EXHIBIT 99.1
EXECUTION COPY
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CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
THE BANK OF NEW YORK,
Trustee
and
WACHOVIA BANK, NATIONAL ASSOCIATION
Co-Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2003
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ASSET-BACKED CERTIFICATES, SERIES 2003-S1
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Table of Contents
Page
ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms...................................................4
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans...................................40
Section 2.02 Acceptance by Trustee of the Mortgage Loans....................44
Section 2.03 Representations, Warranties and Covenants of the Master Servicer
and the Seller.................................................46
Section 2.04 Representations and Warranties of the Depositor................57
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions
and Repurchases................................................59
Section 2.06 Authentication and Delivery of Certificates....................59
Section 2.07 Covenants of the Master Servicer...............................59
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans......................61
Section 3.02 Subservicing; Enforcement of the Obligations of Master
Servicer.......................................................62
Section 3.03 Rights of the Depositor, the Seller and the Trustee in Respect
of the Master Servicer.........................................63
Section 3.04 Trustee to Act as Master Servicer..............................63
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account; Seller Shortfall Interest Requirement;
Principal Reserve Fund; Insurer Support Reserve Fund...........63
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.......................................................68
Section 3.07 Access to Certain Documentation and Information Regarding the
Mortgage Loans.................................................68
Section 3.08 Permitted Withdrawals from the Certificate Account, Distribution
Account and the Carryover Reserve Fund.........................69
Section 3.09 The Mortgage Pool Insurance Policy.............................71
Section 3.10 Maintenance of Hazard Insurance................................71
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements......72
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of
Excess Proceeds and Realized Losses; Repurchase of Certain
Mortgage Loans.................................................73
Section 3.13 Trustee to Cooperate; Release of Mortgage Files................77
Section 3.14 Documents, Records and Funds in Possession of Master Servicer to
be Held for the Trustee........................................79
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Section 3.15 Servicing Compensation.........................................79
Section 3.16 Access to Certain Documentation................................80
Section 3.17 Annual Statement as to Compliance..............................80
Section 3.18 Annual Independent Public Accountants' Servicing Statement;
Financial Statements...........................................80
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances.......................................................81
Section 4.02 Reduction of Servicing Compensation in Connection with Prepayment
Interest Shortfalls............................................81
Section 4.03 [Reserved].....................................................82
Section 4.04 Distributions..................................................82
Section 4.05 Monthly Statements to Certificateholders.......................85
Section 4.06 [Reserved].....................................................87
Section 4.07 [Reserved].....................................................87
Section 4.08 Carryover Reserve Fund.........................................87
ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates...............................................89
Section 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates...................................................89
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..............93
Section 5.04 Persons Deemed Owners..........................................93
Section 5.05 Access to List of Certificateholders' Names and Addresses......93
Section 5.06 Book-Entry Certificates........................................94
Section 5.07 Notices to Depository..........................................95
Section 5.08 Definitive Certificates........................................95
Section 5.09 Maintenance of Office or Agency................................95
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01 Respective Liabilities of the Depositor, the Master Servicer and
the Seller.....................................................96
Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer or
the Seller.....................................................96
Section 6.03 Limitation on Liability of the Depositor, the Seller, the Master
Servicer and Others............................................96
Section 6.04 Limitation on Resignation of Master Servicer...................97
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.................97
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ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of Default..............................................98
Section 7.02 Trustee to Act; Appointment of Successor.......................99
Section 7.03 Notification to Certificateholders............................101
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of Trustee.............................................102
Section 8.02 Certain Matters Affecting the Trustee.........................103
Section 8.03 Trustee Not Liable for Mortgage Loans.........................104
Section 8.04 Trustee May Own Certificates..................................104
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses............104
Section 8.06 Eligibility Requirements for Trustee..........................105
Section 8.07 Resignation and Removal of Trustee............................105
Section 8.08 Successor Trustee.............................................106
Section 8.09 Merger or Consolidation of Trustee............................106
Section 8.10 Appointment of Co-Trustee or Separate Trustee.................107
Section 8.11 Tax Matters...................................................108
Section 8.12 The Co-Trustee................................................111
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans.........................................................117
Section 9.02 Final Distribution on the Certificates........................117
Section 9.03 Additional Termination Requirements...........................119
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.....................................................120
Section 10.02 Recordation of Agreement; Counterparts........................121
Section 10.03 Governing Law.................................................121
Section 10.04 Intention of Parties..........................................122
Section 10.05 Notices.......................................................122
Section 10.06 Severability of Provisions....................................123
Section 10.07 Assignment....................................................123
Section 10.08 Limitation on Rights of Certificateholders....................124
Section 10.09 Inspection and Audit Rights...................................124
Section 10.10 Certificates Nonassessable and Fully Paid.....................125
Section 10.11 Third Party Rights............................................125
Section 10.12 Rights in the Event of an Insurer Default or Insurer Coverage
Exhaustion Event..............................................125
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EXHIBITS
EXHIBIT A Forms of Certificates
EXHIBIT A-1 Form of Class A-1 Certificate
EXHIBIT A-2 Form of Class A-2 Certificate
EXHIBIT A-3 Form of Class A-3 Certificate
EXHIBIT A-4 Form of Class A-4 Certiticate
EXHIBIT A-5 Form of Class A-5 Certificate
EXHIBIT A-6 Form of Class A-IO Certificate
EXHIBIT A-7 Form of Class M-1 Certificate
EXHIBIT A-8 Form of Class M-2 Certificate
EXHIBIT B [Reserved]
EXHIBIT C [Reserved]
EXHIBIT D Form of Class A-R Certificate
EXHIBIT E Form of Tax Matters Person Certificate
EXHIBIT F Mortgage Loan Schedules
EXHIBIT F-1 List of Mortgage Loans
EXHIBIT F-2 Mortgage Loans for which All or a
Portion of a Related Mortgage File is not
Delivered to the Trustee on or prior to the
Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Form of Delay Delivery Certification
EXHIBIT G-4 [Reserved]
EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I Transfer Affidavit
EXHIBIT J Form of Transferor Certificate for Class A-R Certificates
EXHIBIT K [Reserved]
EXHIBIT L [Reserved]
EXHIBIT M Request for Release (for Trustee)
EXHIBIT N Request for Release (for Mortgage Loans Paid in
Full, Repurchased or Replaced)
EXHIBIT O Copy of Depositary Agreement
EXHIBIT P Form of Mortgage Note and Mortgage
EXHIBIT Q List of Mortgage File Exceptions
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POOLING AND SERVICING AGREEMENT, dated as of April 1, 2003, by and among
CWABS, INC., a Delaware corporation, as depositor (the "Depositor"), COUNTRYWIDE
HOME LOANS, INC., a New York corporation, as seller (the "Seller"), COUNTRYWIDE
HOME LOANS SERVICING LP, a Texas limited partnership, as master servicer (the
"Master Servicer"), THE BANK OF NEW YORK, a New York banking corporation, as
trustee (the "Trustee"), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national
banking association, as co-trustee (the "Co-Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to the
Trustee in return for the Certificates. As provided herein, the Trustee will
elect that the Trust Fund (except for the Carryover Reserve Fund, the Principal
Reserve Fund and the Insurer Support Reserve Fund) be treated for federal income
tax purposes as comprising two real estate mortgage investment conduits (each a
"REMIC" or, in the alternative, the "Lower Tier REMIC" and the "Upper Tier
REMIC," respectively). The Lower Tier REMIC will hold as assets all property of
the Trust Fund (other than the Carryover Reserve Fund, the Principal Reserve
Fund and the Insurer Support Reserve Fund) and will be evidenced by (i) the
Lower Tier REMIC Regular Interests, which will be uncertificated and will
represent the "REMIC regular interests" in the Lower Tier REMIC, and (ii) the
Class LT-A-R Interest, which will represent the "REMIC residual interest" in the
Lower Tier REMIC. The Upper Tier REMIC will hold as assets the Lower Tier REMIC
Regular Interests and will be evidenced by the Certificates, each of which
(other than the Class A-R Certificate) will represent ownership of one or more
"REMIC regular interests" in the Upper Tier REMIC. The Class A-R Certificate
will represent ownership of the sole class of "REMIC residual interest" in each
of the Lower Tier REMIC and the Upper Tier REMIC. The latest possible maturity
date of all REMIC regular interests created herein shall be the Latest Possible
Maturity Date.
The following table specifies the class designation, interest rate, and
principal amount for each class of Lower Tier REMIC Interest:
(Continued on next page)
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Lower Tier REMIC Interests
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Lower Tier Initial Class
REMIC Class Principal Class Interest
Designation Balance Rate Corresponding Class of Certificates
----------- ------- ---- -----------------------------------
LT-A-1 $230,000,000 (1) Class A-1
(2) Class A-IO
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LT-A-2 $61,400,000 (1) Class A-2
(2) Class A-IO
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LT-A-3 $22,000,000 (1) Class A-3
(2) Class A-IO
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LT-A-4 $8,600,000 (1) Class A-4
(2) Class A-IO
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LT-A-5 $40,000,000 (1) Class A-5
(2) Class A-IO
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LT-$100 (2) $100 (1) Class A-R
Class A-IO
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LT-M-1(2) $23,000,000 (1) Class M-1
Class A-IO
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LT-M-2(2) $15,000,000 (1) Class M-2
A-IO
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LT-A-R (3) (3) Class A-R
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(1) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for these Lower Tier REMIC Interests is a per annum rate equal
to the Net Rate Cap.
(2) The Class A-IO Certificates are entitled to receive on each Distribution
Date a specified portion of the interest payable on each Lower Tier REMIC
Interest (other than the LT-A-R Interest). Specifically, for each Accrual
Period, the Class A-IO Certificates are entitled to interest accruals on each
Lower Tier REMIC Interest in excess of the interest paid on such Lower Tier
REMIC Interest's corresponding, non-IO Certificate.
(3) The LT-A-R Interest will be the sole class of residual interest in the Lower
Tier REMIC. It does not have an interest rate or a principal balance.
On each Distribution Date, the Trustee shall allocate the losses on, and
distribute the principal on the Mortgage Loans to the Lower Tier REMIC Interests
in the same manner that such items are allocated to or distributed among the
Corresponding Classes of Certificates. On each Distribution Date, the Trustee
shall pay interest on the Lower Tier REMIC Interests at the rate designated
above.
The following table sets forth characteristics of the Certificates in the
Upper Tier REMIC, each of which Certificates, except for the Class A-R
Certificates, is hereby designated as a "regular interest" in the Upper Tier
REMIC.
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Original Certificate Pass-Through Rate
Class Principal Balance
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A-1 $230,000,000 (1)
A-2 $61,400,000 (1)
A-3 $22,000,000 (1)
A-4 $8,600,000 (1)
A-5 $40,000,000 (1)
A-IO $400,000,000(2) (1)
A-R $100(3) (1)
M-1 $23,000,000 (1)
M-2 $15,000,000 (1)
(1) The Certificates will accrue interest at the related Pass-Through Rates
identified in this Agreement.
(2) This is a notional amount. No principal will be paid on the Class A-IO
Certificates.
(3) The Class A-R Certificate will represent the sole class of residual
interest in the Upper Tier REMIC.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Seller, the Trustee and the Co-Trustee agree as
follows:
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ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms.
In addition to those defined terms defined in Section 1.02, whenever
used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
Accrual Period: With respect to the Class A-1 Certificates and any
Distribution Date, the period commencing on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the Closing
Date) and ending on the day immediately preceding such Distribution Date. With
respect to each Class of Certificates other than the Class A-1 Certificates, the
calendar month immediately preceding such Distribution Date. All calculations of
interest on the Class A-1 Certificates will be made on the basis of the actual
number of days elapsed in the related Accrual Period and on a 360 day year. All
calculations of interest on each Class of Certificates other than the Class A-1
Certificates will be made on the basis of a 360-day year consisting of twelve
30-day months.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage
Rate less the Expense Fee Rate.
Advance: The aggregate of the advances required to be made by the
Master Servicer with respect to any Distribution Date pursuant to Section 4.01,
the amount of any such advances being equal to the aggregate of payments of
principal and interest (net of the Servicing Fees) on the Mortgage Loans that
were due on the related Due Date and not received as of the close of business on
the related Determination Date; provided, however, with respect to each REO
Property that has not been liquidated, that the net monthly rental income (if
any) from such REO Property deposited in the Certificate Account for such
Distribution Date pursuant to Section 3.12 may be used to offset such advance
for the related REO Property.
Aggregate Class A Certificate Principal Balance: As to any date of
determination, the sum of (i) the Class A-1 Certificate Principal Balance, (ii)
the Class A-2 Certificate Principal Balance, (iii) the Class A-3 Certificate
Principal Balance, (iv) the Class A-4 Certificate Principal Balance and (v) the
Class A-5 Certificate Principal Balance.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Certificate Account at the close of business on the
immediately preceding Determination Date on account of (i) all Scheduled
Payments or portions thereof received in respect of the Mortgage Loans due after
the related Due Date and (ii) Principal Prepayments and Liquidation Proceeds
received in respect of such Mortgage Loans after the last day of the related
Prepayment Period or Due Period, respectively.
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Applied Realized Loss Amount: With respect to any Distribution Date,
the sum of the Realized Losses with respect to the Mortgage Loans which are to
be applied in reduction of the Certificate Principal Balance of the Subordinate
Certificates pursuant to this Agreement, which shall equal the amount, if any,
by which, Certificate Principal Balance of all Certificates (after all
distributions of principal on such Distribution Date) exceeds the sum of the
Stated Principal Balances of the Mortgage Loans for such Distribution Date. For
the avoidance of doubt and without duplication of the foregoing, Applied
Realized Loss Amounts shall include any Realized Losses that are not covered
under the Mortgage Pool Insurance Policy by operation of the Fraud Loss Limit
(as defined in the Mortgage Pool Insurance Policy) or the Special Hazard Limit
(as defined in the Mortgage Pool Insurance Policy).
Appraised Value: The appraised value of the Mortgaged Property based
upon the appraisal made for the Seller by a fee appraiser at the time of the
origination of the related Mortgage Loan, or the sales price of the Mortgaged
Property at the time of such origination, whichever is less, or with respect to
any Mortgage Loan originated in connection with a refinancing, the appraised
value of the Mortgaged Property based upon the appraisal made at the time of
such refinancing.
Bankruptcy Code: Title 11 of the United States Code.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Regular Certificates constitutes a Class of Book-Entry
Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the City of New York, New York, the States
of California or North Carolina, the Commonwealth of Pennsylvania or the city in
which the Corporate Trust Office of the Trustee is located are authorized or
obligated by law or executive order to be closed.
Carryover Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.08 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-S1". Funds in the Carryover Reserve Fund shall be held
in trust for the Certificateholders for the uses and purposes set forth in this
Agreement.
Certificate: Any one of the certificates of any Class executed and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-8, Exhibit D and Exhibit E.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of the Certificateholders and designated "Countrywide Home
Loans, Inc. in trust for registered holders of CWABS, Inc.,
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Asset-Backed Certificates, Series 2003-S1". Funds in the Certificate Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Certificate Account Deposit: An amount equal to the aggregate of all
amounts in respect of (i) principal of the Mortgage Loans due on or after the
Cut-off Date and received by the Master Servicer before the Closing Date and not
applied in computing the Cut-off Date Principal Balance thereof and (ii)
interest on the Mortgage Loans due on and after the Cut-off Date and received by
the Master Servicer before the Closing Date.
