) Each Mortgage Note and the related Mortgage are genuine, and each is
the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such
S-IIID-2
Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(17) The proceeds of each Loan (other than certain amounts escrowed for home
improvements) have been fully disbursed and there is no requirement for
future advances thereunder. All costs, fees and expenses incurred in
making, or closing or recording such Loans were paid.
(18) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the related Mortgaged Property of the benefits of
the security, including, (a) in the case of a Mortgage designated as a
deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(19) With respect to each Mortgage constituting a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(20) Each Mortgage Note and each Mortgage is in substantially one of the
forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(21) The origination, underwriting and collection practices used by the
Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(22) There is no pledged account or other security other than any Escrow
Account and real estate securing the Mortgagor's obligations.
(23) No Loan has a shared appreciation feature, or other contingent interest
feature.
(24) Each Loan contains a customary "due on sale" clause.
(25) To the best of Seller's knowledge: at the Cut-off Date, the
improvements on each Mortgaged Property were covered by a valid and
existing hazard insurance policy with a generally acceptable carrier
that provides for fire and extended coverage and coverage for such
other hazards as are customary in the area where such Mortgaged
Property is located in an amount at least equal to the lesser of (a)
the maximum insurable value of the improvements on such Mortgaged
Property or (b) (i) in the case of a Loan secured by a Mortgage
creating a first lien on such Mortgaged Property, the original
principal balance of such Loan, or (ii) in the case of a Loan which is
subject to a prior loan or prior loans, the combined principal balances
of such Loan and the prior loan(s). If such Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium unit. For all Mortgages creating a
first lien on the related Mortgaged Property, all such individual
insurance policies and all flood policies referred to in item (25)
below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
S-IIID-3
(26) If a Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special
flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended.
(27) To the best of Seller's knowledge, there is no proceeding occurring,
pending or threatened for the total or partial condemnation of any
Mortgaged Property.
(28) There is no material monetary default existing under any Mortgage or
the related Mortgage Note and, to the best of the Seller's knowledge,
there is no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration under such Mortgage or
related Mortgage Note; and the Seller has not waived any default,
breach, violation or event of acceleration.
(29) Each Mortgaged Property is improved by a one- to four-family
residential dwelling including condominium units, which, to the best of
Seller's knowledge, does not include cooperatives or mobile homes and
does not constitute other than real property under state law.
(30) Each Loan is being serviced by the Servicer.
(31) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related loan schedule. The consolidated principal amount does not
exceed the original principal amount of such Loan. No Mortgage Note
permits or obligates the Servicer to make future advances to the
Mortgagor at the option of the Mortgagor.
(32) To the best of Seller's knowledge, all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have
been paid, except for items which have been assessed, but are not yet
due and payable. Except for (a) payments in the nature of escrow
payments, and (b) interest accruing from the date of any Mortgage Note
or date of disbursement of the related Mortgage proceeds, whichever is
later, to the day which precedes by one month the Due Date of the first
installment of principal and interest, including without limitation,
taxes and insurance payments, the Servicer has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment
of any amount required by the related Mortgage.
(33) Each Loan was underwritten in all material respects in accordance with
the Seller's underwriting guidelines as set forth in the Prospectus
Supplement.
(34) An appraisal of each Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the originator, who had no interest,
direct or indirect, in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the
approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(35) No Loan is a graduated payment mortgage loan or a growing equity
mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
S-IIID-4
(36) The Loans were selected from among the outstanding residential mortgage
loans in Seller's portfolio at the Closing Date as to which the
representations and warranties made as to such Loans set forth in this
Schedule IIID can be made. Such selection was not made in a manner that
would adversely affect the interests of Certificateholders.
(37) Each Loan has a Due Date in the month of the first Distribution Date.
(38) Approximately []% Loans (by principal balance) are Balloon Loans.
(39) No Loan is subject to negative amortization or deferred interest
payments.
(40) No Mortgagor has requested relief under the Relief Act.
(41) None of the Loans are retail installment contracts for goods or
services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans"
as such terms are defined in 16 C.F.R. ss.433.1.
(42) No Mortgagor has or will have a claim or defense against Seller or any
assignor or assignee of Seller under any express or implied warranty
with respect to goods or services provided in connection with any Loan.
(43) Each Loan is a "qualified mortgage" for purposes of Section 860G(a)(3)
of the Code and Treasury Regulations Section 1.860G-2(a)(1) and (3).
(44) The Loans, individually and in the aggregate, conform in all material
respects to the descriptions thereof in the Prospectus Supplement.
(45) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or
payments of other charges or payments due the Seller have been
capitalized under any Mortgage or related Mortgage Note.
(46) All Loans calculate interest utilizing the actuarial method.
(47) None of the Loans are subject to the Home Ownership & Equity Protection
Act of 1994.
(48) As of the Cut-off Date, the Mortgage Rate relating to each Loan that is
an adjustable rate mortgage loan has been adjusted in accordance with
the terms of the related Mortgage Note.
(49) Each Loan at the time it was made complied in all material respects
with applicable local, state, and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws.
(50) No Loan is classified and/or defined as (a) a "high cost home,"
"covered" (excluding home loans defined as "covered home loans"
pursuant to the New Jersey Home Ownership Security Act of 2002 that
were originated between November 26, 2003 and July 7, 2004), "high risk
home," or "predatory" loan under any applicable federal, state or local
law (or is similarly classified and/or defined using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points and/or fees), or (b) a "High Cost Loan" or
"Covered Loan," as applicable (as such terms are defined in the then
current Standard & Poor's LEVELS(R) Glossary which is now Version 5.6c
Revised, Appendix E).
S-IIID-5
(51) No Loan originated on or after October 1, 2002, and before March 7,
2003, is secured by property located in the State of Georgia, and no
Loan originated on or after March 7, 2003, is a "high cost home loan"
as defined under the Georgia Fair Lending Act.
(52) No Loan secured by property located in the State of Kentucky is a
"high-cost home loan" as defined in Kentucky House Xxxx 207.
(53) No Loan secured by property located in the State of New York (a) had an
original principal balance of $300,000 or less and (b) had an
application date on or after April 1, 2003, the terms of which loan
equal or exceed either the APR or the points and fees threshold for
"high-cost home loans," as defined in Section 6-L of the New York State
Banking Law.
(54) No Loan secured by property located in the State of New Mexico is a
"high-cost home loan" as defined in the New Mexico Home Loan Protection
Act.
(55) No Loan secured by property located in the State of New Jersey is a
"high-cost home loan" as defined in the New Jersey Home Ownership
Security Act of 2002.
(56) No Loan secured by property located in the State of Illinois is in
violation of the provisions of the Illinois Interest Act.
(57) No Loan secured by property located in the Commonwealth of
Massachusetts is a "high cost home mortgage loan" as defined in the
Massachusetts Predatory Home Loan Practices Act.
(58) No Loan secured by property located in the State of Indiana is a
"high-cost home loan" as defined in the Indiana High Cost Home Loan
Act.
S-IIID-6
SCHEDULE IIIE
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
Loan Representations and Warranties of []
___________________ ("SELLER") hereby makes the
representations and warranties set forth in this Schedule IIIE to the Depositor
and the Trustee as of the Closing Date, or if so specified herein, as of the
Cut-off Date with respect to the Loans being conveyed by Seller and the
Mortgages, Mortgage Notes and Mortgaged Properties related thereto. Capitalized
terms used but not otherwise defined in this Schedule IIIE shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement (the "POOLING
AND SERVICING AGREEMENT") relating to the above-referenced Series, among Seller,
the other Sellers and the Servicer identified therein, Popular ABS, Inc., as
depositor, and ____________________, as trustee. The term "AGREEMENT" shall be
used in this Schedule to refer to the Pooling and Servicing Agreement.
(1) The information set forth on Schedule I to the Agreement with respect
to the Loans is true and correct in all material respects as of the
Closing Date.
(2) As of the close of business on ______________, 20___, no Loan was 30 or
more days contractually past due (assuming 30 day months).
(3) None of the Loans are Second Lien Loans.
(4) No Loan had a Combined Loan-to-Value Ratio at origination in excess of
100%. For purposes of determining the date of origination on which each
Loan's Combined Loan-to-Value Ratio is measured, no Loan has been
significantly modified within the meaning of Treasury Regulation
1.860G-2(b) as of the Closing Date.
(5) Each Mortgage is a valid and enforceable first lien on the referenced
Mortgaged Property subject only to (a) the lien of non delinquent
current real property taxes and assessments, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection
with the origination of the related Loan, and (c) other matters to
which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
such Mortgage.
(6) Immediately prior to the assignment of the Loans to the Depositor, the
Seller had good title to, and was the sole owner of, each such Loan
free and clear of any pledge, lien, encumbrance or security interest
and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and
assign the same pursuant to the Agreement.
(7) To the best of Seller's knowledge, there is no delinquent tax or
assessment lien against any Mortgaged Property.
(8) There is no valid right of rescission, offset, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
S-IIIE-1
(9) To the best of Seller's knowledge, there are no mechanics' liens or
claims for work, labor or material affecting any Mortgaged Property
which are or may be a lien prior to, or equal with, the lien of such
Mortgage, except those which are insured against by the title insurance
policy referred to in item (13) below.
(10) To the best of the Seller's knowledge, each Mortgaged Property is free
of material damage and in good repair.
(11) Each Loan at origination complied in all material respects with
applicable local, state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and all applicable
predatory and abusive lending laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(12) As of the Closing Date, neither the Seller nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that
a Loan may have been modified by a written instrument which has been
recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and the original or a copy of which
has been or shall be delivered to the Trustee); satisfied, canceled or
subordinated such Mortgage in whole or in part; released the related
Mortgaged Property in whole or in part from the lien of such Mortgage;
or executed any instrument of release, cancellation, modification or
satisfaction with respect thereto.
(13) For each Loan, a lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Principal
Balance of each such Loan or a commitment (binder) to issue the same
was effective on the date of the origination of each Loan, each such
policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in item (4) above; to
the best of the Seller's knowledge, no claims have been made under such
mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such mortgage title insurance
policy.