Certificate Owner: With respect to a Book-Entry Certificate, the
person that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than any
Class A-IO Certificates) and as of any Distribution Date, the Initial
Certificate Principal Balance of such Certificate less the sum of (i) all
amounts distributed with respect to such Certificate in reduction of the
Certificate Principal Balance thereof on previous Distribution Dates pursuant to
Section 4.04, and (ii) with respect to any Subordinate Certificates, any Applied
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates pursuant to Section 4.04. References herein to the Certificate Principal
Balance of a Class of Certificates shall mean the Certificate Principal Balances
of all Certificates in such Class. The Class A-IO Certificates shall have no
Certificate Principal Balance, and any reference to the Certificate Principal
Balance of the Certificates shall not include the Class A-IO Notional Amount.
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Class of Regular Certificates, 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 Voting Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Voting Interests necessary to effect such consent has been
obtained; provided that if any such Person (including the Depositor) owns 100%
of the Voting Interests evidenced by a Class of Certificates, such Certificates
shall be deemed to be Outstanding for purposes of any provision hereof (other
than the second sentence of Section 10.01 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 and the Mortgage Pool Insurer are entitled
to rely conclusively on a certification of the Depositor or any affiliate of the
Depositor in determining which Certificates are registered in the name of an
affiliate of the Depositor.
Class: All Certificates bearing the same Class designation as set
forth in Section 5.01 hereof.
Class A Certificates: The Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates, the Class A-4 Certificates and the
Class A-5 Certificates.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (A) Aggregate Class A Certificate Principal
Balance immediately prior to such
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Distribution Date over (B) 81.00% of the Stated Principal Balances of the
Mortgage Loans for such Distribution Date.
Class A-1 Certificate: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A-1a hereto,
representing the right to distributions as set forth herein.
Class A-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class A-1 Certificates.
Class A-1 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-1 Pass-Through Rate on
the Class A-1 Certificate Principal Balance immediately prior to such
Distribution Date plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
Class A-1 Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class A-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class A-1
Certificates with respect to interest on such prior Distribution Dates.
Class A-1 Interest Carryover Amount: For any Distribution Date on
which the Pass-Through Rate for the Class A-1 Certificates is based upon the Net
Rate Cap, the sum of (A) the excess of (i) the amount of interest that would
otherwise have accrued on the Class A-1 Certificates during the related Accrual
Period for such Class had such rate been calculated at One-Month LIBOR plus the
Class A-1 Margin for such Distribution Date, over (ii) the amount of interest
accrued on the Class A-1 Certificates at the Net Rate Cap during such Accrual
Period and (B) the Class A-1 Interest Carryover Amount for all previous
Distribution Dates not previously paid pursuant to Section 4.04, together with
interest thereon at the Class A-1 Pass-Through Rate (without giving effect to
the Net Rate Cap).
Class A-1 Margin: 0.100% per annum.
Class A-1 Pass-Through Rate: For the first Distribution Date, 1.41438%
per annum. and, for any Distribution Date thereafter, the lesser of (i)
One-Month LIBOR plus the Class A-1 Margin and (ii) the Net Rate Cap for such
Distribution Date.
Class A-2 Certificate: Any Certificate designated as a "Class A-2
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.
Class A-2 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class A-2 Certificates.
Class A-2 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-2 Pass-Through Rate on
the Class A-2 Certificate Principal Balance immediately prior to such
Distribution Date plus any amount previously
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distributed with respect to interest for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.
Class A-2 Fixed Rate: 3.093% per annum.
Class A-2 Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class A-2 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class A-2
Certificates with respect to interest on such prior Distribution Dates.
Class A-2 Interest Carryover Amount: For any Distribution Date on
which the Pass-Through Rate for the Class A-2 Certificates is based upon the Net
Rate Cap, the sum of (A) the excess of (i) the amount of interest that would
otherwise have accrued on the Class A-2 Certificates during the related Accrual
Period for such Class had such rate been calculated at the Class A-2 Fixed Rate
for such Distribution Date, over (ii) the amount of interest accrued on the
Class A-2 Certificates at the Net Rate Cap during such Accrual Period and (B)
the Class A-2 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class A-2 Pass-Through Rate (without giving effect to the Net Rate Cap).
Class A-2 Pass-Through Rate: For any Distribution Date, the lesser of
(i) the Class A-2 Fixed Rate and (ii) the Net Rate Cap for such Distribution
Date.
Class A-3 Certificate: Any Certificate designated as a "Class A-3
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
Class A-3 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class A-3 Certificates.
Class A-3 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-3 Pass-Through Rate on
the Class A-3 Certificate Principal Balance immediately prior to such
Distribution Date plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
Class A-3 Fixed Rate: For any Distribution Date on or prior to the
Optional Termination Date, 4.257% per annum, and for any Distribution Date after
the Optional Termination Date, 4.757% per annum.
Class A-3 Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class A-3 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class A-3
Certificates with respect to interest on such prior Distribution Dates.
Class A-3 Interest Carryover Amount: For any Distribution Date on
which the Pass-Through Rate for the Class A-3 Certificates is based upon the Net
Rate Cap, the sum of (A) the excess of (i) the amount of interest that would
otherwise have accrued on the Class A-3
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Certificates during the related Accrual Period for such Class had such rate been
calculated at the Class A-3 Fixed Rate for such Distribution Date, over (ii) the
amount of interest accrued on the Class A-3 Certificates at the Net Rate Cap
during such Accrual Period and (B) the Class A-3 Interest Carryover Amount for
all previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class A-3 Pass-Through Rate (without
giving effect to the Net Rate Cap).
Class A-3 Pass-Through Rate: For any Distribution Date, the lesser of
(i) the Class A-3 Fixed Rate and (ii) the Net Rate Cap for such Distribution
Date.
Class A-4 Certificate: Any Certificate designated as a "Class A-4
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein.
Class A-4 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class A-4 Certificates.
Class A-4 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-4 Pass-Through Rate on
the Class A-4 Certificate Principal Balance immediately prior to such
Distribution Date plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
Class A-4 Fixed Rate: For any Distribution Date on or prior to the
Optional Termination Date, 5.009% per annum, and for any Distribution Date after
the Optional Termination Date, 5.509% per annum.
Class A-4 Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class A-4 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class A-4
Certificates with respect to interest on such prior Distribution Dates.
Class A-4 Interest Carryover Amount: For any Distribution Date on
which the Pass-Through Rate for the Class A-4 Certificates is based upon the Net
Rate Cap, the sum of (A) the excess of (i) the amount of interest that would
otherwise have accrued on the Class A-4 Certificates during the related Accrual
Period for such Class had such rate been calculated at the Class A-4 Fixed Rate
for such Distribution Date, over (ii) the amount of interest accrued on the
Class A-4 Certificates at the Net Rate Cap during such Accrual Period and (B)
the Class A-4 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class A-4 Pass-Through Rate (without giving effect to the Net Rate Cap).
Class A-4 Pass-Through Rate: For any Distribution Date, the lesser of
(i) the Class A-4 Fixed Rate and (ii) the Net Rate Cap for such Distribution
Date.
Class A-5 Certificate: Any Certificate designated as a "Class A-5
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.
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Class A-5 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class A-5 Certificates.
Class A-5 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-5 Pass-Through Rate on
the Class A-5 Certificate Principal Balance immediately prior to such
Distribution Date plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
Class A-5 Fixed Rate: For any Distribution Date on or prior to the
Optional Termination Date, 4.321% per annum, and for any Distribution Date after
the Optional Termination Date, 4.821% per annum.
Class A-5 Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class A-5 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class A-5
Certificates with respect to interest on such prior Distribution Dates.
Class A-5 Interest Carryover Amount: For any Distribution Date on
which the Pass-Through Rate for the Class A-5 Certificates is based upon the Net
Rate Cap, the sum of (A) the excess of (i) the amount of interest that would
otherwise have accrued on the Class A-5 Certificates during the related Accrual
Period for such Class had such rate been calculated at the Class A-5 Fixed Rate
for such Distribution Date, over (ii) the amount of interest accrued on the
Class A-5 Certificates at the Net Rate Cap during such Accrual Period and (B)
the Class A-5 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class A-5 Pass-Through Rate (without giving effect to the Net Rate Cap).
Class A-5 Pass-Through Rate: For any Distribution Date, the lesser of
(i) the Class A-5 Fixed Rate and (ii) the Net Rate Cap for such Distribution
Date.
Class A-IO Certificate: Any Certificate designated as a "Class A-IO
Certificate" on the face thereof, in the form of Exhibit A-6 hereto.
Class A-IO Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-IO Pass-Through Rate on
the Class A-IO Notional Amount immediately prior to such Distribution Date plus
any amount previously distributed with respect to interest for such Class that
is recovered as a voidable preference by a trustee in bankruptcy.
Class A-IO Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class A-IO Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class A-IO
Certificates with respect to interest on such prior Distribution Dates.
Class A-IO Notional Amount: For any Distribution Date, an amount equal
to the Stated Principal Balance of the Mortgage Loans for such Distribution
Date.
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Class A-IO Pass-Through Rate: With respect to any Distribution Date,
the excess of (i) the weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans (weighted on the basis of the Stated Principal Balances thereof)
over (ii) the sum of (x) weighted average Pass-Through Rate of the Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class M-1 and Class M-2 Certificates
(weighted on the basis of the respective Certificate Principal Balances thereof
and adjusted, in the case of the Class A-1 Pass-Through Rate, to an effective
rate for the related Accrual Period reflecting the calculation of interest on
the basis of a 360-day year that consists of twelve 30-day months) and (y) the
Effective Insurer Support Reserve Fund Pass-Through Rate for such Distribution
Date. Solely for federal income tax purposes, the Class A-IO Pass Through Rate
will be calculated by substituting for clause (ii) in the preceding sentence,
the weighted average of the pass through rates of REMIC 1 XX-X-0, XX-X-0,
XX-X-0, XX-X-0, XX-X-0, LT-M-1 and LT-M-2 with the pass through rate in respect
of each such Interest subject to a cap equal to the Pass Through Rate in respect
of its Corresponding Upper Tier REMIC Class, as provided in the Preliminary
Statement herein.
Class A-R Certificate: Any one of the Class A-R Certificates executed
and authenticated by the Trustee in substantially the form set forth in Exhibits
D and E hereto.
Class A-R Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class A-R Certificates.
Class A-R Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class A-R Pass-Through Rate on
the Class A-R Certificate Principal Balance immediately prior to such
Distribution Date plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
Class A-R Fixed Rate: 3.093% per annum.
Class A-R Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class A-R Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class A-R
Certificates with respect to interest on such prior Distribution Dates.
Class A-R Interest Carryover Amount: For any Distribution Date on
which the Pass-Through Rate for the Class A-R Certificates is based upon the Net
Rate Cap, the sum of (A) the excess of (i) the amount of interest that would
otherwise have accrued on the Class A-R Certificates during the related Accrual
Period for such Class had such rate been calculated at the Class A-R Fixed Rate
for such Distribution Date, over (ii) the amount of interest accrued on the
Class A-R Certificates at the Net Rate Cap during such Accrual Period and (B)
the Class A-R Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class A-R Pass-Through Rate (without giving effect to the Net Rate Cap).
Class A-R Pass-Through Rate: For any Distribution Date, the lesser of
(i) the Class A-R Fixed Rate and (ii) the Net Rate Cap for such Distribution
Date.
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Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-1 Certificates.
Class M-1 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-1 Pass-Through Rate on
the Class M-1 Certificate Principal Balance immediately prior to such
Distribution Date plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
Class M-1 Fixed Rate: 5.081% per annum.
Class M-1 Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class M-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class M-1
Certificates with respect to interest on such prior Distribution Dates.
Class M-1 Interest Carryover Amount: For any Distribution Date on
which the Pass-Through Rate for the Class M-1 Certificates is based upon the Net
Rate Cap, the sum of (A) the excess of (i) the amount of interest that would
otherwise have accrued on the Class M-1 Certificates during the related Accrual
Period for such Class had such rate been calculated at the Class M-1 Fixed Rate
for such Distribution Date, over (ii) the amount of interest accrued on the
Class M-1 Certificates at the Net Rate Cap during such Accrual Period and (B)
the Class M-1 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class M-1 Pass-Through Rate (without giving effect to the Net Rate Cap).
Class M-1 Pass-Through Rate: For any Distribution Date, the lesser of
(i) the Class M-1 Fixed Rate and (ii) the Net Rate Cap for such Distribution
Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (A) the Aggregate Class A
Certificate Principal Balance (after taking into account distribution of the
Class A Principal Distribution Amount on such Distribution Date) and (B) the
Class M-1 Certificate Principal Balance immediately prior to such Distribution
Date over (ii) 92.50% of the Stated Principal Balances of the Mortgage Loans for
such Distribution Date; provided, however, that if the Class M-1 Certificates
shall be the only Class of Certificates outstanding on a Distribution Date, the
Class M-1 Principal Distribution Amount with respect to such Distribution shall
equal 100% of the Principal Distribution Amount for such Distribution Date.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to distributions as set forth herein.
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Class M-2 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-2 Certificates.
Class M-2 Current Interest: For any Distribution Date, the interest
accrued during the related Accrual Period at the Class M-2 Pass-Through Rate on
the Class M-2 Certificate Principal Balance immediately prior to such
Distribution Date plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.
Class M-2 Fixed Rate: 5.954% per annum.
Class M-2 Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class M-2 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class M-2
Certificates with respect to interest on such prior Distribution Dates.
Class M-2 Interest Carryover Amount: For any Distribution Date on
which the Pass-Through Rate for the Class M-2 Certificates is based upon the Net
Rate Cap, the sum of (A) the excess of (i) the amount of interest that would
otherwise have accrued on the Class M-2 Certificates during the related Accrual
Period for such Class had such rate been calculated at the Class M-2 Fixed Rate
for such Distribution Date, over (ii) the amount of interest accrued on the
Class M-2 Certificates at the Net Rate Cap during such Accrual Period and (B)
the Class M-2 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class M-2 Pass-Through Rate (without giving effect to the Net Rate Cap).
Class M-2 Pass-Through Rate: For any Distribution Date, the lesser of
(i) the Class M-2 Fixed Rate and (ii) the Net Rate Cap for such Distribution
Date.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (A) the Aggregate Class A
Certificate Principal Balance (after taking into account distribution of the
Class A Principal Distribution Amount on such Distribution Date), (B) the Class
M-1 Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date) and (C) the
Class M-2 Certificate Principal Balance immediately prior to such Distribution
Date over (ii) the aggregate Stated Principal Balances of the Mortgage Loans for
such Distribution Date.
Closing Date: May 5, 2003.
Co-Trustee: Wachovia Bank, National Association, a national banking
association, not in its individual capacity, but solely in its capacity as
co-trustee for the benefit of the Certificateholders under this Agreement, and
any successor thereto, and any corporation or national banking association
resulting from or surviving any consolidation or merger to which it or its
successors may be a party.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
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Combined Loan-to-Value Ratio: The fraction, expressed as a percentage,
the numerator of which is the sum of (x) the original principal balance of the
related Mortgage Loan and (y) the outstanding principal balance at the date of
origination of the Mortgage Loan of any senior mortgage loan, and the
denominator of which is the Appraised Value of the related Mortgaged Property.