(14) To the best of the Seller's knowledge, all of the improvements which
were included for the purpose of determining the appraised value of
each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(15) To the best of the Seller's knowledge, no improvement located on or
being part of any Mortgaged Property is in violation of any applicable
zoning law or regulation. To the best of the Seller's knowledge, all
inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of such Mortgaged Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities, unless the lack thereof would not have a material adverse
effect on the value of such Mortgaged Property, and such Mortgaged
Property is lawfully occupied under applicable law.
(16) Each Mortgage Note and the related Mortgage are genuine, and each is
the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such
S-IIIE-2
Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(17) The proceeds of each Loan (other than certain amounts escrowed for home
improvements) have been fully disbursed and there is no requirement for
future advances thereunder. All costs, fees and expenses incurred in
making, or closing or recording such Loans were paid.
(18) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the related Mortgaged Property of the benefits of
the security, including, (a) in the case of a Mortgage designated as a
deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(19) With respect to each Mortgage constituting a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(20) Each Mortgage Note and each Mortgage is in substantially one of the
forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(21) The origination, underwriting and collection practices used by the
Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(22) There is no pledged account or other security other than any Escrow
Account and real estate securing the Mortgagor's obligations.
(23) No Loan has a shared appreciation feature, or other contingent interest
feature.
(24) Each Loan contains a customary "due on sale" clause.
(25) To the best of Seller's knowledge: at the Cut-off Date, the
improvements on each Mortgaged Property were covered by a valid and
existing hazard insurance policy with a generally acceptable carrier
that provides for fire and extended coverage and coverage for such
other hazards as are customary in the area where such Mortgaged
Property is located in an amount at least equal to the lesser of (a)
the maximum insurable value of the improvements on such Mortgaged
Property or (b) (i) in the case of a Loan secured by a Mortgage
creating a first lien on such Mortgaged Property, the original
principal balance of such Loan, or (ii) in the case of a Loan which is
subject to a prior loan or prior loans, the combined principal balances
of such Loan and the prior loan(s). If such Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium unit. For all Mortgages creating a
first lien on the related Mortgaged Property, all such individual
insurance policies and all flood policies referred to in item (25)
below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
S-IIIE-3
(26) If a Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special
flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended.
(27) To the best of Seller's knowledge, there is no proceeding occurring,
pending or threatened for the total or partial condemnation of any
Mortgaged Property.
(28) There is no material monetary default existing under any Mortgage or
the related Mortgage Note and, to the best of the Seller's knowledge,
there is no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration under such Mortgage or
related Mortgage Note; and the Seller has not waived any default,
breach, violation or event of acceleration.
(29) Each Mortgaged Property is improved by a one- to four-family
residential dwelling including condominium units, which, to the best of
Seller's knowledge, does not include cooperatives or mobile homes and
does not constitute other than real property under state law.
(30) Each Loan is being serviced by the Servicer.
(31) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related loan schedule. The consolidated principal amount does not
exceed the original principal amount of such Loan. No Mortgage Note
permits or obligates the Servicer to make future advances to the
Mortgagor at the option of the Mortgagor.
(32) To the best of Seller's knowledge, all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have
been paid, except for items which have been assessed, but are not yet
due and payable. Except for (a) payments in the nature of escrow
payments, and (b) interest accruing from the date of any Mortgage Note
or date of disbursement of the related Mortgage proceeds, whichever is
later, to the day which precedes by one month the Due Date of the first
installment of principal and interest, including without limitation,
taxes and insurance payments, the Servicer has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment
of any amount required by the related Mortgage.
(33) Each Loan was underwritten in all material respects in accordance with
the Seller's underwriting guidelines as set forth in the Prospectus
Supplement.
(34) An appraisal of each Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the originator, who had no interest,
direct or indirect, in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the
approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(35) No Loan is a graduated payment mortgage loan or a growing equity
mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
S-IIIE-4
(36) The Loans were selected from among the outstanding residential mortgage
loans in Seller's portfolio at the Closing Date as to which the
representations and warranties made as to such Loans set forth in this
Schedule IIIE can be made. Such selection was not made in a manner that
would adversely affect the interests of Certificateholders.
(37) Each Loan has a Due Date in the month of the first Distribution Date.
(38) Approximately []% of the Loans (by principal balance) are Balloon
Loans.
(39) No Loan is subject to negative amortization or deferred interest
payments.
(40) No Mortgagor has requested relief under the Relief Act.
(41) None of the Loans are retail installment contracts for goods or
services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans"
as such terms are defined in 16 C.F.R. ss.433.1.
(42) No Mortgagor has or will have a claim or defense against Seller or any
assignor or assignee of Seller under any express or implied warranty
with respect to goods or services provided in connection with any Loan.
(43) Each Loan is a "qualified mortgage" for purposes of Section 860G(a)(3)
of the Code and Treasury Regulations Section 1.860G-2(a)(1) and (3).
(44) The Loans, individually and in the aggregate, conform in all material
respects to the descriptions thereof in the Prospectus Supplement.
(45) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or
payments of other charges or payments due the Seller have been
capitalized under any Mortgage or related Mortgage Note.
(46) All Loans calculate interest utilizing the actuarial method.
(47) None of the Loans are subject to the Home Ownership & Equity Protection
Act of 1994.
(48) As of the Cut-off Date, the Mortgage Rate relating to each Loan that is
an adjustable rate mortgage loan has been adjusted in accordance with
the terms of the related Mortgage Note.
(49) Each Loan at the time it was made complied in all material respects
with applicable local, state, and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws.
(50) No Loan is classified and/or defined as (a) a "high cost home,"
"covered" (excluding home loans defined as "covered home loans"
pursuant to the New Jersey Home Ownership Security Act of 2002 that
were originated between November 26, 2003 and July 7, 2004), "high risk
home," or "predatory" loan under any applicable federal, state or local
law (or is similarly classified and/or defined using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points and/or fees), or (b) a "High Cost Loan" or
"Covered Loan," as applicable (as such terms are defined in the then
current Standard & Poor's LEVELS(R) Glossary which is now Version 5.6c
Revised, Appendix E).
S-IIIE-5
(51) No Loan originated on or after October 1, 2002, and before March 7,
2003, is secured by property located in the State of Georgia, and no
Loan originated on or after March 7, 2003, is a "high cost home loan"
as defined under the Georgia Fair Lending Act.
(52) No Loan secured by property located in the State of Kentucky is a
"high-cost home loan" as defined in Kentucky House Xxxx 207.
(53) No Loan secured by property located in the State of New York (a) had an
original principal balance of $300,000 or less and (b) had an
application date on or after April 1, 2003, the terms of which loan
equal or exceed either the APR or the points and fees threshold for
"high-cost home loans," as defined in Section 6-L of the New York State
Banking Law.
(54) No Loan secured by property located in the State of New Mexico is a
"high-cost home loan" as defined in the New Mexico Home Loan Protection
Act.
(55) No Loan secured by property located in the State of New Jersey is a
"high-cost home loan" as defined in the New Jersey Home Ownership
Security Act of 2002.
(56) No Loan secured by property located in the State of Illinois is in
violation of the provisions of the Illinois Interest Act.
(57) No Loan secured by property located in the Commonwealth of
Massachusetts is a "high cost home mortgage loan" as defined in the
Massachusetts Predatory Home Loan Practices Act.
(58) No Loan secured by property located in the State of Indiana is a
"high-cost home loan" as defined in the Indiana High Cost Home Loan
Act.
S-IIIE-6
SCHEDULE IIIF
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
Loan Representations and Warranties of []
________________ ("SELLER") hereby makes the representations
and warranties set forth in this Schedule IIIF to the Depositor and the Trustee
as of the Closing Date, or if so specified herein, as of the Cut-off Date with
respect to the Loans being conveyed by Seller and the Mortgages, Mortgage Notes
and Mortgaged Properties related thereto. Capitalized terms used but not
otherwise defined in this Schedule IIIF shall have the meanings ascribed thereto
in the Pooling and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT")
relating to the above-referenced Series, among Seller, the other Sellers and the
Servicer identified therein, Popular ABS, Inc., as depositor, and
______________________, as trustee. The term "AGREEMENT" shall be used in this
Schedule to refer to the Pooling and Servicing Agreement.
(1) The information set forth on Schedule I to the Agreement with respect
to the Loans is true and correct in all material respects as of the
Closing Date.
(2) As of the close of business on ______________, 20___, no Loan was 30 or
more days contractually past due (assuming 30 day months).
(3) None of the Loans are Second Lien Loans.
(4) No Loan had a Combined Loan-to-Value Ratio at origination in excess of
100%. For purposes of determining the date of origination on which each
Loan's Combined Loan-to-Value Ratio is measured, no Loan has been
significantly modified within the meaning of Treasury Regulation
1.860G-2(b) as of the Closing Date.
(5) Each Mortgage is a valid and enforceable first lien on the referenced
Mortgaged Property subject only to (a) the lien of non delinquent
current real property taxes and assessments, (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection
with the origination of the related Loan, and (c) other matters to
which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
such Mortgage.
(6) Immediately prior to the assignment of the Loans to the Depositor, the
Seller had good title to, and was the sole owner of, each such Loan
free and clear of any pledge, lien, encumbrance or security interest
and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and
assign the same pursuant to the Agreement.
(7) To the best of Seller's knowledge, there is no delinquent tax or
assessment lien against any Mortgaged Property.
(8) There is no valid right of rescission, offset, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
S-IIIF-1
(9) To the best of Seller's knowledge, there are no mechanics' liens or
claims for work, labor or material affecting any Mortgaged Property
which are or may be a lien prior to, or equal with, the lien of such
Mortgage, except those which are insured against by the title insurance
policy referred to in item (13) below.
(10) To the best of the Seller's knowledge, each Mortgaged Property is free
of material damage and in good repair.