Compensating Interest: With respect to any Distribution Date, an
amount equal to the lesser of (x) one-half of the Servicing Fee for the related
Due Period and (y) the aggregate Prepayment Interest Shortfalls for such
Distribution Date.
Corporate Trust Office: The designated office of the Trustee in the
State of New York where at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, (Attention: Corporate Trust MBS Administration), telephone: (212)
000-0000, facsimile: (000) 000-0000.
Cumulative Loss Trigger Event: With respect to any Distribution Date
after the Stepdown Date, the aggregate amount of Trigger Event Realized Losses
on the Mortgage Loans from (and including) the Cut-off Date to (and including)
the last day of the related Due Period exceeds the applicable percentage, for
such Distribution Date, of the aggregate Cut-Off Date Principal Balance of the
Mortgage Loans, as set forth below:
Distribution Date Percentage
------------------------------- ---------------
May 2006--April 2007................................... 2.00%
May 2007--April 2008................................... 2.50%
May 2008--April 2009................................... 3.25%
May 2009 and thereafter................................ 4.00%
Current Interest: With respect to (i) the Class A-1
Certificates, the Class A-1 Current Interest, (ii) the Class A-2 Certificates,
the Class A-2 Current Interest, (iii) the Class A-3 Certificates, the Class A-3
Current Interest, (iv) the Class A-4 Certificates, the Class A-4 Current
Interest, (v) the Class A-5 Certificates, the Class A-5 Current Interest, (vi)
the Class A-IO Certificates, the Class A-IO Current Interest, (vii) the Class
A-R Certificates, the Class A-R Current Interest, (viii) the Class M-1
Certificates, the Class M-1 Current Interest and (ix) the Class M-2
Certificates, the Class M-2 Current Interest.
Cut-off Date: In the case of any Mortgage Loan, the later of (x) April
1, 2003 and (y) the date of origination of such Mortgage Loan.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all payments of principal due on or prior to the Cut-off Date,
whether or not received, and all Principal Prepayments received on or prior to
the Cut-off Date, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
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Debt Service Reduction: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.
Definitive Certificates: As defined in Section 5.06.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.
Delay Delivery Mortgage Loans: The Mortgage Loans identified on the
schedule of Mortgage Loans hereto set forth on Exhibit F-2 hereof for which all
or a portion of a related Mortgage File is not delivered to the Trustee on or
prior to the Closing Date. The Depositor shall deliver (or cause delivery of)
the Mortgage Files to the Trustee: (A) with respect to at least 50% of the
Mortgage Loans, not later than the Closing Date, (B) with respect to at least an
additional 40% of the Mortgage Loans, not later than 20 days after the Closing
Date, and (C) with respect to the remaining 10% of the Mortgage Loans, not later
than thirty days after the Closing Date. To the extent that Countrywide Home
Loans, Inc. shall be in possession of any Mortgage Files with respect to any
Delay Delivery Loan, until delivery to of such Mortgage File to the Trustee as
provided in Section 2.01, Countrywide Home Loans, Inc. shall hold such files as
agent and in trust for the Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquency Trigger Event: With respect to any Distribution Date after
the Stepdown Date, (A) the product of (i) 3.50 times (ii) a fraction, expressed
as a percentage, the numerator of which is the aggregate Stated Principal
Balance for such Distribution Date of all Mortgage Loans 60 or more days
delinquent as of the close of business on the last day of the calendar month
preceding such Distribution Date (including Mortgage Loans in foreclosure and
REO Properties) and the denominator of which is the aggregate Stated Principal
Balance for such Distribution Date of all Mortgage Loans, equals or exceeds (B)
the related Required Percentage.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
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Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the "Initial Notional Amount of this Certificate" or, if neither of the
foregoing, the Percentage Interest appearing on the face thereof.
Depositor: CWABS, Inc., a Delaware corporation, or its successor in
interest.
Depository: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be 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 Agreement: With respect to the Book-Entry Certificates, the
agreement among the Depositor, the Trustee and the initial Depository, dated as
of the Closing Date, substantially in the form of Exhibit O.
Depository Participant: A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the 15th
day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.
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 "The Bank of New York,
in trust for registered holders of CWABS, Inc., Asset-Backed Certificates,
Series 2003-S1". Funds in the Distribution Account shall be held in trust for
the Certificateholders for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, 1:00
p.m. Pacific 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 25th day is not a Business Day,
the next succeeding Business Day, commencing in May 2003.
Due Date: With respect to any Mortgage Loan and Due Period, the due
date for scheduled payments of interest and/or principal on that Mortgage Loan
occurring in such Due Period as provided in the related Mortgage Note.
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 such Distribution Date occurs and ending on the Due Date in the month
in which such Distribution Date occurs.
-16-
Effective Insurer Support Reserve Fund Pass-Through Rate: For any
Distribution Date, a fraction, expressed as a percentage, the numerator of which
is the product of (x) the Required Insurer Support Reserve Fund Monthly Deposit
for such Distribution Date times (y) 12 and the denominator of which is the
Stated Principal Balance of the Mortgage Loans as of the first day of the
related Due Period.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and 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, if Xxxxx'x is not a Rating Agency) are rated by each Rating
Agency in one of its two highest long-term and its highest short-term rating
categories respectively, at the time any amounts are held on deposit therein, or
(ii) an account or accounts in a depository institution or trust company in
which such accounts are insured by the FDIC (to the limits established by the
FDIC) and the uninsured deposits in which accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee, the
Mortgage Pool Insurer and each Rating Agency, the Certificateholders have a
claim with respect to the funds in such account or a perfected first priority
security interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
the corporate trust department of a federal or state chartered depository
institution or trust company having capital and surplus of not less than
$50,000,000, acting in its fiduciary capacity or (iv) any other account
acceptable to the Rating Agencies. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee.
Eligible Repurchase Month: As defined in Section 3.12(c) hereof.
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 applicable requirements of the
Underwriter's Exemption.
ERISA-Restricted Certificates: The Class A-R Certificates, and, until
they have been the subject of an ERISA-Qualifying Underwriting, the Regular
Certificates; and Certificates of any class that ceases to satisfy the
applicable rating requirement under the Underwriter's Exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Proceeds: With respect to any Liquidated Loan, any Liquidation
Proceeds that are in excess of the sum of (i) the unpaid principal balance of
such Liquidated Loan as of the date on which such Mortgage Loan became a
Liquidated Loan plus (ii) interest at the Mortgage Rate from the Due Date as to
which interest was last paid or advanced to Certificateholders (and not
reimbursed to the Master Servicer) up to the Due Date in the month in which such
Liquidation Proceeds are required to be distributed on the Stated Principal
Balance of such
-17-
Liquidated Loan outstanding during each Due Period as to which such interest was
not paid or advanced.
Expense Fee Rate: The sum of (i) the Servicing Fee Rate, (ii) the
Trustee Fee Rate and (iii) the Mortgage Pool Insurance Policy Premium Rate.
Xxxxxx Xxx: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
Xxxxxxx Mac: 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.
Initial Certificate Principal Balance: With respect to any
Certificate, the Certificate Principal Balance of such Certificate or any
predecessor Certificate on the Closing Date.
Insurance Agreement: The Insurance, Reimbursement and Indemnity
Agreement, dated as May 5, 2003, among the Mortgage Pool Insurer, the Depositor,
the Seller and the Master Servicer.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including, without limitation, the Mortgage
Pool Insurance Policy, and including all riders and endorsements thereto in
effect with respect to such Mortgage Loan, including any replacement policy or
policies for any Insurance Policies.
Insurance Proceeds: Insurance Proceeds are (i) all proceeds paid in
respect of the Mortgage Loans pursuant to any Insurance Policy (including,
without limitation, the Mortgage Pool Insurance Policy) or any other insurance
policy covering a Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under the Mortgage, the Master Servicer or the trustee under the deed
of trust and are not applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing mortgage loans held for its own
account, in each case other than any amount included in such Insurance Proceeds
in respect of Insured Expenses and (ii) any Insurer Support Reserve Fund Applied
Amounts.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Insurer Default: Any of the following events:
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(a) the Mortgage Pool Insurer shall have failed to make a payment
required under the Mortgage Pool Insurance Policy and such failure continued
unremedied for two Business Days; or
(b) the Mortgage Pool Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the United
States Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (ii) made
a general assignment for the benefit of its creditors, or (iii) had an order for
relief entered against it under the Untied States Bankruptcy Code or any other
similar federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the Insurance Department of the
Commonwealth of Pennsylvania or other competent regulatory authority shall have
entered a final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent or receiver for the Mortgage Pool Insurer or for all
or any material portion of its property or (ii) authorizing the taking of
possession by a custodian, trustee, agent or receiver of the Mortgage Pool
Insurer (or the taking of possession of all or any material portion of the
property of the Mortgage Pool Insurer).
Insurer Coverage Exhaustion Event: All of the coverage amounts under
the Mortgage Pool Insurance Policy shall have been reduced to zero.
Insurer Purchase Price: With respect to any Mortgage Loan that the
Mortgage Pool Insurer has a right to purchase pursuant to Section 3.12(d)
hereof, an amount equal to the sum of (i) 100% of the unpaid principal balance
of the Mortgage Loan as of the date of such purchase plus (ii) accrued and
unpaid interest thereon at the applicable Mortgage Rate through the date of
payment for such purchase plus (iii) in the case of a Mortgage Loan purchased on
a servicing-released basis, any unreimbursed Servicing Advances; provided,
however, that in calculating the Insurer Purchase Price, such Insurer Purchase
Price shall not include any reductions effected by the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended.
Insurer Sale Price: With respect to any Mortgage Loan that the Seller
is obligated to purchase from the Mortgage Pool Insurer pursuant to Section
3.12(d) hereof, an amount equal to the sum of (i) 100% of the unpaid principal
balance of the Mortgage Loan as of the date of such purchase plus (ii) accrued
interest thereon at the applicable Mortgage Rate from (a) the date through which
interest was last paid by the Mortgagor to (b) the date of purchase plus (iii)
in the case of a Mortgage Loan purchased by the Mortgage Pool Insurer from the
Trust Fund on a servicing-released basis, the amount paid by the Mortgage Pool
Insurer pursuant to clause (iii) of the definition of "Insurer Purchase Price"
in connection with such purchase and any other unreimbursed Servicing Advances
made by the Mortgage Pool Insurer.
Insurer Support Reserve Fund: The separate Eligible Account created
initially maintained by the Trustee pursuant to Section 3.05(g) in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-S1". Funds in the Insurer Support
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Reserve Fund shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Insurer Support Reserve Fund Application Event: With respect to any
Distribution Date, the occurrence of each of the following: (a) the Master
Servicer shall have submitted a claim eligible for submission under the Mortgage
Pool Insurance Policy; (b) on the date on which the Mortgage Pool Insurer elects
to pay such claim in accordance with the terms of the Mortgage Pool Insurance
Policy, the amount on deposit in the Insurer Support Reserve Fund shall be
greater than zero; and (c) no later than 12:00 noon, Philadelphia time, on the
date referred to in clause (b) above, the Trustee shall receive from the
Mortgage Pool Insurer a written instruction to withdraw from the Insurer Support
Reserve Fund the Insurer Support Reserve Fund Applied Amount with respect to
such claim and to apply such amount in accordance with Section 3.05(g) hereof;
provided that the amount specified for withdrawal in such instruction shall not
be greater than the lesser of (x) the amount of such claim and (y) the amount on
deposit in the Insurer Support Reserve Fund on the date referred to in clause
(b) above.
Insurer Support Reserve Fund Applied Amount: With respect to any claim
for payment under the Mortgage Pool Insurance Policy that shall be submitted by
the Master Servicer, the lesser of (x) the amount of such claim and (y) the
amount on deposit in the Insurer Support Reserve Fund on the date on which the
Mortgage Pool Insurer elects to pay such claim in accordance with terms of the
Mortgage Pool Insurance Policy.
Insurer Support Reserve Fund Carryover Amount: With respect to any
Distribution Date, the excess of (a) the aggregate of the Scheduled Insurer
Support Reserve Fund Monthly Deposits for all prior Distribution Dates over (b)
the aggregate of the Required Insurer Support Reserve Fund Monthly Deposits for
all prior Distribution Dates.
Insurer Support Reserve Fund Pass-Through Rate: With respect to any
Distribution Date, the per annum rate set forth below:
Insurer Support
Reserve Fund
Month of Distribution Date Pass-Through Rate
--------------------------------------- ---------------------
May 2003 through October 2003 1.00%
--------------------------------------- ---------------------
November 2003 through June 2004 4.00%
--------------------------------------- ---------------------
July 2004 through October 2004 6.00%
--------------------------------------- ---------------------
November 2004 through May 2005 7.00%
--------------------------------------- ---------------------
June 2005 through December 2005 6.00%
--------------------------------------- ---------------------
January 2006 through March 2007 5.00%
--------------------------------------- ---------------------
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April 2007 through September 2007 4.00%
--------------------------------------- ---------------------
October 2007 through September 2010 2.00%
--------------------------------------- ---------------------
October 2010 and thereafter 0.00%
--------------------------------------- ---------------------
Insurer Support Reserve Fund Reimbursement Amount: With respect to any
claim for payment under the Mortgage Pool Insurance Policy, all or any portion
(other than with respect to claims deemed to have been filed by the Mortgage
Pool Insurer pursuant to Section 3.2 of the Mortgage Pool Insurance Policy) of
which shall have been paid directly by the Mortgage Pool Insurer to the
Co-Trustee in accordance with the terms of the Mortgage Pool Insurance Policy,
the lesser of (x) the amount paid directly by the Mortgage Pool Insurer to the
Co-Trustee in respect of such claim (net of any portion of such amount
previously reimbursed to the Mortgage Pool Insurer) with interest thereon at the
Late Payment Rate from the date on which such claim shall have been paid to the
date on which reimbursement therefor shall be received and (y) the amount on
deposit in the Insurer Support Reserve Fund on the date on which the Trustee
shall have received the related withdrawal instruction referenced in clause (d)
of the definition of "Insurer Support Reserve Fund Reimbursement Event".
Insurer Support Reserve Fund Reimbursement Event: The occurrence of
each of the following: (a) the Master Servicer shall have submitted a claim
eligible for submission under the Mortgage Pool Insurance Policy or a claim
shall be deemed to have been filed by the Mortgage Pool Insurer pursuant to
Section 3.2 of the Mortgage Pool Insurance Policy; (b) on the date on which the
Mortgage Pool Insurer shall have elected to pay such claim in accordance with
the terms of the Mortgage Pool Insurance Policy, the amount on deposit in the
Insurer Support Reserve Fund shall have been less than the amount of such claim;
(c) the Mortgage Pool Insurer shall have paid directly to the Co-Trustee, in
respect of such claim, an amount equal to the excess of (i) the amount of such
claim over (ii) the amount on deposit in the Insurer Support Reserve Fund on the
date referred to in clause (b) above (and the balance of such claim shall have
been paid by the application of an Insurer Support Reserve Fund Applied Amount);
and (d) subsequent to the payment of such claim (or such portion thereof), the
Trustee shall receive from the Mortgage Pool Insurer a written instruction to
withdraw from the Insurer Support Reserve Fund the Insurer Support Reserve Fund
Reimbursement Amount with respect to such claim (or such portion thereof) and to
forward such amount to the Mortgage Pool Insurer in accordance with Section
3.05(g) hereof; provided that the amount specified for withdrawal in such
instruction shall not be greater than the lesser of (x) the amount of paid
directly by the Mortgage Pool Insurer to the Co-Trustee in respect of such claim
(net of any portion of such amount previously reimbursed to the Mortgage Pool
Insurer) with interest thereon at the Late Payment Rate from the date on which
such claim shall have been paid to the date on which reimbursement therefor
shall be received and (y) the amount on deposit in the Insurer Support Reserve
Fund on the date on which such instruction shall have been received.
Interest Carry Forward Amount: With respect to (i) the Class A-1
Certificates, the Class A-1 Interest Carry Forward Amount, (ii) the Class A-2
Certificates, the Class A-2 Interest Carry Forward Amount, (iii) the Class A-3
Certificates, the Class X-0 Xxxxxxxx Xxxxx
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Xxxxxxx Xxxxxx, (xx) the Class A-4 Certificates, the Class A-4 Interest Carry
Forward Amount, (v) the Class A-5 Certificates, the Class A-5 Interest Carry
Forward Amount, (vi) the Class A-R Certificates, the Class A-R Interest Carry
Forward Amount, (vii) the Class A-IO Certificates, the Class A-IO Interest Carry
Forward Amount, (viii) the Class M-1 Certificates, the Class M-1 Interest Carry
Forward Amount and (ix) the Class M-2 Certificates, the Class M-2 Interest Carry
Forward Amount.
Interest Determination Date: With respect to the Class A-1
Certificates for the first Accrual Period, May 1, 2003. With respect to the
Class A-1 Certificates for any Accrual Period thereafter, the second LIBOR
Business Day preceding the commencement of such Accrual Period.
Interest Funds: The Interest Remittance Amount less the Trustee Fee
for the Mortgage Loans.
Interest Remittance Amount: With respect to the Mortgage Loans and any
Master Servicer Advance Date, the sum, without duplication, of (i) all scheduled
interest collected during the related Due Period with respect to the Mortgage
Loans less the related Servicing Fee, (ii) all related Advances relating to
interest with respect to the Mortgage Loans, (iii) all interest on Principal
Prepayments other than Prepayment Interest Excess, (iv) all Compensating
Interest for the related Distribution Date, (v) Liquidation Proceeds with
respect to the Mortgage Loans collected during the related Due Period, to the
extent such Liquidation Proceeds relate to interest, and (vi) for the Master
Servicer Advance Date in May 2003, the Seller Shortfall Interest Requirement for
the related Master Servicer Advance Date (if any), less (x) all Nonrecoverable
Advances relating to interest reimbursed during the related Due Period and (y)
the Mortgage Pool Insurance Policy Premium for the related Distribution Date.
Late Payment Rate: means the lesser of (i) the greater of (A) the
"prime rate" of interest, which is published in the "Money Rates" section of The
Wall Street Journal (any change in such rate of interest to be effective on the
date such change is so announced), plus 1%, and (B) the then applicable highest
rate of interest on the Certificates and (ii) the maximum rate that is
permissible under applicable usury or similar laws limiting interest rates. Any
interest at the Late Payment Rate shall be computed on the basis of a 360-day
year and the actual number of days elapsed in the related accrual period.
Latest Possible Maturity Date: The Distribution Date in August 2033.
LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Master Servicer has certified (in accordance with
Section 3.12) in the related Prepayment Period that it has received all amounts
it expects to receive in connection with such liquidation.
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Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of Mortgage Loans,
whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property,
less the sum of related unreimbursed Advances, Servicing Fees, Servicing
Advances and any proceeds of the liquidation of a Mortgage Loan recovered by the
Mortgage Pool Insurer in connection with a claim paid under the Mortgage Pool
Insurance Policy pursuant to the Mortgage Pool Insurer's subrogation rights
under the terms of the Mortgage Pool Insurance Policy.
Master Servicer: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors and assigns, in its capacity as master servicer
hereunder.
Master Servicer Advance Date: As to any Distribution Date, 1:00 p.m.
Pacific time on the Business Day immediately preceding such Distribution Date.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R)System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
MOM Loan: Any Mortgage Loan, as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc. and its successors.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on or first priority ownership interest, or creating a second lien on
or second priority ownership interest, as applicable, in an estate in fee simple
in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the Master Servicer to reflect the deletion of Deleted Mortgage
Loans and the addition of Replacement Mortgage Loans pursuant to the provisions
of this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this
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Agreement, attached hereto as Exhibit F-1, setting forth the following
information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Appraised Value;
(iii) the Mortgage Rate;
(iv) the maturity date;
(v) the original principal balance;
(vi) the Cut-off Date Principal Balance;
(vii) the first payment date of the Mortgage Loan;
(viii) the Scheduled Payment in effect as of the Cut-off Date;
(ix) the Combined Loan-to-Value Ratio, as applicable, at origination;
(x) a code indicating whether the residential dwelling at the time of
origination was represented to be owner-occupied;
(xi) a code indicating whether the residential dwelling is either (a)
a detached single family dwelling (b) a condominium unit or (c) a two- to
four-unit residential property; and
(xii) the Mortgage Pool Insurance Policy Premium Rate.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property. Any Mortgage Loan
subject to repurchase by the Seller or Master Servicer as provided in this
Agreement, shall continue to be a Mortgage Loan hereunder until the Purchase
Price with respect thereto has been paid to the Trustee.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgage Pool Insurance Policy: The mortgage loan insurance policy
(Policy No. R0085-01-7) issued by the Mortgage Pool Insurer with respect to the
Mortgage Loans.
Mortgage Pool Insurance Policy Premium: The initial premium payable on
the Mortgage Pool Insurance Policy on the Closing Date and the renewal premium
payable on the
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Mortgage Pool Insurance Policy on each Distribution Date as provided by the
Mortgage Pool Insurance Policy.
Mortgage Pool Insurance Policy Premium Rate: 0.45% per annum.
Mortgage Pool Insurer: Radian Insurance Inc., a Pennsylvania
corporation and stock insurance company.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligors on a Mortgage Note.
NAS Factor: For any Distribution Date set forth below, the percentage
set forth across from such Distribution Date:
Distribution Date Percentage
------------------------------- -----------------
May 2003--April 2006................................. 0%
May 2006--April 2008................................. 45%
May 2008--April 2009................................. 80%
May 2009--April 2010................................. 100%
May 2010 and thereafter.............................. 300%
NAS Principal Distribution Amount: For any Distribution Date, an
amount equal to the product of (i) a fraction, the numerator of which is the
Certificate Principal Balance of the Class A-5 Certificates and the denominator
of which is the Aggregate Class A Certificate Principal Balance, in each case
immediately prior to such Distribution Date, (ii) the Principal Distribution
Amount or the Class A Principal Distribution Amount, as applicable, for such
Distribution Date and (iii) the NAS Factor for such Distribution Date.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
Net Rate Cap: For any Distribution Date with respect to the
Certificates (other than the Class A-IO Certificates), a per annum rate
(adjusted, in the case of the Class A-1 Certificates, to an effective rate
reflecting the calculation of interest on the basis of the actual number of days
elapsed during the Accrual Period and a 360-day year) equal to (a) the weighted
average Adjusted Net Mortgage Rate on the Mortgage Loans in the Trust Fund,
minus (b) the Effective Insurer Support Reserve Fund Pass-Through Rate for such
Distribution Date.
Net Rate Carryover: With respect to any Distribution Date, an amount
equal to the sum of (i) the Class A-1 Interest Carryover Amount for such
Distribution Date (if any), (ii) the Class A-2 Interest Carryover Amount for
such Distribution Date (if any), (iii) the Class A-3 Interest Carryover Amount
for such Distribution Date (if any), (iv) the Class X-0 Xxxxxxxx
-00-
Xxxxxxxxx Xxxxxx for such Distribution Date (if any), (v) the Class A-5 Interest
Carryover Amount for such Distribution Date (if any), (vi) the Class A-R
Interest Carryover Amount for such Distribution Date (if any), (vii) the Class
M-1 Interest Carryover Amount for such Distribution Date (if any) and (viii) the
Class M-2 Interest Carryover Amount for such Distribution Date (if any),
provided that when the term Net Rate Carryover is used with respect to one Class
of Certificates (other than the Class A-IO Certificates), it shall mean such
carryover amount listed in clauses (i), (ii), (iii), (iv), (v), (vi), (vii) or
(viii) as applicable, with the same Class designation. The Class A-IO
Certificates shall not accrue any Net Rate Carryover.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not or, in the case of a current delinquency, would
not, be ultimately recoverable by the Master Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.
Notional Amount: With respect to the Class A-IO Certificates, the
Class A-IO Notional Amount.
Officer's Certificate: A certificate (i) in the case of the Depositor,
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, (ii) in the case of the
Master Servicer, signed by the President, an Executive Vice President, a Vice
President, an Assistant Vice President, the Treasurer, or one of the Assistant
Treasurers or Assistant Secretaries of Countrywide GP, Inc., its general partner
or (iii) if provided for in this Agreement, signed by a Servicing Officer, as
the case may be, and delivered to the Depositor, the Mortgage Pool Insurer and
the Trustee, as the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period for the Class A-1
Certificates, the rate determined by the Trustee on the related Interest
Determination Date on the basis of the rate for U.S. dollar deposits for one
month that appears on Telerate Screen Page 3750 as of 11:00 a.m. (London time)
on such Interest Determination Date; provided that the parties hereto
acknowledge that One-Month LIBOR calculated for the first Accrual Period shall
equal 1.31438% per annum. If such rate does not appear on such page (or such
other page as may replace that page on that service, or if such service is no
longer offered, such other service for displaying One-Month LIBOR or comparable
rates as may be reasonably selected by the Trustee), One-Month LIBOR for the
applicable Accrual Period will be the Reference Bank Rate. If no such quotations
can be obtained by the Trustee and no Reference Bank Rate is available,
One-Month LIBOR will be One-Month LIBOR applicable to the preceding Accrual
Period.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or 10.01,
or the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor and the Master Servicer, (ii) not
have any direct financial interest in the Depositor or the Master Servicer or in
any affiliate of either, and (iii) not be connected with the Depositor or the
Master Servicer as an
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officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Optional Termination: The termination of the Trust Fund provided
hereunder pursuant to the purchase of the Mortgage Loans pursuant to the last
sentence of Section 9.01 hereof.
Optional Termination Date: Any Distribution Date on which the Stated
Principal Balance of the Mortgage Loans is equal to or less than 10% of the sum
of the Stated Principal Balances of the Mortgage Loans as of the Cut-off Date.
Original Mortgage Loan: The mortgage loan refinanced in connection
with the origination of a Refinancing Mortgage Loan.
Original Value: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal satisfactory to the Master Servicer or the sales price of
such property or, in the case of a refinancing, on an appraisal satisfactory to
the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the subject
of a Principal Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.
Ownership Interest: As to any 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 the Class A-1 Certificates, the
Class A-1 Pass-Through Rate; with respect to the Class A-2 Certificates, the
Class A-2 Pass-Through Rate; with respect to the Class A-3 Certificates, the
Class A-3 Pass-Through Rate; with respect to the Class A-4 Certificates, the
Class A-4 Pass-Through Rate; with respect to the Class A-5 Certificates, the
Class A-5 Pass-Through Rate; with respect to the Class A-IO Certificates, the
Class A-IO Pass-Through Rate; with respect to the Class A-R Certificates, the
Class A-R Pass-Through Rate; with respect to the Class M-1 Certificates, the
Class M-1 Pass-Through Rate; and with respect to the Class M-2 Certificates, the
Class M-2 Pass-Through Rate.
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Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided beneficial
ownership interest in the Trust Fund evidenced by such Class which shall be
equal to the Certificate Principal Balance of such Class divided by the
Certificate Principal Balance of all Certificates of such Class; and
(ii) any Certificate, the Percentage Interest evidenced thereby of the
related Class shall equal the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of
all Certificates of such Class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the United
States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as each
Rating Agency has confirmed in writing will not result in the downgrading
or withdrawal of the ratings then assigned to the Certificates by such
Rating Agency;
(iii) [Reserved];
(iv) commercial or finance company paper which is then receiving the
highest commercial or finance company paper rating of each Rating Agency,
or such lower rating as each Rating Agency has confirmed in writing will
not result in the downgrading or withdrawal of the ratings then assigned to
the Certificates by such Rating Agency;
(v) 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 each
Rating Agency has confirmed in writing will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by such
Rating Agency;
(vi) repurchase obligations with respect to any security described in
clauses (i) and (ii) above, in either case entered into with a depository
institution or trust company (acting as principal) described in clause (v)
above;
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(vii) 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 long
term ratings of each Rating Agency (except (x) if the Rating Agency is
Moody's, such rating shall be the highest commercial paper rating of S&P
for any such securities) and (y), or such lower rating as each Rating
Agency has confirmed in writing will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by such Rating
Agency;
(viii) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable long term rating
by each Rating Agency or such lower rating as each Rating Agency has
confirmed in writing will not result in the downgrading or withdrawal of
the ratings then assigned to the Certificates by such Rating Agency;
(ix) 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 Rating Agency in their respective highest applicable rating
category or such lower rating as each Rating Agency has confirmed in
writing will not result in the downgrading or withdrawal of the ratings
then assigned to the Certificates by such Rating Agency; and
(x) such other relatively risk free investments having a specified
stated maturity and bearing interest or sold at a discount acceptable to
each Rating Agency as will not result in the downgrading or withdrawal of
the rating then assigned to the Certificates by any Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC (including, without limitation, any
amounts collected by the Master Servicer but not yet deposited in the
Certificate Account) may be invested in investments (other than money market
funds) treated as equity interests for Federal income tax purposes, unless the
Master Servicer and the Mortgage Pool Insurer shall receive an Opinion of
Counsel, at the expense of Master Servicer, to the effect that such investment
will not adversely affect the status of any such REMIC as a REMIC under the Code
or result in imposition of a tax on any such REMIC. Permitted Investments that
are subject to prepayment or call may not be purchased at a price in excess of
par.
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Permitted Transferee: Any person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel (a copy of which shall be provided to the Mortgage Pool
Insurer) that the Transfer of an Ownership Interest in a Class A-R Certificate
to such Person may cause the Trust Fund to fail to qualify as a REMIC at any
time that any 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.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date.
Prepayment Assumption: The applicable rate of prepayment, as described
in the Prospectus Supplement relating to the Certificates.
Prepayment Interest Excess: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment during the
period from the second day through the fifteenth day of the month of such
Distribution Date, any payment of interest received in connection therewith (net
of any applicable Servicing Fee) representing interest accrued for any portion
of such month of receipt.