(11) Each Loan at origination complied in all material respects with
applicable local, state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and all applicable
predatory and abusive lending laws, and consummation of the
transactions contemplated hereby will not involve the violation of any
such laws.
(12) As of the Closing Date, neither the Seller nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that
a Loan may have been modified by a written instrument which has been
recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and the original or a copy of which
has been or shall be delivered to the Trustee); satisfied, canceled or
subordinated such Mortgage in whole or in part; released the related
Mortgaged Property in whole or in part from the lien of such Mortgage;
or executed any instrument of release, cancellation, modification or
satisfaction with respect thereto.
(13) For each Loan, a lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Principal
Balance of each such Loan or a commitment (binder) to issue the same
was effective on the date of the origination of each Loan, each such
policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the related Mortgaged Property is located, which
policy insures the Seller and successor owners of indebtedness secured
by the related insured Mortgage, as to the applicable priority lien of
the Mortgage subject to the exceptions set forth in item (4) above; to
the best of the Seller's knowledge, no claims have been made under such
mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such mortgage title insurance
policy.
(14) To the best of the Seller's knowledge, all of the improvements which
were included for the purpose of determining the appraised value of
each Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon such Mortgaged Property.
(15) To the best of the Seller's knowledge, no improvement located on or
being part of any Mortgaged Property is in violation of any applicable
zoning law or regulation. To the best of the Seller's knowledge, all
inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of such Mortgaged Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities, unless the lack thereof would not have a material adverse
effect on the value of such Mortgaged Property, and such Mortgaged
Property is lawfully occupied under applicable law.
(16) Each Mortgage Note and the related Mortgage are genuine, and each is
the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law. To
the best of the Seller's knowledge, all parties to such Mortgage Note
and such
S-IIIF-2
Mortgage had legal capacity to execute such Mortgage Note and
such Mortgage and each such Mortgage Note and Mortgage have been duly
and properly executed by such parties.
(17) The proceeds of each Loan (other than certain amounts escrowed for home
improvements) have been fully disbursed and there is no requirement for
future advances thereunder. All costs, fees and expenses incurred in
making, or closing or recording such Loans were paid.
(18) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the related Mortgaged Property of the benefits of
the security, including, (a) in the case of a Mortgage designated as a
deed of trust, by trustee's sale and (b) otherwise by judicial
foreclosure.
(19) With respect to each Mortgage constituting a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(20) Each Mortgage Note and each Mortgage is in substantially one of the
forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(21) The origination, underwriting and collection practices used by the
Seller with respect to each Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(22) There is no pledged account or other security other than any Escrow
Account and real estate securing the Mortgagor's obligations.
(23) No Loan has a shared appreciation feature, or other contingent interest
feature.
(24) Each Loan contains a customary "due on sale" clause.
(25) To the best of Seller's knowledge: at the Cut-off Date, the
improvements on each Mortgaged Property were covered by a valid and
existing hazard insurance policy with a generally acceptable carrier
that provides for fire and extended coverage and coverage for such
other hazards as are customary in the area where such Mortgaged
Property is located in an amount at least equal to the lesser of (a)
the maximum insurable value of the improvements on such Mortgaged
Property or (b) (i) in the case of a Loan secured by a Mortgage
creating a first lien on such Mortgaged Property, the original
principal balance of such Loan, or (ii) in the case of a Loan which is
subject to a prior loan or prior loans, the combined principal balances
of such Loan and the prior loan(s). If such Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium unit. For all Mortgages creating a
first lien on the related Mortgaged Property, all such individual
insurance policies and all flood policies referred to in item (25)
below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
S-IIIF-3
(26) If a Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special
flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration was required at closing with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing
coverage not less than the least of (a) the original outstanding
principal balance of the related Loan, (b) the minimum amount required
to compensate for damage or loss on a maximum insurable value basis or
(c) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended.
(27) To the best of Seller's knowledge, there is no proceeding occurring,
pending or threatened for the total or partial condemnation of any
Mortgaged Property.
(28) There is no material monetary default existing under any Mortgage or
the related Mortgage Note and, to the best of the Seller's knowledge,
there is no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration under such Mortgage or
related Mortgage Note; and the Seller has not waived any default,
breach, violation or event of acceleration.
(29) Each Mortgaged Property is improved by one- to four-family residential
dwelling including condominium units, which, to the best of Seller's
knowledge, does not include cooperatives or mobile homes and does not
constitute other than real property under state law.
(30) Each Loan is being serviced by the Servicer.
(31) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the
related loan schedule. The consolidated principal amount does not
exceed the original principal amount of such Loan. No Mortgage Note
permits or obligates the Servicer to make future advances to the
Mortgagor at the option of the Mortgagor.
(32) To the best of Seller's knowledge, all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have
been paid, except for items which have been assessed, but are not yet
due and payable. Except for (a) payments in the nature of escrow
payments, and (b) interest accruing from the date of any Mortgage Note
or date of disbursement of the related Mortgage proceeds, whichever is
later, to the day which precedes by one month the Due Date of the first
installment of principal and interest, including without limitation,
taxes and insurance payments, the Servicer has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment
of any amount required by the related Mortgage.
(33) Each Loan was underwritten in all material respects in accordance with
the Seller's underwriting guidelines as set forth in the Prospectus
Supplement.
(34) An appraisal of each Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the originator, who had no interest,
direct or indirect, in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the
approval or disapproval of such Loan; such appraisal is in a form
acceptable to FNMA and FHLMC.
(35) No Loan is a graduated payment mortgage loan or a growing equity
mortgage loan, and no Loan is subject to a buydown or similar
arrangement.
S-IIIF-4
(36) The Loans were selected from among the outstanding residential mortgage
loans in Seller's portfolio at the Closing Date as to which the
representations and warranties made as to such Loans set forth in this
Schedule IIIF can be made. Such selection was not made in a manner that
would adversely affect the interests of Certificateholders.
(37) Each Loan has a Due Date in the month of the first Distribution Date.
(38) Approximately []% of the Loans (by principal balance) are Balloon
Loans.
(39) No Loan is subject to negative amortization or deferred interest
payments.
(40) No Mortgagor has requested relief under the Relief Act.
(41) None of the Loans are retail installment contracts for goods or
services or are home improvement loans for goods or services, which
would be either "consumer credit contracts" or "purchase money loans"
as such terms are defined in 16 C.F.R. ss.433.1.
(42) No Mortgagor has or will have a claim or defense against Seller or any
assignor or assignee of Seller under any express or implied warranty
with respect to goods or services provided in connection with any Loan.
(43) Each Loan is a "qualified mortgage" for purposes of Section 860G(a)(3)
of the Code and Treasury Regulations Section 1.860G-2(a)(1) and (3).
(44) The Loans, individually and in the aggregate, conform in all material
respects to the descriptions thereof in the Prospectus Supplement.
(45) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or
payments of other charges or payments due the Seller have been
capitalized under any Mortgage or related Mortgage Note.
(46) All Loans calculate interest utilizing the actuarial method.
(47) None of the Loans are subject to the Home Ownership & Equity Protection
Act of 1994.
(48) As of the Cut-off Date, the Mortgage Rate relating to each Loan that is
an adjustable rate mortgage loan has been adjusted in accordance with
the terms of the related Mortgage Note.
(49) Each Loan at the time it was made complied in all material respects
with applicable local, state, and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws.
(50) No Loan is classified and/or defined as (a) a "high cost home,"
"covered" (excluding home loans defined as "covered home loans"
pursuant to the New Jersey Home Ownership Security Act of 2002 that
were originated between November 26, 2003 and July 7, 2004), "high risk
home," or "predatory" loan under any applicable federal, state or local
law (or is similarly classified and/or defined using different
terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high
interest rates, points and/or fees), or (b) a "High Cost Loan" or
"Covered Loan," as applicable (as such terms are defined in the then
current Standard & Poor's LEVELS(R) Glossary which is now Version 5.6c
Revised, Appendix E).
S-IIIF-5
(51) No Loan originated on or after October 1, 2002, and before March 7,
2003, is secured by property located in the State of Georgia, and no
Loan originated on or after March 7, 2003, is a "high cost home loan"
as defined under the Georgia Fair Lending Act.
(52) No Loan secured by property located in the State of Kentucky is a
"high-cost home loan" as defined in Kentucky House Xxxx 207.
(53) No Loan secured by property located in the State of New York (a) had an
original principal balance of $300,000 or less and (b) had an
application date on or after April 1, 2003, the terms of which loan
equal or exceed either the APR or the points and fees threshold for
"high-cost home loans," as defined in Section 6-L of the New York State
Banking Law.
(54) No Loan secured by property located in the State of New Mexico is a
"high-cost home loan" as defined in the New Mexico Home Loan Protection
Act.
(55) No Loan secured by property located in the State of New Jersey is a
"high-cost home loan" as defined in the New Jersey Home Ownership
Security Act of 2002.
(56) No Loan secured by property located in the State of Illinois is in
violation of the provisions of the Illinois Interest Act.
(57) No Loan secured by property located in the Commonwealth of
Massachusetts is a "high cost home mortgage loan" as defined in the
Massachusetts Predatory Home Loan Practices Act.
(58) No Loan secured by property located in the State of Indiana is a
"high-cost home loan" as defined in the Indiana High Cost Home Loan
Act.