Prepayment Interest Shortfall: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in
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full, or that became a Liquidated Loan during the period from the sixteenth day
of the month through the last day of the month preceding such Distribution Date,
or in the case of the first Distribution Date, from the Cut-off Date through and
including the last day of the month preceding such Distribution Date, (other
than a Principal Prepayment in full resulting from the purchase of a Mortgage
Loan pursuant to Section 2.02, 2.03, 2.04, 3.12 or 9.01 hereof), the amount, if
any, by which (i) one month's interest at the applicable Net Mortgage Rate on
the Stated Principal Balance of such Mortgage Loan immediately prior to such
prepayment (or liquidation) or in the case of a partial Principal Prepayment on
the amount of such prepayment (or liquidation proceeds) exceeds (ii) the amount
of interest paid or collected in connection with such Principal Prepayment or
such liquidation proceeds.
Prepayment Period: As to any Distribution Date, the time period
beginning with the opening of business on the sixteenth day of the calendar
month preceding the month in which such Distribution Date occurs (or, with
respect to the first Distribution Date, the period from the Cut-off Date) and
ending on the close of business on the fifteenth day of the month in which such
Distribution Date occurs.
Primary Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to the Net Rate Carryover for such
Distribution Date.
Principal Distribution Amount: With respect to each Distribution Date,
the Principal Funds for such Distribution Date.
Principal Funds: With respect to the Distribution Date occurring in
May 2003, the sum of (a) the Principal Remittance Amount for such Distribution
Date plus (c) the funds withdrawn from the Principal Reserve Fund and deposited
in the Distribution Account pursuant to Section 3.05(d). With respect to each
subsequent Distribution Date, the Principal Remittance Amount for such
Distribution Date.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 and 9.01 hereof)
that is received in advance of its scheduled Due Date and is not accompanied by
an amount as to interest 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 Master Servicer in accordance with
the terms of the related Mortgage Note.
Principal Remittance Amount: As to any Distribution Date, (a) the sum,
without duplication, of: (i) the scheduled principal collected during the
related Due Period or advanced on or before the related Master Servicer Advance
Date, (ii) prepayments collected in the related Prepayment Period, (iii) the
Stated Principal Balance of each Mortgage Loan that was repurchased by the
Seller or the Master Servicer with respect to such Distribution Date, as of the
date of such repurchase, (iv) the amount, if any, by which the aggregate unpaid
principal balance of any Replacement Mortgage Loans is less than the aggregate
unpaid principal balance of any Deleted Mortgage Loans delivered by the Seller
in connection with a substitution of a Mortgage Loan, and (v) all Liquidation
Proceeds collected during the related Due Period to the extent such
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Liquidation Proceeds related to principal; less (b) all non-recoverable Advances
relating to principal and certain expenses reimbursed during the related Due
Period.
Principal Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 3.05(d) in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-S1". Funds in the Principal Reserve Fund shall be held
in trust for the Certificateholders for the uses and purposes set forth in this
Agreement and shall not be a part of any REMIC created under this Agreement.
Prospectus Supplement: The Prospectus Supplement dated May 5, 2003, by
which the Certificates may be offered from time to time, and any supplements
thereto.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to be
(1) repurchased by the Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) repurchased by
the Depositor pursuant to Section 2.04 hereof, or (y) that the Master Servicer
has a right to purchase pursuant to Section 3.12 hereof, an amount equal to the
sum of (i) 100% of the unpaid principal balance (or, if such purchase or
repurchase, as the case may be, is effected by the Master Servicer, the Stated
Principal Balance) of the Mortgage Loan as of the date of such purchase, (ii)
accrued interest thereon at the applicable Mortgage Rate (or, if such purchase
or repurchase, as the case may be, is effected by the Master Servicer, at the
Net Mortgage Rate) from (a) the date through which interest was last paid by the
Mortgagor (or, if such purchase or repurchase, as the case may be, is effected
by the Master Servicer, the date through which interest was last advanced and
not reimbursed by the Master Servicer) to (b) the Due Date in the month in which
the Purchase Price is to be distributed to Certificateholders, and (iii) costs
and damages incurred by the Trust Fund in connection with a repurchase pursuant
to Section 2.03 hereof that arises out of a violation of any predatory or
abusive lending law with respect to the related Mortgage Loan.
Purchased Loan Proceeds: With respect to any Mortgage Loan which the
Mortgage Pool Insurer has purchased pursuant to Section 3.2 of the Mortgage Pool
Insurance Policy and Section 3.12(d) of this Agreement and as to which the
Default (as such term is defined in the Mortgage Pool Insurance Policy) or any
bankruptcy, foreclosure or other similar proceeding giving rise to the purchase
of such Mortgage Loan by the Mortgage Pool Insurer has been cured or
discontinued, any payment or other recovery of principal, interest or
unreimbursed Servicing Advances paid as part of the Insurer Purchase Price for
such Mortgage Loan which is received by the Mortgage Pool Insurer after payment
of such Insurer Purchase Price (including any such recovery received by the
Mortgage Pool Insurer in connection with any repurchase or sale of such Mortgage
Loan). With respect to any other Mortgage Loan which the Mortgage Pool Insurer
has purchased pursuant to Section 3.2 of the Mortgage Pool Insurance Policy and
Section 3.12(d) of this Agreement and which has become a Liquidated Loan (as
such term is defined in the Mortgage Pool Insurance Policy), the lesser of (i)
the Insurer Purchase Price paid by the Mortgage Pool Insurer for such Mortgage
Loan and (ii) all payments and other recoveries with respect to such Mortgage
Loan which are received by the Mortgage Pool Insurer after payment of the
related Insurer Purchase Price (including any such recoveries received by
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the Mortgage Pool Insurer in connection with any repurchase or sale of such
Mortgage Loan), net of any recoveries in respect of advances made by or on
behalf of the Mortgage Pool Insurer with respect to such Mortgage Loan (other
than recoveries of any unreimbursed Servicing Advances paid as part of the
Insurer Purchase Price for such Mortgage Loan).
Rating Agency: Moody's and S&P. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee and the Mortgage Pool Insurer. References herein to a given rating
category of a Rating Agency shall mean such rating category without giving
effect to any modifiers.
Realized Loss: With respect to each Liquidated Loan, an amount (not
less than zero or more than the Stated Principal Balance of the Mortgage Loan)
as of the date on which such loan became a Liquidated Loan, equal to (i) the
Stated Principal Balance of such Liquidated Loan as of the date on which such
loan became a Liquidated Loan, minus (ii) the Liquidation Proceeds, if any,
received in connection with the liquidation of such loan during the Due Period
in which such liquidation occurs, to the extent applied as recoveries of
principal of the Liquidated Loan. With respect to each Mortgage Loan that has
become the subject of a Deficient Valuation, (i) if the value of the related
Mortgaged Property was reduced below the principal balance of the related
Mortgage Note, the amount by which the value of the Mortgaged Property was
reduced below the principal balance of the related Mortgage Note, and (ii) if
the principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation plus any reduction in the
interest component of the Scheduled Payments. With respect to each Mortgage Loan
that has become the subject of a Debt Service Reduction and any Distribution
Date, the amount, if any, by which the related Scheduled Payment was reduced.
Record Date: With respect to the Class X-0, Xxxxx X-0, Class X-0,
Xxxxx X-0, Class M-1, Class M-2, Class A-IO Certificates and the Class A-R
Certificates and (x) the first Distribution Date, the Closing Date and (y) any
other Distribution Date, the last Business Day of the month preceding the month
of a Distribution Date. With respect to the Class A-1 Certificates, the Business
Day immediately preceding a Distribution Date, or if such Certificates are no
longer book-entry certificates, the last Business Day of the month preceding the
month of a Distribution Date.
Reference Bank Rate: With respect to any Accrual Period for the Class
A-1 Certificates, the arithmetic mean (rounded upwards, if necessary, to the
nearest whole multiple of 0.03125%) of the offered rates for United States
dollar deposits for one month that are quoted by the Reference Banks as of 11:00
a.m., New York City time, on the related Interest Determination Date to prime
banks in the London interbank market for a period of one month in amounts
approximately equal to the outstanding balance of the Class A-1 Certificates on
such Interest Determination Date, provided that at least two such Reference
Banks provide such rate. If fewer than two offered rates appear, the Reference
Bank Rate will be the arithmetic mean (rounded upwards, if necessary, to the
nearest whole multiple of 0.03125%) of the rates quoted by one or more major
banks in New York City, selected by the Trustee, as of 11:00 a.m., New York City
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time, on such date for loans in U.S. dollars to leading European banks for a
period of one month in amounts approximately equal to the outstanding balance of
the Class A-1 Certificates on such Interest Determination Date.
Reference Banks: Barclays Bank PLC, Deutsche Bank National Trust
Company and NatWest, N.A., provided that if any of the foregoing banks are not
suitable to serve as a Reference Bank, then any leading banks selected by the
Trustee which are engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, England, (ii) not controlling, under the control of or under common
control with the Depositor, the Seller, the Master Servicer, any successor
Master Servicer or any affiliate of any thereof and (iii) which have been
designated as such by the Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificate: Any Certificate other than a Class A-R
Certificate.
REO Property: A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit N, (i)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (ii)
have a Mortgage Rate not less than or no more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or higher credit
quality characteristics than that of the Deleted Mortgage Loan; (iv) at the time
of transfer to the Trustee, be accruing interest at a Mortgage Rate not more
than 1% per annum higher or lower than that of the Deleted Mortgage Loan; (v)
have a Combined Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (vi) have a remaining term to maturity no greater than (and not more than
one year less than) that of the Deleted Mortgage Loan; (vii) not permit
conversion of the Mortgage Rate from a fixed rate to a variable rate or visa
versa; (viii) provide for a prepayment charge on terms substantially similar to
those of the prepayment charge, if any, of the Deleted Mortgage Loan; (ix) have
the same lien priority as the Deleted Mortgage Loan; (x) constitute the same
occupancy type as the Deleted Mortgage Loan; (xi) be covered by the Mortgage
Pool Insurance Policy, and (xii) comply with each representation and warranty
set forth in Section 2.03 hereof.
Request for Release: The Request for Release submitted by the Master
Servicer to the Trustee, substantially in the form of Exhibits M and N, as
appropriate.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Required Insurer Support Reserve Fund Monthly Deposit: With respect to
any Distribution Date, an amount equal to the lesser of (a) the Interest Funds
for such Distribution
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Date and (b) an amount equal to the sum of (i) the Scheduled Insurer Support
Reserve Fund Monthly Deposit for such Distribution Date plus (ii) the Insurer
Support Reserve Fund Carryover Amount for such Distribution Date.
Required Percentage: With respect to any Distribution Date after the
Stepdown Date, is equal to the quotient of (x) the excess of (I) the aggregate
Stated Principal Balance of the Mortgage Loans for the preceding Distribution
Date over (II) the Certificate Principal Balance of the most senior Class of the
Certificates outstanding as of the preceding Master Servicer Advance Date (or
the Aggregate Class A Certificate Principal Balance if the Class A Certificates
are the most senior Certificates outstanding as of the preceding Master Servicer
Advance Date) and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for the preceding Distribution Date.
Responsible Officer: When used with respect to the Trustee or
Co-Trustee, as applicable, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, any Trust Officer or any other officer of
the Trustee or Co-Trustee, as applicable, customarily performing functions
similar to those performed by any of the above designated officers and also to
whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
Rolling Sixty-Day Deliquency Rate: With respect to any Distribution
Date, the average of the Sixty-Day Delinquency Rates for such Distribution Date
and the two immediately preceding Distribution Dates; provided, however, that
for the Distribution Date in May 2003, the Rolling Sixty-Day Deliquency Rate for
such Distribution Date shall equal the Sixty-Day Delinquency Rate for such
Distribution Date; provided further that for the Distribution Date in June 2003,
the Rolling Sixty-Day Deliquency Rate for such Distribution Date shall equal the
average of the Sixty-Day Delinquency Rates for such Distribution Date and the
immediately preceding Distribution Date.
Scheduled Insurer Support Reserve Fund Monthly Deposit: With respect
to any Distribution Date, the product of (a) $18,520,000 times (b) a fraction,
expressed as a percentage, the numerator of which is the Insurer Support Reserve
Fund Pass-Through Rate for such Distribution Date and the denominator of which
is 12.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage
Loan.
Secondary Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to the excess of (i) $10,000 over (ii) the
amount of funds on deposit in the Carryover Reserve Fund following the deposit
therein of the Primary Carryover Reserve Fund Deposit pursuant to Section
4.04(a) and following distributions therefrom pursuant to Section 4.04(c).
Seller: Countrywide Home Loans, Inc., a New York corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Seller Shortfall Interest Requirement: For the Master Servicer Advance
Date in May 2003, the product of:
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(a) the excess of the aggregate Stated Principal Balance of the
Mortgage Loans over the aggregate Stated Principal Balance of the Mortgage Loans
that have a scheduled payment of interest due in the related Due Period, and
(b) a fraction, the numerator of which is the weighted average Net
Mortgage Rate of the Mortgage Loans (weighted on the basis of the respective
Stated Principal Balances of the Mortgage Loans) as of the Cut-off Date and the
denominator of which is 12.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations hereunder, including, but not limited to, the cost of
(i) the preservation, restoration and protection of a Mortgaged Property, (ii)
any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan or, in the event of any payment of
interest that accompanies a Principal Prepayment in full made by the Mortgagor,
interest at the Servicing Fee Rate on the Stated Principal Balance of such
Mortgage Loan for the period covered by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
Sixty-Day Delinquency Rate: With respect to any Distribution Date, a
fraction, expressed as a percentage, the numerator of which is the aggregate
Stated Principal Balance for such Distribution Date of all Mortgage Loans 90 or
more days delinquent as of the close of business on the last day of the calendar
month preceding such Distribution Date (including Mortgage Loans in foreclosure
and REO Properties) and the denominator of which is the aggregate Stated
Principal Balance for such Distribution Date of all Mortgage Loans.
Sixty-Day Delinquency Trigger Event: A Sixty-Day Delinquency Trigger
Event shall have occurred and be continuing as of any Distribution Date if the
Rolling Sixty-Day Delinquency Rate for such Distribution Date exceeds 7.50%.
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc. and its successors.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, and (ii) as of any Distribution Date,
such Cut-off Date Principal Balance minus the sum of (a) the principal portion
of the Scheduled Payments (x) due with respect to such Mortgage Loan during each
Due Period ending prior to such Distribution Date and (y) that were received by
the Master Servicer as of the close of business on the Determination Date
related to such Distribution Date or with respect to which Advances were
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made as of the Master Servicer Advance Date related to such Distribution Date,
(b) all Principal Prepayments with respect to such Mortgage Loan received by the
Master Servicer during each Prepayment Period ending prior to such Distribution
Date, and (c) all Liquidation Proceeds collected with respect to such Mortgage
Loan during each Due Period ending prior to such Distribution Date, to the
extent applied by the Master Servicer as recoveries of principal in accordance
with Section 3.12. The Stated Principal Balance of any Mortgage Loan that
becomes a Liquidated Loan will be zero on the date on which such Mortgage Loan
becomes a Liquidated Loan. References herein to the Stated Principal Balance of
the Mortgage Loans at any time shall mean the aggregate Stated Principal
Balances of all Mortgage Loans in the Trust Fund as of such time.
Stepdown Date: The earlier to occur of (x) the first Distribution Date
on which the Aggregate Class A Certificate Principal Balance is reduced to zero
and (y) the later to occur of (i) the Distribution Date in May 2006 and (ii) the
first Distribution Date on which the Aggregate Class A Certificate Principal
Balance (after giving effect to the distributions of the Principal Distribution
Amount on the Class A Certificates on such Distribution Date) is less than or
equal to 81.00% of the aggregate Stated Principal Balances of the Mortgage Loans
for such Distribution Date.
Subordinate Certificates: The Class M-1 and Class M-2 Certificates.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(c).
Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(c), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.
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, this person shall be the
Trustee.
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.05.
Trailing Payment: With respect to any claim that is paid by the
Mortgage Pool Insurer in respect of a Realized Loss (as defined in the Mortgage
Pool Insurance Policy) on a Liquidated Loan in accordance with the Mortgage Pool
Insurance Policy, any payment or other recovery on such Mortgage Loan that is
received by the Mortgage Pool Insurer, the Trustee, the Co-Trustee or the Master
Servicer after such claim has been filed with the Mortgage Pool Insurer and that
is deposited in the Insurer Support Reserve Fund in accordance with the Mortgage
Pool Insurance Policy. For the avoidance of doubt, Trailing Payments do not
include Purchased Loan Proceeds.
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Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Trigger Event: A Trigger Event shall be in effect with respect to any
Distribution Date after the Stepdown Date if either a Delinquency Trigger Event
or a Cumulative Loss Trigger Event exists as of such Distribution Date.
Trigger Event Realized Loss: With respect to any Distribution Date
after the Stepdown Date and each Liquidated Loan, an amount (not less than zero
or more than the Stated Principal Balance of the Mortgage Loan) as of the date
on which such loan became a Liquidated Loan, equal to (i) the Stated Principal
Balance of such Liquidated Loan as of the date on which such loan became a
Liquidated Loan, minus (ii) the Liquidation Proceeds, if any, received in
connection with the liquidation of such loan on or at any time prior to the last
day of the related Due Period, to the extent applied as recoveries of principal
of the Liquidated Loan.
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto on and after the Cut-off Date to the extent not applied in
computing the Cut-off Date Principal Balance thereof, exclusive of interest not
required to be deposited in the Certificate Account pursuant to Section
3.05(b)(ii); (ii) the Certificate Account, the Distribution Account, the Insurer
Support Reserve Fund, the Carryover Reserve Fund and the Principal Reserve Fund,
and all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Insurance Policies (other than the Mortgage Pool Insurance
Policy) with respect to the Mortgage Loans; (v) the rights of the Co-Trustee,
for the benefit of the Certificateholders, under the Mortgage Pool Insurance
Policy; and (vi) all proceeds of the conversion, voluntary or involuntary, of
any of the foregoing into cash or other liquid property.
Trustee: The Bank of New York, a New York banking corporation, not in
its individual capacity, but solely in its capacity as trustee for the benefit
of the Certificateholders under this Agreement, and any successor thereto, and
any corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the Pool Stated Principal
Balance with respect to such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per annum
rate agreed upon in writing on or prior to the Closing Date by the Trustee and
the Depositor, which is .009% per annum.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.
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Voting Rights: The portion of the voting rights of all the
Certificates that is allocated to any Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated 95% to the Class X-0, Xxxxx X-0, Class A-3, Class A-4, Class
A-5, Class M-1 and Class M-2 Certificates, and 5% to the Class A-IO Certificates
and Class A-R Certificates; with the allocation among the Class A-1, Class A-2,
Class A-3, Class A-4, Class A-5, Class M-1 and Class M-2 Certificates to be in
proportion to the Certificate Principal Balance of each Class relative to the
Certificate Principal Balance of all other such Classes, and with the allocation
among the Class A-IO and Class A-R Certificates being one-half each. Voting
Rights will be allocated among the Certificates of each such Class in accordance
with their respective Percentage Interests.
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ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of the Seller in and to (i) the Mortgage Loans, including all interest
and principal received and receivable by the Seller on or with respect to the
Mortgage Loans after the Cut-off Date (to the extent not applied in computing
the Cut-off Date Principal Balance thereof) or deposited into the Certificate
Account by the Seller as a Certificate Account Deposit as provided in this
Agreement, other than principal due on the Mortgage Loans on or prior to the
Cut-off Date and interest accruing prior to the Cut-off Date and (ii) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid property. The Seller confirms that, concurrently with
the transfer and assignment, it has deposited into the Certificate Account the
Certificate Account Deposit.
Immediately upon the conveyance of the Mortgage Loans referred to in
the preceding paragraph, the Depositor hereby (i) sells, transfers, assigns,
sets over and otherwise conveys to the Trustee for benefit of the
Certificateholders, without recourse, all right title and interest of the
Depositor in and to (A) the Mortgage Loans, including all interest and principal
received and receivable by the Seller on or with respect to the Mortgage Loans
after the Cut-off Date (to the extent not applied in computing the Cut-off Date
Principal Balance thereof) or deposited into the Certificate Account by the
Seller as a Certificate Account Deposit as provided in this Agreement, other
than principal due on the Mortgage Loans on or prior to the Cut-off Date and
interest accruing prior to the Cut-off Date, (B) the mortgagee's rights under
the Insurance Policies (other than the Mortgage Pool Insurance Policy) with
respect to the Mortgage Loans, and (C) all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing into cash or other liquid property and
(ii) causes the Mortgage Pool Insurer to deliver the Mortgage Pool Insurance
Policy to the Co-Trustee and
(b) [Reserved].
(c) [Reserved]
(d) [Reserved].
(e) [Reserved].
(f) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered to, and deposited with, the Trustee (or, in
the case of the Delay Delivery Mortgage Loans, will deliver to, and deposit
with, the Trustee within the time periods specified in the definition of "Delay
Delivery Mortgage Loans") (except as provided in clause (vi) below) for the
benefit of the Certificateholders, the following documents or instruments with
respect to each such Mortgage Loan so assigned (with respect to each Mortgage
Loan, clause (i) through (vi) below, together, the "Mortgage File" for each such
Mortgage Loan):
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(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse, in the following form:
"Pay to the order of ________________ without recourse", with all
intervening endorsements that show a complete chain of endorsement from the
originator to the Seller, or, if the original Mortgage Note has been lost
or destroyed and not replaced, an original lost note affidavit from the
Seller, stating that the original Mortgage Note was lost or destroyed,
together with a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage, and in the case of each MERS Mortgage
Loan, the original Mortgage, noting the presence of the MIN of the Mortgage
Loan and language indicating that the Mortgage Loan is a MOM Loan if the
Mortgage Loan is a MOM Loan, with evidence of recording indicated thereon,
or a copy of the Mortgage certified by the public recording office in which
such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2003-S1 CWABS, Inc., by The Bank of New York, a New
York banking corporation, as trustee under the Pooling and Servicing
Agreement dated as of April 1, 2003, without recourse" (each such
assignment, when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage (noting the
presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or, in the
event such original title policy has not been received from the insurer,
such original or duplicate original lender's title policy and all riders
thereto shall be delivered within one year of the Closing Date.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at the Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has done
so) that such Mortgage Loans have been assigned by the Seller to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files (a) the code "[IDENTIFY
TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE FIELD NAME FOR TRUSTEE]"
which identifies the Trustee and (b) the code "[IDENTIFY SERIES SPECIFIC CODE
NUMBER]" in the field "Pool Field" which identifies the series of the
Certificates issued in connection with such Mortgage Loans. The Seller further
agrees that it will not, and will not permit the Master Servicer to, and the
Master Servicer agrees that it will not, alter the codes referenced in this
paragraph with respect to any Mortgage Loan during the term of
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this Agreement unless and until such Mortgage Loan is repurchased in accordance
with the terms of this Agreement.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv) concurrently with the execution and delivery hereof,
the Seller shall deliver or cause to be delivered to the Trustee a true copy of
such Mortgage and of each such undelivered interim assignment of the Mortgage
each certified by the Seller, the applicable title company, escrow agent or
attorney, or the originator of such Mortgage, as the case may be, to be a true
and complete copy of the original Mortgage or assignment of Mortgage submitted
for recording. For any such Mortgage Loan that is not a MERS Mortgage Loan the
Seller shall promptly deliver or cause to be delivered to the Trustee such
original Mortgage and such assignment or assignments with evidence of recording
indicated thereon upon receipt thereof from the public recording official, or a
copy thereof, certified, if appropriate, by the relevant recording office, but
in no event shall any such delivery be made later than 270 days following the
Closing Date; provided that in the event that by such date the Seller is unable
to deliver or cause to be delivered each such Mortgage and each interim
assignment by reason of the fact that any such documents have not been returned
by the appropriate recording office, or, in the case of each interim assignment,
because the related Mortgage has not been returned by the appropriate recording
office, the Seller shall deliver or cause to be delivered such documents to the
Trustee as promptly as possible upon receipt thereof. If the public recording
office in which a Mortgage or interim assignment thereof is recorded retains the
original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office, shall satisfy the Seller's obligations in
Section 2.01. If any document submitted for recording pursuant to this Agreement
is (x) lost prior to recording or rejected by the applicable recording office,
the Seller shall immediately prepare or cause to be prepared a substitute and
submit it for recording, and shall deliver copies and originals thereof in
accordance with the foregoing or (y) lost after recording, the Seller shall
deliver to the Trustee a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original recorded
document. The Seller shall promptly forward or cause to be forwarded to the
Trustee (x) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (y) any other documents
required to be delivered by the Depositor or the Master Servicer to the Trustee
within the time periods specified in this Section 2.01.
With respect to each Mortgage Loan other than a MERS Mortgage Loan as
to which the related Mortgaged Property and Mortgage File are located in (a) the
State of California or (b) any other jurisdiction under the laws of which the
recordation of the assignment specified in clause (iii) above is not necessary
to protect the Trustee's and the Certificateholders, interest in the related
Mortgage Loan, as evidenced by an Opinion of Counsel, delivered by the Seller to
the Trustee and a copy to the Rating Agencies and the Mortgage Pool Insurer, in
lieu of recording the assignment specified in clause (iii) above, the Seller may
deliver an unrecorded assignment in blank, in form otherwise suitable for
recording to the Trustee; provided that if the related Mortgage has not been
returned from the applicable public recording office, such assignment, or any
copy thereof, of the Mortgage may exclude the information to be provided by the
recording office. As to any Mortgage Loan other than a MERS Mortgage Loan, the
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procedures of the preceding sentence shall be applicable only so long as the
related Mortgage File is maintained in the possession of the Trustee in the
State or jurisdiction described in such sentence. In the event that with respect
to Mortgage Loans other than MERS Mortgage Loans (i) the Seller, the Depositor
or the Master Servicer gives written notice to the Trustee that recording is
required to protect the right, title and interest of the Trustee on behalf of
the Certificateholders in and to any Mortgage Loan, (ii) a court recharacterizes
the sale of the Mortgage Loans as a financing, or (iii) as a result of any
change in or amendment to the laws of the State or jurisdiction described in the
first sentence of this paragraph or any applicable political subdivision
thereof, or any change in official position regarding application or
interpretation of such laws, including a holding by a court of competent
jurisdiction, such recording is so required, the Trustee shall complete the
assignment in the manner specified in clause (iii) of the second paragraph of
this Section 2.01 and the Seller shall submit or cause to be submitted for
recording as specified above or, should the Seller fail to perform such
obligations, the Trustee shall cause the Master Servicer, at the Master
Servicer's expense, to cause each such previously unrecorded assignment to be
submitted for recording as specified above. In the event a Mortgage File is
released to the Master Servicer as a result of the Master Servicer's having
completed a Request for Release in the form of Exhibit M, the Trustee shall
complete the assignment of the related Mortgage in the manner specified in
clause (iii) of the second paragraph of this Section 2.01.
So long as the Trustee maintains an office in the State of California,
the Trustee shall maintain possession of and not remove or attempt to remove
from the State of California any of the Mortgage Files as to which the related
Mortgaged Property is located in such State. In the event that the Seller fails
to record an assignment of a Mortgage Loan as herein provided within 90 days of
notice of an event set forth in clause (i), (ii) or (iii) of the above
paragraph, the Master Servicer shall prepare and, if required hereunder, file
such assignments for recordation in the appropriate real property or other
records office. The Seller hereby appoints the Master Servicer (and any
successor servicer hereunder) as its attorney-in-fact with full power and
authority acting in its stead for the purpose of such preparation, execution and
filing.
In the case of Mortgage Loans that become the subject of a Principal
Prepayment between the Closing Date and the Cut-off Date, the Seller shall
deposit or cause to be deposited in the Certificate Account the amount required
to be deposited therein with respect to such payment pursuant to Section 3.05
hereof.
Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date, the Seller shall either (i) deliver to the
Trustee the Mortgage File as required pursuant to this Section 2.01 for each
Delay Delivery Mortgage Loan or (ii) (A) repurchase the Delay Delivery Mortgage
Loan or (B) substitute the Delay Delivery Mortgage Loan for a Replacement
Mortgage Loan, which repurchase or substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03, provided that if
the Seller fails to deliver a Mortgage File for any Delay Delivery Mortgage Loan
within the period provided in the prior sentence, the cure period provided for
in Section 2.02 or in Section 2.03 shall not apply to the initial delivery of
the Mortgage File for such Delay Delivery Mortgage Loan, but rather the Seller
shall have five (5) Business Days to cure such failure to deliver. The Seller
shall promptly provide each Rating Agency and the Mortgage Pool Insurer with
written notice of any cure, repurchase or substitution made pursuant to the
proviso of the preceding
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sentence. On or before the thirtieth (30th) day (or if such thirtieth day is not
a Business Day, the succeeding Business Day) after the Closing Date, the Trustee
shall, in accordance with the provisions of Section 2.02, send a Delay Delivery
Certification substantially in the form annexed hereto as Exhibit G-3 (with any
applicable exceptions noted thereon) for all Delay Delivery Mortgage Loan
delivered within thirty (30) days after such date. The Trustee will promptly
send a copy of such Delay Delivery Certification to each Rating Agency and the
Mortgage Pool Insurer.
Section 2.02 Acceptance by Trustee of the Mortgage Loans.
(a) The Trustee acknowledges receipt, subject to the limitations
contained in and any exceptions noted in the Initial Certification in the form
annexed hereto as Exhibit G-1 and in the list of exceptions attached thereto, of
the documents referred to in clauses (i) and (iii) of Section 2.01(g) above with
respect to the Mortgage Loans and all other assets included in the Trust Fund
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 included in the Trust Fund, in trust for the exclusive use and
benefit of all present and future Certificateholders.
The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Master Servicer, the Mortgage Pool Insurer and the Seller an
Initial Certification substantially in the form annexed hereto as Exhibit G-1 to
the effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), the
documents described in Section 2.01(g)(i) and, in the case of each Mortgage Loan
that is not a MERS Mortgage Loan, the documents described in Section
2.01(g)(iii), with respect to such Mortgage Loan are in the Trustee's
possession, and based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and relate to such
Mortgage Loan. The Trustee agrees to execute and deliver within 30 days after
the Closing Date to the Depositor, the Master Servicer, the Mortgage Pool
Insurer and the Seller an Interim Certification substantially in the form
annexed hereto as Exhibit G-2 to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as not
covered by such certification), all documents required to be delivered to the
Trustee pursuant to this Agreement with respect to such Mortgage Loan are in its
possession (except those described in Section 2.01(g)(vi)) and based on its
review and examination and only as to the foregoing documents, (i) such
documents appear regular on their face and relate to such Mortgage Loan, and
(ii) the information set forth in items (ii), (iii), (iv), (v), (vi), (viii) and
(ix) of the definition of the "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. On or before the thirtieth (30th)
day after the Closing Date (or if such thirtieth day is not a Business Day, the
succeeding Business Day), the Trustee shall deliver to the Depositor, the Master
Servicer, the Mortgage Pool Insurer and the Seller a Delay Delivery
Certification with respect to the Mortgage Loans substantially in the form
annexed hereto as Exhibit G-3, with any applicable exceptions noted thereon. The
Trustee shall be under no duty or obligation to inspect, review or examine such
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
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recorded in the real estate records or that they are other than what they
purport to be on their face.