S-IIIF-6
SCHEDULE IV
LIST OF FINANCING STATEMENTS:
PERFECTION OF GRANT OF SECURITY INTEREST
BY SELLERS TO DEPOSITOR
========================================================= ==========================================================
SELLER LOCATION
========================================================= ==========================================================
[] []
--------------------------------------------------------- ----------------------------------------------------------
[] []
--------------------------------------------------------- ----------------------------------------------------------
--------------------------------------------------------- ----------------------------------------------------------
[] []
--------------------------------------------------------- ----------------------------------------------------------
--------------------------------------------------------- ----------------------------------------------------------
[] []
--------------------------------------------------------- ----------------------------------------------------------
--------------------------------------------------------- ----------------------------------------------------------
[] []
========================================================= ==========================================================
S-IV-1
SCHEDULE V
LIST OF FINANCING STATEMENTS:
PERFECTION OF GRANT OF SECURITY INTEREST
BY DEPOSITOR TO TRUSTEE
========================================================= ==========================================================
DEPOSITOR LOCATION
========================================================= ==========================================================
Popular ABS, Inc. Secretary of State of the State of Delaware
========================================================= ==========================================================
S-V-1
SCHEDULE VI
LIST OF FINANCING STATEMENTS:
PERFECTION OF SALE
BY SELLERS TO DEPOSITOR
========================================================= ==========================================================
SELLER LOCATION
========================================================= ==========================================================
[] []
--------------------------------------------------------- ----------------------------------------------------------
--------------------------------------------------------- ----------------------------------------------------------
[] []
--------------------------------------------------------- ----------------------------------------------------------
--------------------------------------------------------- ----------------------------------------------------------
[] []
--------------------------------------------------------- ----------------------------------------------------------
--------------------------------------------------------- ----------------------------------------------------------
[] []
--------------------------------------------------------- ----------------------------------------------------------
--------------------------------------------------------- ----------------------------------------------------------
[] []
========================================================= ==========================================================
S-VI-1
SCHEDULE VII
LIST OF FINANCING STATEMENTS:
PERFECTION OF SALE
BY DEPOSITOR TO TRUSTEE
========================================================= ==========================================================
DEPOSITOR LOCATION
========================================================= ==========================================================
Popular ABS, Inc. Secretary of State of the State of Delaware
========================================================= ==========================================================
S-VII-1
EXHIBIT A-1
Form of Class []-[] Certificate
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. :
Cut-off Date: : ___________, 20___
First Distribution Date: : ___________, 20___
Initial Certificate Balance
of this Certificate
("DENOMINATION") : $
Initial Class Certificate Balance
of all Certificates of
this Class: : $
Pass-Through Rate : LIBOR + %
CUSIP :
ISIN :
Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series []-[]
Class []-[]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable rate mortgage
loans (collectively, the "LOANS").
Popular ABS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein.This
A-1-1
Certificate does not evidence an obligation of, or an interest in, and is
not guaranteed by the Depositor, the Sellers, the Servicer or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Loans are guaranteed or insured by any governmental agency
or instrumentality.
This certifies that is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the denomination of this
Certificate by the aggregate Initial Certificate Balances of all Certificates of
the Class to which this Certificate belongs) in certain monthly distributions
with respect to a Trust Fund consisting primarily of the Loans deposited by
Popular ABS, Inc. (the "DEPOSITOR"). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "AGREEMENT") among the Depositor, _____________, ________________, and
_______________, as sellers (in such capacity, collectively, the "SELLERS"),
Equity One, Inc., a Delaware corporation, as servicer (in such capacity, the
"SERVICER"), and ____________________________, as trustee (the "TRUSTEE"). To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated____________________, 20__ _____________________________,
Countersigned: as Trustee
By:_________________________________ By:____________________________
Authorized Signatory of
________________________________,
as Trustee
X-0-0
XXXXXXX X-0
RESERVED
X-0-0
XXXXXXX X-0
Form of Class []-[] Certificate
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CLASS []-[] CERTIFICATE IS SUBORDINATE TO THE [SENIOR CERTIFICATES] [SENIOR
CERTIFICATES AND THE CLASS []-[] CERTIFICATES] [SENIOR CERTIFICATES, THE CLASS
[]-[] CERTIFICATES AND THE CLASS []-[] CERTIFICATES] [SENIOR CERTIFICATES, THE
CLASS []-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES AND THE CLASS []-[]
CERTIFICATES] [SENIOR CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE CLASS
[]-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES AND THE CLASS []-[]
CERTIFICATES] [SENIOR CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE CLASS
[]-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES
AND THE CLASS []-[] CERTIFICATES] OF THIS SERIES TO THE EXTENT DESCRIBED HEREIN
AND IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Certificate No. :
Cut-off Date: : ___________, 20___
First Distribution Date: : ___________, 20___
Initial Certificate Balance
of this Certificate
("DENOMINATION") : $
Initial Class Certificate Balance
of all Certificates of
this Class: : $
Pass-Through Rate : LIBOR + %
CUSIP :
ISIN :
A-3-1
Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series []-[]
Class []-[]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable rate mortgage
loans (collectively, the "LOANS").
Popular ABS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Sellers, the Servicer or the Trustee referred to below or any of
their respective affiliates. Neither this Certificate nor the Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the denomination of this
Certificate by the aggregate Initial Certificate Balances of all Certificates of
the Class to which this Certificate belongs) in certain monthly distributions
with respect to a Trust Fund consisting primarily of the Loans deposited by
Popular ABS, Inc. (the "DEPOSITOR"). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "AGREEMENT") among the Depositor, _________________, _______________ and
___________________, as sellers (in such capacity, collectively, the "SELLERS"),
Equity One, Inc., a Delaware corporation, as servicer (in such capacity, the
"SERVICER"), and ___________________, as trustee (the "TRUSTEE"). To the extent
not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated____________________, 20__ _____________________________,
Countersigned: as Trustee
By:_________________________________ By:____________________________
Authorized Signatory of
________________________________,
as Trustee
X-0-0
XXXXXXX X-0
Form of Class []-[] Certificate
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CLASS []-[] CERTIFICATE IS SUBORDINATE TO THE [SENIOR CERTIFICATES, THE
CLASS []-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE CLASS []-[]
CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES AND THE
CLASS []-[] CERTIFICATES] [SENIOR CERTIFICATES, THE CLASS []-[] CERTIFICATES,
THE CLASS []-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE CLASS []-[]
CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES AND THE
CLASS []-[] CERTIFICATES] [SENIOR CERTIFICATES, THE CLASS []-[] CERTIFICATES,
THE CLASS []-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE CLASS []-[]
CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES, CLASS
[]-[] CERTIFICATES AND THE CLASS []-[] CERTIFICATES] [SENIOR CERTIFICATES, THE
CLASS []-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE CLASS []-[]
CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE CLASS []-[] CERTIFICATES, THE
CLASS []-[] CERTIFICATES, CLASS []-[] CERTIFICATES, THE CLASS []-[] AND THE
CLASS []-[] CERTIFICATES] OF THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Certificate No. :
Cut-off Date: : ___________, 20___
First Distribution Date: : ___________, 20___
Initial Certificate Balance
of this Certificate
("DENOMINATION") : $
Initial Class Certificate Balance
of all Certificates of
this Class: : $
Pass-Through Rate : LIBOR + %
CUSIP :
ISIN :
A-4-1
Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series []-[]
Class []-[]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable rate mortgage
loans (collectively, the "LOANS").
Popular ABS, Inc., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Sellers, the Servicer or the Trustee referred to below or any of
their respective affiliates. Neither this Certificate nor the Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the denomination of this
Certificate by the aggregate Initial Certificate Balances of all Certificates of
the Class to which this Certificate belongs) in certain monthly distributions
with respect to a Trust Fund consisting primarily of the Loans deposited by
Popular ABS, Inc. (the "DEPOSITOR"). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "AGREEMENT") among the Depositor, ____________________, __________________
and _________________, as sellers (in such capacity, collectively, the
"SELLERS"), Equity One, Inc., a Delaware corporation, as servicer (in such
capacity, the "SERVICER"), and ___________________________, as trustee (the
"TRUSTEE"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated____________________, 20__ _____________________________,
Countersigned: as Trustee
By:_________________________________ By:____________________________
Authorized Signatory of
________________________________,
as Trustee
X-0-0
XXXXXXX X-0
Form of Class R Certificate
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN THREE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE REPRESENTS THE "TAX MATTERS PERSON RESIDUAL INTEREST" ISSUED
UNDER THE AGREEMENT REFERRED TO BELOW AND MAY NOT BE TRANSFERRED TO ANY PERSON
EXCEPT IN CONNECTION WITH THE ASSUMPTION BY THE TRANSFEREE OF THE DUTIES OF THE
SERVICER UNDER SUCH AGREEMENT.]
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION
4975 OF THE CODE, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF
THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
B-1-1
Certificate No. :
Cut-off Date : ___________, 20___
Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series []-[]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable rate mortgage
loans (collectively, the "LOANS").
Popular ABS, Inc., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Sellers, the Servicer or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Loans are guaranteed or insured by any governmental agency
or instrumentality.
This certifies that is the registered owner of the Percentage Interest
(set forth on the face hereof) in certain monthly distributions with respect to
a Trust Fund consisting of the Loans deposited by Popular ABS, Inc. (the
"DEPOSITOR"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "AGREEMENT") among
the Depositor, ___________________, _____________________ and
________________________, as sellers (in such capacity, collectively, the
"SELLERS"), Equity One, Inc., a Delaware corporation, as servicer (in such
capacity, the "SERVICER"), and __________________________, as trustee (the
"TRUSTEE"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class R
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in ________________, _______________.
Any proposed transfer of a Class R Certificate shall be subject to the
restrictions on transfer described in Section 5.02 of the Agreement.
No transfer of a Class R Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or Section 4975 of the Code, nor a person acting
on behalf of any such plan, which representation letter shall not be an expense
of the Trustee or the Servicer or (ii) in the case of any such Class R
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or Section 4975 of the Code (or comparable provisions of any
subsequent enactment), or a trustee of any such plan or any other person acting
on behalf of any such plan, an Opinion of Counsel satisfactory to the Trustee
and the Servicer to the effect that the purchase or holding of such Class R
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code and will not subject the Trustee or the Servicer to any obligation in
addition to those undertaken in the Agreement, which Opinion of Counsel shall
not be an expense of the Trustee or the Servicer. Notwithstanding anything else
to the contrary herein, any purported transfer of a Class R Certificate to or on
behalf of an employee benefit plan subject to ERISA
B-1-2
or to the Code without the opinion of counsel satisfactory to the Trustee as
described above shall be void and of no effect.
Each Holder of this Class R Certificate will be deemed to have agreed
to be bound by the restrictions of the Agreement, including but not limited to
the restrictions that (i) each person holding or acquiring any Ownership
Interest in this Class R Certificate must be a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be transferred without
delivery to the Trustee of (a) a transfer affidavit of the proposed transferee
and (b) a transfer certificate of the transferor, each of such documents to be
in the form described in the Agreement, (iii) each person holding or acquiring
any Ownership Interest in this Class R Certificate must agree to require a
transfer affidavit and to deliver a transfer certificate to the Trustee as
required pursuant to the Agreement, (iv) each person holding or acquiring an
Ownership Interest in this Class R Certificate must agree not to transfer an
Ownership Interest in this Class R Certificate if it has actual knowledge that
the proposed transferee is not a Permitted Transferee and (v) any attempted or
purported transfer of any Ownership Interest in this Class R Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated____________________, 20__ _____________________________,
as Trustee
By:____________________________
Countersigned:
By:_________________________________
Authorized Signatory of
________________________________,
as Trustee
X-0-0
XXXXXXX X-0
Form of Class X Certificate
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
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER (I) 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 (II) IF THIS CERTIFICATE HAS BEEN THE SUBJECT OF
AN ERISA QUALIFYING UNDERWRITING, A REPRESENTATION THAT THE TRANSFEREE IS
PURCHASING SUCH CERTIFICATE WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY
GENERAL ACCOUNT", AS DEFINED IN 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) AN OPINION OF COUNSEL
IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR
TO THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
B-2-1
Certificate No. : 1
Cut-off Date : ___________, 20___
Percentage Interest : __.__%
Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series []-[]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable rate mortgage
loans (collectively, the "LOANS").
Popular ABS, Inc., as Depositor
This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Sellers, the Servicer
or the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that Popular ABS, Inc. is the registered owner
of the Percentage Interest (set forth on the face hereof) in certain monthly
distributions with respect to a Trust Fund consisting of the Loans deposited by
Popular ABS, Inc. (the "DEPOSITOR"). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "AGREEMENT") among the Depositor, ________________, __________________ and
________________, as sellers (in such capacity, collectively, the "SELLERS"),
Equity One, Inc., a Delaware corporation, as servicer (in such capacity, the
"SERVICER"), and ___________________________________, as trustee (the
"TRUSTEE"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
No transfer of a Class X Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or Section 4975 of the Code, nor a person acting
on behalf of any such plan, which representation letter shall not be an expense
of the Trustee or the Servicer, (ii) if the Class X Certificate has been the
subject of an ERISA Qualifying Underwriting and the transferee is an insurance
company, a representation that the transferee is an insurance company which is
purchasing such Certificate with funds contained in an "insurance company
general account", as defined in Prohibited Transaction Class Exemption 95-60
("PTCE 95-60") and that the purchase and holding of the Certificate is covered
under Sections I and III of PTCE 95-60 or (iii) in the case of any such Class X
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or Section 4975 of the Code (or comparable provisions of any
subsequent enactment), or a trustee of any such plan or any other person acting
on behalf of any such plan, an Opinion of Counsel satisfactory to the Trustee
and the Servicer to the effect that the purchase or holding of such Class X
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code and will not subject the Trustee or the Servicer to any obligation in
addition to those undertaken in the Agreement, which Opinion of Counsel shall
not be an expense of the Trustee or the Servicer. Notwithstanding anything else
to the contrary herein, any purported transfer of a Class X Certificate to or
B-2-2
on behalf of an employee benefit plan subject to ERISA or to the Code without
the opinion of counsel satisfactory to the Trustee as described above shall be
void and of no effect.
Any distribution of the proceeds of any remaining assets of
the Trust Fund will be made only upon presentment and surrender of this Class X
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in _______________, _____________.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated____________________, 20__ _____________________________,
as Trustee
By:____________________________
Name:
Title:
Countersigned:
By:_________________________________
Authorized Signatory of
________________________________,
as Trustee
B-2-3
EXHIBIT C
Form of Reverse of Certificates
Popular ABS, Inc.
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Popular ABS, Inc. Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"CERTIFICATES"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee with the consent of the Holders
of Certificates affected by such amendment evidencing the requisite Percentage
Interest, as provided in the Agreement. Any such consent by the Holder 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 applicable Corporate Trust Office, accompanied by a written
instrument
C-1
of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the Holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Sellers and the Trustee and any agent
of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Trustee, nor any such agent shall be affected by any notice to
the contrary.
On any Distribution Date on which the Pool Principal Balance is less
than 10% of the Cut-off Date Pool Principal Balance, the Servicer will have the
option to repurchase, in whole, from the Trust Fund all remaining Loans and all
property acquired in respect of the Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any advance
with respect thereto) of the last Loan remaining in the Trust Fund or the
disposition of all property in respect thereof and the distribution to
Certificateholders of all amounts required to be distributed pursuant to the
Agreement. In no event, however, will the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living at the date of the Agreement of a certain person named
in the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-2
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
for the account of______________________________________________________________
account number___________________or, if mailed by check, to____________________.
Applicable statements should be mailed to_______________________________________
This information is provided by_________________________________________________
the assignee named above, or____________________________________________________
_______________________________________________________________________________,
as its agent.
C-3
EXHIBIT D
Form of Initial Certification Of Trustee
[date]
[Depositor]
[Servicer]
[Sellers]
---------------------
---------------------
Re: Pooling and Servicing Agreement among Popular ABS, Inc., as
Depositor, ________________, __________________ and
_______________, as Sellers, Equity One, Inc., a Delaware
corporation, as Servicer, and __________________, as Trustee,
Mortgage Pass-Through Certificates, Series []-[]
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that, as to each Loan listed in the Loan Schedule
(other than any Loan paid in full or listed on the attached Exception Report) it
has received the original Mortgage Note or an executed Affidavit of Lost Note in
the form attached hereto as Annex I, and confirms that, for all Mortgage Notes
received, the name on the Mortgage Note matches that on the Loan Schedule,
except as set forth on the Exception Report attached hereto.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Loans identified on the
Loan Schedule, or (ii) the collectibility, insurability, effectiveness or
suitability of any such Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
__________________________,
as Trustee
By:______________________________
Name:
Title:
ANNEX I
AFFIDAVIT OF LOST NOTE
COMMONWEALTH OF PENNSYLVANIA :
: SS
COUNTY OF PHILADELPHIA :
The undersigned, being duly sworn, deposes and says that:
1. _________________, a____________ corporation (the "Holder")
is the owner of a note dated ________________of _________________, in the
principal amount of $______________ (the "Note").
2. The Holder has not pledged or disposed of the Note in any
manner whatsoever to any person nor given any person authority to transfer or
pledge the same.
3. The Holder does not know of the whereabouts of the Note and
believes the Note has been lost or destroyed.
4. The Holder makes this affidavit to_________________________
("Trustee") in order to induce the Trustee to issue its initial certification
pursuant to Section 2.02 of the Pooling and Servicing Agreement dated as of
___________, 20___ among the Trustee, the Holder and the other parties set forth
therein, without an exception therefrom.
5. The Holder and its successors and assigns shall at all time
indemnify and save harmless the Trustee against all loss or damage it might
suffer by reason of the issuance and delivery of a replacement note for the
Note, including all cost, charges, expenses and claims of every kind and nature.
6. If the Note shall be found the Holder shall promptly
deliver the same to the Trustee in order that it may be cancelled.
7. The undersigned is duly authorized to execute this
Affidavit on behalf of the Holder.
Date:_______________________ [SELLER]
By:_______________________________
____________________________ Name:
Witness Title:
__________________________________
as Trustee
By:_______________________________
Name:
Title:
D-2
EXHIBIT E
Form of Final Certification Of Trustee
[date]
[Depositor]
[Servicer]
[Seller]
---------------------
---------------------
Re: Pooling and Servicing Agreement among Popular ABS, Inc., as
Depositor, ________________, __________________ and
_______________, as Sellers, Equity One, Inc., a Delaware
corporation, as Servicer, and __________________, as Trustee,
Mortgage Pass-Through Certificates, Series []-[]
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "POOLING AND SERVICING AGREEMENT"), the undersigned, as
Trustee, hereby certifies that as to each Loan listed in the Loan Schedule
(other than any Loan paid in full or listed on the attached Exception Report),
except as set forth on the Exception Report attached hereto, it has received:
(i) the original Mortgage Note and confirms that the name on
the Mortgage Note matches that on the Loan Schedule;
(ii) the original recorded Mortgage (unless such Mortgage has
not yet been returned by the relevant recording office, as certified by the
Depositor;
(iii) the original recorded assignment of the Mortgage in the
form provided in Section 2.01(c) of the Pooling and Servicing Agreement;
(iv) the original or duplicate original recorded assignment or
assignments of the Mortgage necessary to show a complete chain of assignment
from the originator to the Seller, unless the Depositor has certified that the
related assignment has not been returned from the applicable recording office;
and
(v) the original or duplicate original lender's title policy
and all riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy thereof
certified by the title company, unless the Depositor has certified that such
title policy has not yet been received from the applicable title insurance
company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Loan, and (b) the information set forth in items (c), (d), (e) and (i) of the
definition of the "Loan Schedule" in Article I of the Pooling and Servicing
Agreement accurately reflects information set forth in the Mortgage File.
E-1
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Loans identified on the
Loan Schedule, or (ii) the collectibility, insurability, effectiveness or
suitability of any such Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
___________________________________,
as Trustee
By:_________________________________________
Name:
Title:
E-2
EXHIBIT F
Form of Transfer Affidavit
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
STATE OF )
) ss:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of , the proposed Transferee of an
Ownership Interest in a Class R Certificate (the "CERTIFICATE") issued pursuant
to the Pooling and Servicing Agreement, (the "AGREEMENT"), relating to the
above-referenced Series, by and among Popular ABS, Inc., as depositor (the
"DEPOSITOR"), ___________________, _____________________ and
____________________, as Sellers, Equity One, Inc., a Delaware corporation, as
Servicer, and ____________________, as Trustee. Capitalized terms used, but not
defined herein or in Exhibit 1 hereto, shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
3. The Transferee acknowledges that it understands that as the holder
of the residual interest, the Transferee may incur tax liabilities in excess of
any cash flows the residual interest generates and the Transferee intends to pay
any taxes associated with its holding the residual interest as those taxes
become due.