Not later than 180 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer, the Mortgage Pool Insurer and the
Seller (and to any Certificateholder that so requests) a Final Certification
with respect to the Mortgage Loans substantially in the form annexed hereto as
Exhibit H, with any applicable exceptions noted thereon.
In connection with the Trustee's completion and delivery of such Final
Certification, the Trustee shall review each Mortgage File with respect to the
Mortgage Loans to determine that such Mortgage File contains the documents
identified in clauses (i) through (vi) of Section 2.01(f) with respect to such
Initial Mortgage Loans.
If, in the course of such review, the Trustee finds any document or
documents constituting a part of such Mortgage File that do not meet the
requirements of clauses (i)-(iv) and (vi) of Section 2.01(f), the Trustee shall
include such exceptions in such Final Certification (and the Trustee shall state
in such Final Certification whether any Mortgage File does not then include the
original or duplicate original lender's title policy or a printout of the
electronic equivalent and all riders thereto). If the public recording office in
which a Mortgage or assignment thereof is recorded retains the original of such
Mortgage or assignment, a copy of the original Mortgage or assignment so
retained, with evidence of recording thereon, certified to be true and complete
by such recording office, shall be deemed to satisfy the requirements of clause
(ii), (iii) or (iv) of Section 2.01(f), as applicable. The Seller shall promptly
correct or cure such defect referred to above within 90 days from the date it
was so notified of such defect and, if the Seller does not correct or cure such
defect within such period, the Seller shall either (A) if the time to cure such
defect expires prior to the end of the second anniversary of the Closing Date,
substitute for the related Mortgage Loan a Replacement Mortgage Loan, which
substitution shall be accomplished in the manner and subject to the conditions
set forth in Section 2.03, or (B) purchase such Mortgage Loan from the Trust
Fund within 90 days from the date the Seller was notified of such defect in
writing at the Purchase Price of such Mortgage Loan; provided that any such
substitution pursuant to (A) above or repurchase pursuant to (B) above shall not
be effected prior to the delivery to the Trustee and the Mortgage Pool Insurer
of the Opinion of Counsel required by Section 2.05 hereof 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 N. The
Seller shall within fourteen days following the Closing Date correct or cure
each exception listed on Exhibit Q hereto and, if the Seller does not correct or
cure such exception within such period, the Seller shall promptly substitute for
the related Mortgage Loan a Replacement Mortgage Loan, which substitution shall
be accomplished in the manner and subject to the conditions set forth in Section
2.03; provided that any such substitution shall not be effected prior to the
delivery to the Trustee of a Request for Release substantially in the form of
Exhibit N. In any case, no substitution will be made in any calendar month after
the Determination Date for such month. The Purchase Price for any such Mortgage
Loan shall be deposited by the Seller in the Certificate Account and, upon
receipt of such deposit and certification with respect thereto in the form of
Exhibit N hereto, the Trustee shall release the related Mortgage File to the
Seller and shall execute and deliver at the Seller's request such instruments of
transfer or assignment as the Seller has prepared, in each case without
recourse, as
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shall be necessary to vest in the Seller, or a designee, the Trustee's interest
in any Mortgage Loan released pursuant hereto. If pursuant to the foregoing
provisions the Seller repurchases a Mortgage Loan that is a MERS Mortgage Loan,
the Master Servicer shall cause MERS to execute and deliver an assignment of the
Mortgage in recordable form to transfer the Mortgage from MERS to the Seller and
shall cause such Mortgage to be removed from registration on the MERS(R) System
in accordance with MERS' rules and regulations.
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
Seller shall promptly deliver to the Trustee, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Mortgage File that come into the possession of the Seller from time to time.
It is understood and agreed that the obligation of the Seller to
substitute for or to purchase any Mortgage Loan that does not meet the
requirements of Section 2.02(a)(i) or (ii) above shall constitute the sole
remedy respecting such defect available to the Trustee, the Depositor, the
Mortgage Pool Insurer and any Certificateholder against the Seller.
(b) [Reserved].
Section 2.03 Representations, Warranties and Covenants of the Master
Servicer and the Seller.
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Mortgage Pool Insurer and the Trustee as follows, as of the date
hereof with respect to the Mortgage Loans:
(i) The Master Servicer is duly organized as a Texas limited
partnership and is validly existing and in good standing under the laws of
the State of Texas and is duly authorized and qualified to transact any and
all business contemplated by this Agreement to be conducted by the Master
Servicer in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan, to service the Mortgage Loans in accordance with the terms
of this Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(ii) The Master Servicer has the full partnership power and authority
to sell and service each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized by all necessary corporate action on
the part of the Master Servicer the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes a
legal, valid and binding obligation of the Master Servicer, enforceable
against the Master Servicer in accordance with its terms, except that (a)
the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific
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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.
(iii) The execution and delivery of this Agreement by the Master
Servicer, the servicing of the Mortgage Loans by the Master Servicer under
this Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance with
the terms hereof are in the ordinary course of business of the Master
Servicer and will not (A) result in a material breach of any term or
provision of the certificate of limited partnership, partnership agreement
or other organizational document of the Master 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 the Master 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 the Master Servicer of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master 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 the
Master Servicer's ability to perform or meet any of its obligations under
this Agreement.
(iv) The Master Servicer is an approved servicer of conventional
mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac and is a mortgagee approved by
the Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act.
(v) No litigation is pending or, to the best of the Master Servicer's
knowledge, threatened, against the Master Servicer that would materially
and adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Master Servicer to service the Mortgage
Loans or to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master Servicer
with, this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, the Master Servicer has obtained the same.
(vii) The Master Servicer is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans for as long as such
Mortgage Loans are registered with MERS.
(b) The Seller hereby represents and warrants to the Depositor, the
Mortgage Pool Insurer and the Trustee as follows, as of the Cut-off Date and as
to the Mortgage Loans (unless
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otherwise indicated or the context otherwise requires, percentages with respect
to the Mortgage Loans are measured by the Cut-off Date Principal Balance):
(i) The Seller is duly organized as a New York corporation and is
validly existing and in good standing under the laws of the State of New
York and is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Seller in any state
in which a Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to ensure its ability to enforce each Mortgage Loan, to sell the
Mortgage Loans in accordance with the terms of this Agreement and to
perform any of its other obligations under this Agreement in accordance
with the terms hereof.
(ii) The Seller has the full corporate power and authority to sell
each Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Seller the
execution, delivery and performance of this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except that
(a) the enforceability hereof 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.
(iii) The execution and delivery of this Agreement by the Seller, the
sale of the Mortgage Loans by the Seller under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in the ordinary course of business of the Seller and will not (A) result in
a material breach of any term or provision of the charter or by-laws of the
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 the 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 the Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Seller; and the 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 the Seller's ability to
perform or meet any of its obligations under this Agreement.
(iv) The Seller is an approved seller of conventional mortgage loans
for Xxxxxx Mae or Xxxxxxx Mac and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(v) No litigation is pending or, to the best of the Seller's
knowledge, threatened, against the Seller that would materially and
adversely affect the execution,
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delivery or enforceability of this Agreement or the ability of the Seller
to sell the Mortgage Loans or to perform any of its other obligations under
this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement or the consummation of the transactions contemplated hereby, or
if any such consent, approval, authorization or order is required, the
Seller has obtained the same.
(vii) The information set forth on Exhibit F-1 hereto with respect to
each Mortgage Loan is true and correct in all material respects as of the
Closing Date.
(viii) The Seller will treat the transfer of the Mortgage Loans to the
Depositor as a sale of the Mortgage Loans for all tax, accounting and
regulatory purposes.
(ix) None of the Mortgage Loans are more than 60 days delinquent in
payment of principal and interest.
(x) No Mortgage Loan had a Combined Loan-to-Value Ratio at origination
in excess of 100%.
(xi) Each Mortgage Loan is secured by a valid and enforceable second
lien on the related Mortgaged Property, subject only to (1) the lien of
non-delinquent current real property taxes and assessments, (2) 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 Mortgage Loan, (3) other matters to
which like properties are commonly subject that do not materially interfere
with the benefits of the security intended to be provided by such Mortgage
and (4) any senior mortgage loan secured by such Mortgaged Property and
identified in the Mortgage File related to such Mortgage Loan.
(xii) Immediately prior to the assignment of each Mortgage Loan to the
Depositor, the Seller had good title to, and was the sole owner of, such
Mortgage 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 this Agreement.
(xiii) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(xiv) There is no valid offset, claim, 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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(xv) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property that are or may be a lien prior
to, or equal with, the lien of such Mortgage, except those that are insured
against by the title insurance policy referred to in item (xix) below.
(xvi) As of the Closing Date, to the best of the Seller's knowledge,
each Mortgaged Property is free of material damage and is in good repair.
(xvii) To the best of the Seller's knowledge, each Mortgage Loan, at
the time it was originated, complied in all material respects with
applicable local, state and federal laws, including, but not limited to,
all applicable predatory and abusive lending laws.
(xviii) 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 Mortgage Loan may have been modified by a written instrument
that 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 delivered to the Trustee); satisfied, cancelled 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 (except as
expressly permitted above) or satisfaction with respect thereto.
(xix) 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
Mortgage Loan or a commitment (binder) to issue the same was effective on
the date of the origination of each Mortgage 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
Mortgaged Property is located and acceptable to Xxxxxx Mae or Xxxxxxx Mac
and is in a form acceptable to Xxxxxx Mae or Xxxxxxx Mac, which policy
insures the Seller and successor owners of indebtedness secured by the
insured Mortgage, as to the first priority lien, of the Mortgage subject to
the exceptions set forth in paragraph (iv) 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 that would impair the
coverage of such mortgage title insurance policy.
(xx) No Mortgage Loan was the subject of a Principal Prepayment in
full between the Closing Date and the Cut-off Date.
(xxi) To the best of the Seller's knowledge, all of the improvements
that were included for the purpose of determining the Appraised Value of
the Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon the Mortgaged Property.
(xxii) To the best of the Seller's knowledge, no improvement located
on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation.
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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 the 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 the
Mortgaged Property is lawfully occupied under applicable law.
(xxiii) The 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, 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. To the best of the Seller's knowledge, all parties
to the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have
been duly and properly executed by such parties.
(xxiv) The proceeds of the Mortgage Loan have been fully disbursed,
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvements and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making, or closing or recording
the Mortgage Loans were paid.
(xxv) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits
of the security, including, (i) in the case of a Mortgage designated as a
deed of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure.
(xxvi) 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.
(xxvii) Each Mortgage Note and each Mortgage is in substantially one
of the forms attached hereto as Exhibit P acceptable in form to Xxxxxx Mae
or Xxxxxxx Mac.
(xxviii) 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 the
Mortgage or the related Mortgage Note.
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(xxix) The origination, underwriting and collection practices used by
the Seller with respect to each Mortgage Loan have been in all respects
legal, prudent and customary in the mortgage lending and servicing
business.
(xxx) There is no pledged account or other security other than real
estate securing the Mortgagor's obligations.
(xxxi) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature.
(xxxii) Each Mortgage Loan contains a customary "due on sale" clause.
(xxxiii) Approximately 0.98% of the Mortgage Loans are secured by two-
to four-family dwellings. Approximately 6.33% of the Mortgage Loans are
secured by condominiums units. No less than approximately 61.81% of the
Mortgage Loans are secured by single family detached dwellings.
Approximately 30.88% of the Mortgage Loans are secured by PUDs.
(xxxiv) No Mortgage Loan had a principal balance in excess of $300,000
at origination.
(xxxv) [Reserved];
(xxxvi) Each Mortgage Loan was originated on or after July 8, 1997;
(xxxvii) [Reserved]
(xxxviii) [Reserved]
(xxxix) Approximately 5.31% of the Mortgage Loans provide for a
prepayment penalty.
(xl) [Reserved]
(xli) On the basis of representations made by the Mortgagors in their
loan applications, approximately 0.56% of the Mortgage Loans are secured by
investor properties, approximately 0.63% of the owner-occupied Mortgage
Loans are secured by owner-occupied Mortgaged Properties that are primary
residences and approximately 98.81% of the owner-occupied Mortgage Loans
are secured by owner-occupied Mortgaged Properties that are secondary
residences.
(xlii) At the Cut-off Date, the improvements upon each Mortgaged
Property are 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 the
Mortgaged Property is located in an amount that is at least equal to the
lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan or (ii) the greater of (a) the outstanding principal balance
of the Mortgage Loan and (b) an amount such that the proceeds of such
policy shall be
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sufficient to prevent the Mortgagor and/or the mortgagee from becoming a
co-insurer. If the Mortgaged Property is a condominium unit, it is included
under the coverage afforded by a blanket policy for the condominium unit.
All such individual insurance policies and all flood policies referred to
in item (xliv) 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.
(xliii) If the 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 is in effect 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
Mortgage Loan, (B) the minimum amount required to compensate for damage or
loss on a replacement cost basis, or (C) the maximum amount of insurance
that is available under the Flood Disaster Protection Act of 1973, as
amended.
(xliv) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation of
the Mortgaged Property.
(xlv) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material event that, 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 the
Mortgage or the related Mortgage Note; and the Seller has not waived any
default, breach, violation or event of acceleration.
(xlvi) Each Mortgaged Property is improved by a one- to four-family
residential dwelling, including condominium units and dwelling units in
PUDs. To the best of the Seller's knowledge, no improvement to a Mortgaged
Property includes a cooperative or a mobile home or constitutes other than
real property under state law.
(xlvii) Each Mortgage Loan is being serviced by the Master Servicer.
(xlviii) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the Mortgage,
and the secured principal amount, as consolidated, bears a single interest
rate and single repayment term reflected on the Mortgage Loan Schedule. The
consolidated principal amount does not exceed the original principal amount
of the Mortgage Loan. The Mortgage Note does not permit or obligate the
Master Servicer to make future advances to the Mortgagor at the option of
the Mortgagor.
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(xlix) All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents that
previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item that
remains unpaid and that has been assessed, but is not yet due and payable.
Except for (A) payments in the nature of escrow payments, and (B) interest
accruing from the date of the Mortgage Note or date of disbursement of the
Mortgage proceeds, whichever is later, to the day that precedes by one
month the Due Date of the first installment of principal and interest,
including without limitation, taxes and insurance payments, the Master
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 Mortgage.
(l) The Mortgage Loans originated by the Seller were underwritten in
all material respects in accordance with the Seller's underwriting
guidelines for closed-end second liens or, with respect to Mortgage Loans
purchased by the Seller, were underwritten in all material respects in
accordance with customary and prudent underwriting guidelines generally
used by originators of A quality mortgage loans.