4. The Transferee represents that the conditions specified in either
or both of subparagraph (a) and (b) of this paragraph are satisfied:
(a) The requirements of this subparagraph (a) will be met if:
the present value of the anticipated tax liabilities associated with holding the
residual interest does not exceed the sum of: (i) the present value of any
consideration given to the Transferee to acquire the interest, (ii) the present
value of the expected future distributions on the interest, and (iii) the
present value of the anticipated tax savings associated with holding the
interest as the REMIC generates losses. For purposes of this subparagraph (a),
the Transferee is assumed to pay tax at a rate equal to the highest rate of tax
specified in section 11(b)(1) of the Code, and present values are computed using
a discount rate equal to the applicable federal rate prescribed by section
1274(d) of the Code, compounded semiannually, or such other rate that the
Transferee can demonstrate it borrows substantial funds at in the course of its
trade or business from unrelated third parties.
(b) The requirements of this subparagraph (b) will be met if:
(i) at the time of the transfer, and at the close of each of the Transferee's
two fiscal years preceding the year of transfer the Transferee's gross assets
for financial reporting purposes exceed $100 million and its net assets for
financial reporting
F-1
purposes exceed $10 million, (ii) The Transferee is an eligible corporation
(within the meaning of section 860L(a)(2) of the Code), (iii) The Transferee is
not a foreign branch of an eligible corporation or any other arrangement by
which the Residual interest will at any time be subject to net tax by a foreign
country or possession of the United States, (iv) The Transferee agrees, in
executing this Certificate that any subsequent transfer of the Residual interest
will be to another eligible corporation in a "qualifying transaction," and (v)
the Transferee has not indicated to, nor provided to the Transferor any grounds
to believe that, the Transferee will not pay the taxes associated with the
residual interest. For purposes of applying this subparagraph (b), the
Transferee's gross assets and net assets do not include any obligation of any
person related to the Transferee within the meaning of section 860L(g) of the
Code, or any other asset if a principal purpose for holding or acquiring the
asset is to permit the Transferee to satisfy the requirements of this
subparagraph (b), and a "qualifying transaction" is a transaction that satisfies
the requirements of ss.4 of Rev. Proc. 2001-12, 2001-3 I.R.B. 35.
5. 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.
6. 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.)
7. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement (attached hereto as Exhibit 2 and incorporated herein by
reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
8. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit G to the Agreement (a "TRANSFEROR CERTIFICATE") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
F-2
9. 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.
10. The Transferee's taxpayer identification number is________________.
11. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
12. 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.
13. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan or arrangement that is subject to Section 4975 of the Code, and
the Transferee is not acting on behalf of such a plan or arrangement or using
the assets of any such plan or arrangement to effect the transfer.
14. The Transferee has provided financial statements or other financial
information requested by the transferor in connection with the transfer of the
Class R Certificates to permit the transferor to assess the financial capability
of the Transferee to pay any such taxes.
* * *
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__.
F-3
EXHIBIT 1
to EXHIBIT F
Certain Definitions
"OWNERSHIP INTEREST": As to any Class R Certificate, any ownership
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
"PERMITTED TRANSFEREE": Any person other than (a) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (b) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (c) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in section 860E(c)(l) of the Code) with respect to
any Class R Certificate, (d) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (e) a Person that is not (i) a citizen or
resident of the United States, (ii) a corporation or partnership (or other
entity properly treated as a corporation or partnership for U.S. federal income
tax purposes) created or organized in or under the laws of the United States or
any political subdivision thereof, (iii) an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or (iv) a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States Persons have authority
to control all substantial decisions of the trust, unless such Person listed in
clause (i), (ii), (iii) or (iv) above has furnished the transferor and the
Trustee with a duly completed Internal Revenue Service Form W-8ECI and (f) any
other Person so designated by the Depositor based upon an Opinion of Counsel
that the Transfer of an Ownership Interest in a Class R Certificate to such
Person may cause any REMIC hereunder to fail to qualify as one or more REMICs at
any time that the Certificates are outstanding. The terms "United States,"
"State" and "International Organization" shall have the meanings set forth in
section 7701 of the Code or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof for these purposes if all of its activities are subject to
tax and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such government unit.
"PERSON": Any individual, corporation, partnership, joint venture,
bank, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"TRANSFER": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"TRANSFEREE": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
F-4
EXHIBIT 2
to EXHIBIT F
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership Interest
in a Class R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.
(ii) No Ownership Interest in a Class R Certificate
may be registered on the Closing Date or thereafter transferred, and
the Trustee shall not register the Transfer of any Class R Certificate
unless, in addition to the certificates required to be delivered to the
Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "TRANSFER AFFIDAVIT") of the initial
owner or the proposed transferee in the form attached hereto as Exhibit
F.
(iii) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Class R Certificate, (B) to obtain
a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of a Class R
Certificate and (C) not to Transfer its Ownership Interest in a Class R
Certificate or to cause the Transfer of an Ownership Interest in a
Class R Certificate to any other Person if it has actual knowledge that
such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any
Ownership Interest in a Class R Certificate in violation of the
provisions of this Section 5.02(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 Class R 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 Class R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that is in fact
not permitted by this Section or for making any payments due on such
Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long
as the Transfer was registered after receipt of the related Transfer
Affidavit, Transferor Certificate and either the Rule 144A Letter or
the Investment Letter. The Trustee shall be entitled but not obligated
to recover from any Holder of a Class R Certificate that was in fact
not a Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class R Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
F-5
(v) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Sellers
or the Servicer, to the effect that the elimination of such restrictions will
not cause the Trust Fund hereunder to fail to qualify as one or more REMICs at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Class R Certificate hereby
consents to any amendment of this Agreement which, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (A) to ensure that the
record ownership of, or any beneficial interest in, a Class R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (B) to provide for a means to compel the Transfer of a Class R
Certificate which is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
F-6
EXHIBIT G
Form of Transferor Certificate
________________________
Date
Popular ABS, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: _______________
___________________________
___________________________
___________________________
Attention: ____________________________
________________
Re: Popular ABS, Inc. Mortgage Pass-Through Certificates,
Series []-[], Class ,
Ladies and Gentlemen:
In connection with our disposition of the above Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "ACT"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Class R Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.
Very truly yours,
___________________________
Print Name of Transferor
By:________________________
Authorized Officer
G-1
EXHIBIT H
Form of Investment Letter (Non Rule 144A)
___________________________
Date
Popular ABS, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:_______________________________
___________________________
___________________________
___________________________
Attention:___________________________
___________________________
Re: Popular ABS, Inc. Mortgage Pass-Through Certificates,
Series []-[], Class
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "ACT"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition, or (ii) we are an insurance company and
are purchasing Certificates, other than the Class R Certificates, that have been
the subject of an ERISA Qualifying Underwriting, we are purchasing the
Certificates with funds contained in an "insurance company general account", as
defined in Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and the
purchasing and holding of such Certificates are covered by Sections I and III of
PTCE 95-60, (e) we are acquiring the Certificates for investment for our own
account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of Section
5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to
H-1
an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this Certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement.
Very truly yours,
________________________________
Print Name of Transferee
By:_____________________________
Authorized Officer
H-2
EXHIBIT I
Form of Rule 144A Letter
___________________________
Date
Popular ABS, Inc.
000 Xxxxxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:_______________________________
___________________________
___________________________
___________________________
Attention:___________________________
___________________________
Re: Popular ABS, Inc. Mortgage Pass-Through Certificates,
Series []-[], Class ,
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "ACT"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition, or (ii) we are an insurance company and
are purchasing Certificates, other than the Class R Certificates, that have been
the subject of an ERISA Qualifying Underwriting, we are purchasing the
Certificates with funds contained in an "insurance company general account", as
defined in Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and the
purchasing and holding of such Certificates are covered by Sections I and III of
PTCE 95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Act or that would render the
disposition of the Certificates a violation of Section 5 of the Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
and (f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Act and have completed either of the forms of certification to
that effect attached hereto as Annex 1 or Annex 2. We
I-1
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Act.
Very truly yours,
________________________________
Print Name of Transferee
By:_____________________________
Authorized Officer
I-2
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "BUYER") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("RULE 144A") because (i) the Buyer owned and/or
invested on a discretionary basis either at least $100,000,000 in securities or,
if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis at
least $10,000,000 in securities (except for the excluded securities referred to
below) as of the end of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is 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.
I-3
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a) (22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_______________________________________
Print Name of Buyer
By:_____________________________________
Name:
Title:
Date:___________________________________
I-4
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "BUYER") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("RULE 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
___ The Buyer owned $____in securities (other than the
excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $___in securities (other
than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in
I-5
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
_______________________________________
Print Name of Buyer or Adviser
By:_____________________________________
Name:
Title:
IF AN ADVISER:
_______________________________________
Print Name of Buyer
Date:___________________________________
I-6
EXHIBIT J
Form of Request for Release of Documents
Popular ABS, Inc.
Mortgage Pass-Through Certificates
Series []-[]
To:_______________________________ Attn:________________________
_______________________________
Re: Pooling and Servicing Agreement among Popular ABS, Inc., as
Depositor, ________________, __________________ and
_______________, as Sellers, Equity One, Inc., a Delaware
corporation, as Servicer, and __________________, as
Trustee, Mortgage Pass-Through Certificates, Series []-[]
Ladies and Gentlemen:
In connection with the administration of the Loans held by you as
Trustee for Popular ABS, Inc., we request the release of the Mortgage File for
the Loan(s) described below, for the reason indicated.
FT Account #: Pool #:
Mortgagor's Name, Address and Zip Code:
Loan Number:
Reason for Requesting Documents (check one)
1. Loan paid in full (_______________________ hereby certifies
that all amounts have been received.)
2. Loan Liquidated (___________________________ hereby certifies
that all proceeds of foreclosure, insurance, or other
liquidation have been finally received.)
3. Loan in Foreclosure.
4. Other (explain):
The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Servicer shall be
deposited into the Certificate Account, and the Servicer shall keep the
Documents and any proceeds separate and distinct from all other property in the
Servicer's possession, custody or control.
J-1
If item 1 or 2 above is checked, and if all or part of the Mortgage
File was previously released to us, please release to us our previous receipt on
file with you, as well as any additional documents in your possession relating
to the above-specified Loan. If item 3 or 4 is checked, upon return of all of
the above documents to you as Trustee, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
________________________________________
________________________________________
________________________________________
By:________________________________________
Name:______________________________________
Title:_____________________________________
Date:______________________________________
TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGEMENT OF RECEIPT
By:________________________________________
Name:______________________________________
Title:_____________________________________
Date:______________________________________
J-2
EXHIBIT K
Form of Reporting Document
BLOOMBERG FILE LAYOUT
FIELD NAME LENGTH START END FORMAT/DESCRIPTION
----------------------------------------------------------------------------------------------------------------
Loan Number 10 1 10 X(10) Last 10 digits of loan ID
OMCR 3 11 13 X(3) For commercial mtg only
Property Type Code 1 14 14 9
Filler 4 15 18 X(4)
Loan Purpose Code 1 19 19 9
Filler 2 20 21 X(2)
Loan Type Code 1 22 22 9
Filler 2 23 24 X(2)
Current Interest Rate 6 25 30 99.999
Filler 4 31 34 X(4)
Original Loan Balance 11 35 45 9(8).99
Ending Sch Loan Bal 11 46 56 9(5).99
Filler 10 57 66 X(10)
First Payment Date 4 67 70 MMYY
Maturity Date 4 71 74 MMYY
Curr P&I Payment 8 75 82 9(5).99
Servicing Fee Rate 5 83 87 9.999
Orig Stated Term 3 88 90 999
Filler 1 91 91 X
Loan Status Code 2 92 93 99
Filler 2 94 94 X
Orig LTV Ratio 5 95 99 999.9
Filler 1 100 100 X
State Code 2 101 102 XX
Filler 9 103 111 X(9)
Paid Thru Date 6 112 117 MMYYDD
Filler 1 118 118 X
Adjustable Rate Code 1 119 119 X A =ARM, Blank =Fixed
Filler 11 120 130 X(11)
Balloon Flag 1 131 131 X B = Balloon, Blank - Not
Filler 1 132 132 X
Latest Appraisal Value 11 133 143 9(8).99
Filler 16 144 159 X(16)
Pymt Frequency Indicator 1 160 160 9
Filter 18 161 178 X(18)
Total Pymt 8 179 186 9(5).99
Filler 5 187 191 X(5)
Interest Collection Code 1 192 192 9
Filler 1 193 193 X
Payment Type Code 1 194 194 9
Filler 6 195 200 X(6)
Orig Note Rate 6 201 206 99.999
Filler 1 207 207 X
Index Type Code 1 208 208 9
K-1
FIELD NAME LENGTH START END FORMAT/DESCRIPTION
----------------------------------------------------------------------------------------------------------------
Filler 2 209 210 X
Gross Margin 5 211 215 9.999
Filler 1 216 216 X
Next Note Rate Change Date 4 217 220 MMYY
Filler 1 221 221 X
Next Pymt Change Date 4 222 225 MMYY
Filler 1 226 226 X
Note Rate Adj Freq 2 227 228 99 In days
Filler 1 229 229 X
Pymt Adj Freq 2 230 231 99
Filler 1 232 232 x
Periodic Rate Cap 5 233 237 99.999
Filler 8 238 245 X(8)
Lifetime Max Note Rate 6 246 251 99.999
Filler 1 252 252 X
Lifetime Min Note Rate 6 253 258 99.999
Filler 24 259 282 X(24)
Negative Amort Code 1 283 283 9 1= Yes, blank = No
Filler 12 284 295 X(12)
Note Rate Rounding Code 1 296 296 9
Filler 3 297. 299 X(3)
ARM Convertibility 1 300 300 9 1= Yes, blank = No
Primary Mortgagor Name 25 301 325 X(25)
Filler 1 326 326 X
Property Street Address 30 327 356 X(30)
Filler 3 357 359 X(3)
Property City 11 360 370 X(11)
Filler 1 371 371 X
Property Zip Code 5 372 376 9(5)
Filler 16 377 392 X(16)
Note Issue Date 6 393 398 MMYYDD
Filler 34 399 432 X(34)
Servicer Code 5 433 437 X(5)
Filler 1 438 438 X
Series ID 6 439 444 X(6)
Filler 27 445 471 X(27)
Curtailments (thru EOM) (5) 11 472 482 9(8).99
Filler 1 483 483 X
Curtailments (after EOM) (6) 11 484 494 9(8).99
Filler 1 495 495 X
Payoff Date 6 496 501 MMYYDD
K-2
TABLE OF CODES
Property Type Code:
01 - Single Family
02 - Multi Family
03 - Condo or Co-op
04 - Mobile Home
05 - Plan Unit Development
06 - Commercial (Non-Exempt)
07 - Commercial (Church)
08 - Commercial (School, Health Care Facility or Welfare Facility)
09 - Commercial (Retail)
10 - Commercial (Office)
11 - Commercial (Retail/Office)
12 - Commercial (Hotel)
13 - Commercial (Industrial)
14 - Commercial (Flex)
20 - Commercial (Retail, Anchored)
21 - Commercial (Retail, Unanchored)
22 - Commercial (Ministorage)
30 - Commercial (Multiple Property(ies))
99 - Other
Loan Purpose Code:
1 - Purchase
2 - No cash refinance
3 - Cash out refinance
4 - Construction Permanent
5 - Home Improvement
9 - Other
Loan Type Code:
1 - Fixed Rate
2 - Variable Rate
3 - Variable Rate With Negative Amortization
4 - GPM Plan I (30 yr. with a yearly payment increase of 2.5% for the
first 5 Years)
5 - GPM Plan II (30 yr. with a yearly payment increase
of 5% for the first 5 Years)
6 - GPM Plan III (30 yr. with a yearly payment increase of
7.5% for the first 5 Years)
7 - GPM Plan IV (30 yr. with a yearly payment increase of
2% for the first 10 Years)
8 - GPM Plan V (30 yr. with a yearly payment increase of
3% for the first 10 Years)
9 - Other
Loan Status Code:
00 - Performing
01 - Delinquent
02 - In Foreclosure
03 - REO loan
04 - Loan added due to substitution
05 - Loan removed due to substitution
06 - Loan Modified
07 - Specially Serviced
K-3
08 - Bankruptcy filed
09 - Other/Unknown
10 - Payoff (prepaid in full)
11 - Settlements
12 - 3rd Party Sale
13 - REO Sales
14 - Prepayment Penalty Waived
15 - Loan Repurchased
16 - Payment Default
17 - Rehabilitated/Corrected
Note Rate Rounding Code:
0 - Not Applicable (i.e. fixed rate mortgage)
1 - Index plus Gross Margin no rounding
2 - Index plus Gross Margin, rounded to nearest Rounding Factor
3 - Index plus Gross Margin, rounded up to nearest Rounding Factor
4 - Index plus Gross Margin, rounded down to nearest Rounding Factor
5 - Index, rounded to nearest Rounding Factor, plus Gross Margin
6 - Index, rounded up to nearest Rounding Factor, plus Gross Margin
7 - Index, rounded down to nearest Rounding Factor, plus Gross Margin
Payment Frequency Code:
1 - Bi-Weekly
2 - Monthly
3 - Quarterly
4 - Semi-Annual
5 - Annual
9 - Other
Interest Collection Code:
1 - Interest in arrears
2 - Interest in advance
3 - Simple interest
Payment Type Code:
1 - Blended P&I
2 - Constant principal
3 - Interest only
4 - Actual Blended P&I (Actual Payment Collection)
9 - Other
Loan Product Code:
1 - Conventional with mortgage insurance
2 - Federal Housing Authority
3 - Veterans Administration
4 - Conventional without mortgage insurance
5 - Farmers Home Administration
9 - Other
Index Type Code:
0 - Not Applicable (i.e. fixed rate mortgage)
K-4
1 - Six Month Treasury
2 - One Year Treasury
3 - Three year Treasury
4 - Five year Treasury
5 - 11th District Cost of Funds
6 - LIBOR
0 - Xxxxx Xxxx
0 - Xxxx Xxxxxx Journal LIBOR
9 - Other
K-5
EXHIBIT L
Master Agreement
(including Cap Agreement and Corridor Agreement)
SEE ATTACHED
L-1
EXHIBIT M
Form of Power of Attorney
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that ___________________________, a
_____________________________________, having a place of business at
_____________________________________, as Trustee (and in no personal or other
representative capacity) under the Pooling and Servicing Agreement, dated as of
__________, 20__ (as amended, restated, supplemented or otherwise modified from
time to time, the "Agreement"; capitalized terms not defined herein have the
definitions assigned to such terms in the Agreement), relating to the
__________________, hereby appoints _______________, in its capacity as a
Servicer under the Agreement, as the Trustee's true and lawful Special
Attorney-in-Fact, in the Trustee's name, place and stead and for the Trustee's
benefit, but only in its capacity as Trustee aforesaid, to perform all acts and
execute all documents as may be customary, necessary and appropriate to
effectuate the following enumerated transactions in respect of any mortgage,
deed of trust, promissory note or real estate owned from time to time owned
(beneficially or in title, whether the Trustee is named therein as mortgagee or
beneficiary or has become mortgagee or beneficiary by virtue of endorsement,
assignment or other conveyance) or held by or registered to the Trustee
(directly or through custodians or nominees), or in respect of which the Trustee
has a security interest or other lien, all as provided under the applicable
Agreement and only to the extent the respective Trustee has an interest therein
under the Agreement, and in respect of which the Servicer is acting as servicer
pursuant to the Agreement (the "Mortgage Documents").
This appointment shall apply to the following enumerated transactions under the
Agreement only:
1. The modification or re-recording of any Mortgage Document for the purpose of
correcting it to conform to the original intent of the parties thereto or to
correct title errors discovered after title insurance was issued and where such
modification or re-recording does not adversely affect the lien under the
Mortgage Document as insured.
2. The subordination of the lien under a Mortgage Document to an easement in
favor of a public utility company or a state or federal agency or unit with
powers of eminent domain including, without limitation, the execution of partial
satisfactions/releases, partial reconveyances and the execution of requests to
trustees to accomplish same.
3. The conveyance of the properties subject to a Mortgage Document to the
applicable mortgage insurer, or the closing of the title to the property to be
acquired as real estate so owned, or conveyance of title to real estate so
owned.
4. The completion of loan assumption and modification agreements in respect of
Mortgage Documents.
5. The full or partial satisfaction/release of a Mortgage Document or full
conveyance upon payment and discharge of all sums secured thereby, including,
without limitation, cancellation of the related note.
6. The assignment of any Mortgage Document, in connection with the repurchase of
the mortgage loan secured and evidenced thereby.
7. The full assignment of a Mortgage Document upon payment and discharge of all
sums secured thereby in conjunction with the refinancing thereof, including,
without limitation, the assignment of the related note.
M-1
8. With respect to a Mortgage Document, the foreclosure, the taking of a deed in
lieu of foreclosure, or the completion of judicial or non-judicial foreclosure
or termination, cancellation or rescission of any such foreclosure, including,
without limitation, any and all of the following acts:
a. the substitution of trustee(s) serving under a deed of trust,
in accordance with state law and the deed of trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or
notices of sale;
d. the cancellation/rescission of notices of default and/or
notices of sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under
the terms of the Mortgage Document or state law to
expeditiously complete said transactions in paragraphs 8(a)
through 8(e), above.
9. Demand, xxx for, recover, collection and receive each and every sum of money,
debt, account and interest (which now is, or hereafter shall become due and
payable) belonging to or claimed by the Trustee under the Mortgage Documents,
and to use or take any lawful means for recovery thereof by legal process or
otherwise.
10. Endorse on behalf of the Trustee all checks, drafts and/or negotiable
instruments made payable to the Trustee in respect of the Mortgage Documents.
The Trustee gives the Special Attorney-in-Fact full power and authority to
execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by this
Limited Power of Attorney, subject to the terms and conditions set forth in the
Agreement including the standard of care applicable to servicers in the
Agreement, and hereby does ratify and confirm what such Special Attorney-in-Fact
shall lawfully do or cause to be done by authority hereof.
[SIGNATURE PAGE FOLLOWS]
M-2
IN WITNESS WHEREOF, the Trustee has caused its corporate name and seal to be
hereto signed and affixed and these presents to be acknowledged by its duly
elected and authorized officer this ___ day of ___ , 20__.
____________________________, as Trustee
____________________________
By:
Name:
Title:
WITNESS: WITNESS:
__________________________________ ________________________________
Name: Name:
Title: Title:
XXXXX XX XXX XXXX
XX
XXXXXX XX XXX XXXX
Xx ______________, 20__, before me, the undersigned, a Notary Public in
and for said state, personally appeared __________________, personally known to
me to be the person whose name is subscribed to the within instrument and to be
a duly authorized and acting _______________ of ____________________, and such
person acknowledged to me that such person executed the within instrument in
such person's authorized capacity as a ___________________ of
_______________________, and that by such signature on the within instrument the
entity upon behalf of which such person acted executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
M-3
EXHIBIT N
Servicing Criteria
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
------------------- ------------------------------------------------------------------------------- ----------------
REG AB REFERENCE SERVICING CRITERIA APPLICABLE
TRUSTEE
RESPONSIBILITY
------------------- ------------------------------------------------------------------------------- ----------------
GENERAL SERVICING CONSIDERATIONS
------------------- ------------------------------------------------------------------------------- ----------------
Policies and procedures are instituted to monitor any performance or other X
1122(d)(1)(i) triggers and events of default in accordance with the transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
1122(d)(1)(ii) servicing activities.
------------------- ------------------------------------------------------------------------------- ----------------
Any requirements in the transaction agreements to maintain a
1122(d)(1)(iii) back-up servicer for the pool assets are maintained.
------------------- ------------------------------------------------------------------------------- ----------------
A fidelity bond and errors and omissions policy is in effect
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of
1122(d)(1)(iv) the transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
CASH COLLECTION AND ADMINISTRATION
------------------- ------------------------------------------------------------------------------- ----------------
Payments on pool assets are deposited into the appropriate custodial bank X
accounts and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the transaction
1122(d)(2)(i) agreements.
------------------- ------------------------------------------------------------------------------- ----------------
Disbursements made via wire transfer on behalf of an obligor or to an X
1122(d)(2)(ii) investor are made only by authorized personnel.
------------------- ------------------------------------------------------------------------------- ----------------
Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved
1122(d)(2)(iii) as specified in the transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
The related accounts for the transaction, such as cash
reserve accounts or X accounts established as a form of over
collateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
1122(d)(2)(v) Securities Exchange Act.
------------------- ------------------------------------------------------------------------------- ----------------
Unissued checks are safeguarded so as to prevent
1122(d)(2)(vi) unauthorized access.
------------------- ------------------------------------------------------------------------------- ----------------
Reconciliations are prepared on a monthly basis for all asset-backed X
securities related bank accounts, including custodial accounts and related
bank clearing accounts. These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days after the bank statement
cutoff date, or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than the person who
prepared the reconciliation; and (D) contain explanations for reconciling
items. These reconciling items are resolved within 90 calendar days of their
original identification, or such other number of days specified in the
1122(d)(2)(vii) transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
INVESTOR REMITTANCES AND REPORTING
------------------- ------------------------------------------------------------------------------- ----------------
Reports to investors, including those to be filed with the Commission, are X (only with
maintained in accordance with the transaction agreements and applicable respect to
Commission requirements. Specifically, such reports (A) are prepared in (A), (B) and
accordance with timeframes and other terms set forth in the transaction (D)
agreements; (B) provide information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal balance and number of pool
1122(d)(3)(i) assets serviced by the servicer.
------------------- ------------------------------------------------------------------------------- ----------------
Amounts due to investors are allocated and remitted in accordance with X
timeframes, distribution priority and other terms set forth in the
1122(d)(3)(ii) transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
Disbursements made to an investor are posted within two
business days to the X servicer's investor records, or such
other number of days specified in the
1122(d)(3)(iii) transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
Amounts remitted to investors per the investor reports agree with cancelled X
1122(d)(3)(iv) checks, or other form of payment, or custodial bank statements.
------------------- ------------------------------------------------------------------------------- ----------------
N-1
------------------- ------------------------------------------------------------------------------- ----------------
REG AB REFERENCE SERVICING CRITERIA APPLICABLE
TRUSTEE
RESPONSIBILITY
------------------- ------------------------------------------------------------------------------- ----------------
POOL ASSET ADMINISTRATION
------------------- ------------------------------------------------------------------------------- ----------------
Collateral or security on pool assets is maintained as required by the X*
1122(d)(4)(i) transaction agreements or related pool asset documents.
------------------- ------------------------------------------------------------------------------- ----------------
Pool assets and related documents are safeguarded as required by the X*
1122(d)(4)(ii) transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
Any additions, removals or substitutions to the asset pool are made, reviewed X
and approved in accordance with any conditions or requirements in the
1122(d)(4)(iii) transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
Payments on pool assets, including any payoffs, made in
accordance with the related pool asset documents are posted
to the servicer's obligor records maintained no more than
two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
accordance with the related pool
1122(d)(4)(iv) asset documents.
------------------- ------------------------------------------------------------------------------- ----------------
The servicer's records regarding the pool assets agree with
the servicer's records with respect to an obligor's unpaid
1122(d)(4)(v) principal balance.
------------------- ------------------------------------------------------------------------------- ----------------
Changes with respect to the terms or status of an obligor's
pool assets (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and
1122(d)(4)(vi) related pool asset documents.
------------------- ------------------------------------------------------------------------------- ----------------
Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the transaction
1122(d)(4)(vii) agreements.
------------------- ------------------------------------------------------------------------------- ----------------
Records documenting collection efforts are maintained during
the period a pool asset is delinquent in accordance with the
transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent pool assets including, for example,
phone calls, letters and payment rescheduling plans in cases
where delinquency is deemed temporary (e.g., illness or
1122(d)(4)(viii) unemployment).
------------------- ------------------------------------------------------------------------------- ----------------
Adjustments to interest rates or rates of return for pool
assets with variable rates are computed based on the related
1122(d)(4)(ix) pool asset documents.
------------------- ------------------------------------------------------------------------------- ----------------
Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's pool asset documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable pool
asset documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days of full
repayment of the related pool assets, or such other number
1122(d)(4)(x) of days specified in the transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the appropriate
bills or notices for such payments, provided that such
support has been received by the servicer at least 30
calendar days prior to these dates, or such other number of
1122(d)(4)(xi) days specified in the transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
Any late payment penalties in connection with any payment to
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late
1122(d)(4)(xii) payment was due to the obligor's error or omission.
------------------- ------------------------------------------------------------------------------- ----------------
Disbursements made on behalf of an obligor are posted within
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
1122(d)(4)(xiii) transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
------------------- ------------------------------------------------------------------------------- ----------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB,
is maintained as set forth in the
1122(d)(4)(xv) transaction agreements.
------------------- ------------------------------------------------------------------------------- ----------------
*With respect to its custodial functions.
Notwithstanding anything in the Agreement to the contrary, this Exhibit N may be
revised from time to time upon the mutual written agreement of the Depositor and
the Trustee, including, without limitation, for revisions in response to
evolving interpretations of Regulation AB, which revised Exhibit N shall
automatically become part of this Agreement and shall be attached hereto.
N-2