(li) Prior to the approval of the Mortgage Loan application, an
appraisal of the related 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 the Mortgage Loan; such appraisal is in a form acceptable to
Xxxxxx Xxx and Xxxxxxx Mac.
(lii) None of the Mortgage Loans is a graduated payment mortgage loan
or a growing equity mortgage loan, and no Mortgage Loan is subject to a
buydown or similar arrangement.
(liii) The Mortgage Rates borne by the Mortgage Loans as of the
Cut-off Date ranged from 5.125% per annum to 14.000% per annum and the
weighted average Mortgage Rate as of the Cut-off Date was 8.370% per annum.
(liv) [Reserved]
(lv) The Mortgage Loans were selected from among the outstanding one-
to four-family mortgage loans in the Master Servicer's portfolio at the
Closing Date, as to which the representations and warranties made as to the
Mortgage Loans set forth in this Section 2.03(b) can be made. No selection
was made in a manner that would adversely affect the interests of
Certificateholders.
(lvi) [Reserved]
(lvii) Except for 459 Mortgage Loans representing approximately 3.27%
of the Mortgage Loans (by Stated Principal Balance as of the Cut-Off Date),
each Mortgage Loan has a payment date on or before the Due Date in the
month of the first Distribution Date.
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(lviii) The Mortgage Loans, individually and in the aggregate, conform
in all material respects to the descriptions thereof in the Prospectus
Supplement.
(lix) [Reserved]
(lx) There is no obligation on the part of the Seller under the terms
of the Mortgage or related Mortgage Note to make payments in addition to
those made by the Mortgagor.
(lxi) Any leasehold estate securing a Mortgage Loan has a term of not
less than five years in excess of the term of the related Mortgage Loan.
(lxii) None of the Mortgage Loans are "high cost" as defined by the
applicable predatory and abusive lending laws.
(lxiii) Each Mortgage Loan represents a "qualified mortgage" within
the meaning of Section 860(a)(3) of the Code (but without regard to the
rule in Treasury Regulation ss. 1.860G-2(f)(2) that treats a defective
obligation as a qualified mortgage, or any substantially similar successor
provision) and applicable Treasury regulations promulgated thereunder.
(lxiv) No Mortgage Loan was either a "consumer credit contract" or a
"purchase money loan" as such terms are defined in 16 C.F.R. Section 433.
(lxv) [Reserved].
(c) Upon discovery by any of the parties hereto or the Mortgage Pool
Insurer of a breach of a representation or warranty set forth in Section 2.03(a)
or (b) that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt notice thereof to the other parties. Each of the Master Servicer and
the Seller (each, a "Representing Party") hereby covenants with respect to the
representations and warranties set forth in Sections 2.03(a) and (b) that within
90 days of the earlier of the discovery by such Representing Party or receipt of
written notice by such Representing Party from any party or the Mortgage Pool
Insurer of a breach of any representation or warranty set forth herein made that
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, it shall cure such breach in all material respects and, if such
breach is not so cured, shall, (i) if such 90-day period expires prior to the
second anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted
Mortgage Loan") from the Trust Fund and substitute in its place a Replacement
Mortgage Loan, in the manner and subject to the conditions set forth in this
Section; or (ii) repurchase the affected Mortgage Loan or Mortgage Loans from
the Trustee at the Purchase Price in the manner set forth below; provided that
any such substitution pursuant to (i) above or repurchase pursuant to (ii) above
shall not be effected prior to the delivery to the Trustee and the Mortgage Pool
Insurer of the Opinion of Counsel required by Section 2.05 hereof 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 N. Any Representing Party liable for a breach under this Section 2.03
shall promptly reimburse the Master Servicer, the Mortgage Pool Insurer and the
Trustee for any expenses reasonably incurred by the Master Servicer, the
Mortgage Pool Insurer
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or the Trustee in respect of enforcing the remedies for such breach. To enable
the Master Servicer to amend the Mortgage Loan Schedule, any Representing Party
liable for a breach under this Section 2.03 shall, unless it cures such breach
in a timely fashion pursuant to this Section 2.03, promptly notify the Master
Servicer whether such Representing Party intends either to repurchase, or to
substitute for, the Mortgage Loan affected by such breach. With respect to the
representations and warranties described in this Section that are made to the
best of the Representing Party's knowledge, if it is discovered by any of the
Depositor, the Master Servicer, the Seller, the Mortgage Pool Insurer 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
Mortgage Loan, notwithstanding the Representing Party's lack of knowledge with
respect to the substance of such representation or warranty, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.
With respect to any Replacement Mortgage Loan or Loans, the Seller
delivering such Replacement Mortgage Loan shall deliver to the Trustee for the
benefit of the Certificateholders the related Mortgage Note, Mortgage and
assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to the
Distribution Date on which such proceeds are to be distributed shall not be part
of the Trust Fund and will be retained by the Seller delivering such Replacement
Loan on such Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Replacement Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such substitution, the Replacement Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the Seller delivering such
Replacement Mortgage Loan shall be deemed to have made with respect to such
Replacement Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Section 2.03(b) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall release
to the Representing Party the Mortgage File relating to such Deleted Mortgage
Loan and held for the benefit of the Certificateholders and shall execute and
deliver at the Master Servicer's direction such instruments of transfer or
assignment as have been prepared by the Master Servicer, in each case without
recourse, as shall be necessary to vest in the Seller, or its respective
designee, title to the Trustee's interest in any Deleted Mortgage Loan
substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of all such Deleted Mortgage
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Loans. An amount equal to the aggregate of the deficiencies described in the
preceding sentence (such amount, the "Substitution Adjustment Amount") shall be
forwarded by the Seller to the Master Servicer and deposited by the Master
Servicer into the Certificate Account not later than the Determination Date for
the Distribution Date relating to the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.05 on the Determination Date for the Distribution Date in the month
following the month during which such Seller became obligated to repurchase or
replace such Mortgage Loan and upon such deposit of the Purchase Price, the
delivery of the Opinion of Counsel required by Section 2.05, if any, and the
receipt of a Request for Release in the form of Exhibit N hereto, 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 Person's direction the related instruments of transfer or assignment
prepared by such Seller, in each case without recourse, as shall be necessary to
transfer title from the Trustee for the benefit of the Certificateholders and
transfer the Trustee's interest to such Seller to any Mortgage Loan purchased
pursuant to this Section 2.03. It is understood and agreed that the obligation
under this Agreement of the Seller to cure, repurchase or replace any Mortgage
Loan as to which a breach has occurred and is continuing shall constitute the
sole remedy against the Seller respecting such breach available to
Certificateholders, the Depositor, the Trustee, the Mortgage Pool Insurer or the
Co-Trustee.
(d) The representations and warranties set forth in Section 2.03
hereof shall survive delivery of the respective Mortgage Files to the Trustee
for the benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master Servicer,
the Mortgage Pool Insurer and the Trustee as follows, as of the date hereof:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has full power and authority (corporate and other) necessary to own or hold
its properties and to conduct its business as now conducted by it and to
enter into and perform its obligations under this Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and has duly authorized, by
all necessary corporate action on its part, the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, subject, as
to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and
(ii) general principles of equity, regardless of whether enforcement is
sought in a proceeding in equity or at law.
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(iii) The execution and delivery of this Agreement by the Depositor,
the consummation of the transactions contemplated by this Agreement, and
the fulfillment of or compliance with the terms hereof and thereof are in
the ordinary course of business of the Depositor and will not (A) result in
a material breach of any term or provision of the charter or by-laws of the
Depositor 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 the Depositor
is a party or by which it may be bound or (C) constitute a material
violation of any statute, order or regulation applicable to the Depositor
of any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Depositor; and the Depositor 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 the
Depositor's ability to perform or meet any of its obligations under this
Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Depositor to perform its obligations under
this Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement or the consummation of the transactions contemplated hereby, or
if any such consent, approval, authorization or order is required, the
Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the Closing Date and following the transfer
of the Mortgage Loans to it by the Seller, the Depositor had good title to the
Mortgage Loans, and the related Mortgage Notes were subject to no offsets,
claims, defenses or counterclaims.
It is understood and agreed that the representations and warranties
set forth in the two immediately preceding paragraphs shall survive delivery of
the Mortgage Files to the Trustee. Upon discovery by the Depositor, the Mortgage
Pool Insurer or the Trustee of a breach of any of the foregoing representations
and warranties set forth in the immediately preceding paragraph (referred to
herein as a "breach"), which breach materially and adversely affects the
interest of the Certificateholders, the party discovering such breach shall give
prompt written notice to the others and to each Rating Agency. The Depositor
hereby covenants with respect to the representations and warranties made by it
in this Section 2.04 that within 90 days of the earlier of the discovery it or
receipt of written notice by it from any party of a breach of any representation
or warranty set forth herein made that materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan, it shall cure such
breach in all material respects and, if such breach is not so cured, shall
repurchase or replace the affected Mortgage Loan or Loans in accordance with the
procedure set forth in Section 2.03(c).
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Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03 or
2.04 shall be made unless the Representing Party making such repurchase or
substitution delivers to the Trustee and the Mortgage Pool Insurer an Opinion of
Counsel, addressed to the Trustee, to the effect that such repurchase or
substitution would not (i) result in the imposition of the tax on "prohibited
transactions" of the Trust Fund or contributions after the Closing Date, as
defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding. Any Mortgage Loan as to which repurchase or
substitution was delayed pursuant to this paragraph shall be repurchased or the
substitution therefor shall occur (subject to compliance with Sections 2.02,
2.03 or 2.04) upon the earlier of (a) the occurrence of a default or imminent
default with respect to such loan and (b) receipt by the Trustee and the
Mortgage Pool Insurer of an Opinion of Counsel to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, the Seller, the Master Servicer,
the Mortgage Pool Insurer or the Trustee that any Mortgage 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 5 Business Days of discovery) give written notice thereof to the other
parties. In connection therewith, the Trustee shall require the Seller, at the
Seller's option, to either (i) substitute, if the conditions in Section 2.03(b)
with respect to substitutions are satisfied, a Replacement Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90
days of such discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty contained in Section 2.03. The Trustee
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto in
the same manner, and on the same terms and conditions, as it would a Mortgage
Loan repurchased for breach of a representation or warranty contained in Section
2.03.
Section 2.06 Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement to the best
of its ability, to the end that the interests of the Holders of the Certificates
may be adequately and effectively protected.
Section 2.07 Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor, the Mortgage
Pool Insurer and the Trustee as follows:
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(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any affiliate
of the Depositor, the Mortgage Pool Insurer or the Trustee and prepared by the
Master Servicer pursuant to this Agreement will contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
information, certificate, statement or report not misleading.
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ARTICLE III.
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with customary and usual
standards of practice of prudent mortgage loan lenders in the respective states
in which the Mortgaged Properties are located. In connection with such servicing
and administration, the Master Servicer shall have full power and authority,
acting alone and/or through subservicers as provided in Section 3.02 hereof,
subject to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds (other than proceeds of the Mortgage Pool Insurance Policy) and other
Liquidation Proceeds, and (iv) subject to Section 3.12(a), to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan; provided that the Master Servicer shall take no
action that is inconsistent with or prejudices the interests of the Trustee, the
Mortgage Pool Insurer or the Certificateholders in any Mortgage Loan or the
rights and interests of the Depositor and the Trustee under this Agreement and
the Mortgage Pool Insurer under the Insurance Agreement. The Master Servicer
shall represent and protect the interest of the Trustee and the Mortgage Pool
Insurer in the same manner as it currently protects its own interest in mortgage
loans in its own portfolio in any claim, proceeding or litigation regarding a
Mortgage Loan and shall not make or permit any modification, waiver or amendment
of any term of any Mortgage Loan which would change the Mortgage Rate thereon,
reduce or increase the principal balance thereof (except for reductions
resulting from actual payments of principal), extend the final maturity date
thereof by more than three months or cause any REMIC formed hereunder to fail to
qualify as a REMIC or result in the imposition of any tax under Section 860(a)
or 860(d) of the Code, but in any case not in any manner that is a lesser
standard than that provided in the first sentence of this Section 3.01. Without
limiting the generality of the foregoing, the Master 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 Master 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 Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Master Servicer
to service and administer the Mortgage Loans. Upon receipt of such documents,
the Depositor and/or the Trustee shall execute such documents and deliver them
to the Master Servicer. The Master Servicer further is authorized and empowered
by the Trustee, on behalf of the Certificateholders and the Trustee, in its own
name or in the name of the Subservicer, when the Master Servicer or the
Subservicer, as the case may be, believes it appropriate in its best judgment to
register any Mortgage Loan on the
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MERS(R) System, or cause the removal from the registration of any Mortgage Loan
on the MERS(R) System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns.
In accordance with the standards of the preceding paragraph, the
Master Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
The Master Servicer shall deliver a list of Servicing Officers to the
Trustee and the Mortgage Pool Insurer by the Closing Date.
Section 3.02 Subservicing; Enforcement of the Obligations of Master
Servicer.
(a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that such
subservicing arrangement and the terms of the related subservicing agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder and must be approved by
the Mortgage Pool Insurer. Notwithstanding the provisions of any subservicing
agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Master Servicer or a subservicer or reference to
actions taken through a Master Servicer or otherwise, the Master Servicer shall
remain obligated and liable to the Depositor, the Trustee, the Mortgage Pool
Insurer and the Certificateholders for the servicing and administration of the
Mortgage 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 Master
Servicer alone were servicing and administering the Mortgage Loans. Every
subservicing agreement entered into by the Master Servicer (a copy of which
shall be provided to the Mortgage Pool Insurer) shall contain a provision giving
the successor Master Servicer the option to terminate such agreement in the
event a successor Master Servicer is appointed. All actions of each subservicer
performed pursuant to the related subservicing agreement shall be performed as
an agent of the Master Servicer with the same force and effect as if performed
directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be
deemed to have received any collections, recoveries or payments with respect to
the Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Master Servicer.
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Section 3.03 Rights of the Depositor, the Seller and the Trustee in
Respect of the Master Servicer.
None of the Trustee, the Seller or the Depositor shall have any
responsibility or liability for any action or failure to act by the Master
Servicer, and none of them is obligated to supervise the performance of the
Master Servicer hereunder or otherwise.
Section 3.04 Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer
be the Master Servicer hereunder (including by reason of an Event of Default),
the Trustee or its designee shall thereupon assume all of the rights and
obligations of the Master Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of the Master Servicer pursuant to
Section 3.10 hereof or any acts or omissions of the predecessor Master Servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof,
(iv) responsible for expenses of the Master Servicer pursuant to Section 2.03 or
(v) deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.03 or the first paragraph of Section 6.02 hereof). If the
Master Servicer shall for any reason no longer be the Master Servicer (including
by reason of any Event of Default), the Trustee (or any other successor
servicer) may, at its option, succeed to any rights and obligations of the
Master Servicer under any subservicing agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor servicer) shall not
incur any liability or have any obligations in its capacity as servicer under a
subservicing agreement arising prior to the date of such succession unless it
expressly elects to succeed to the rights and obligations of the Master Servicer
thereunder; and the Master Servicer shall not thereby be relieved of any
liability or obligations under the subservicing agreement arising prior to the
date of such succession.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each subservicing agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
Section 3.05 Collection of Mortgage Loan Payments; Certificate
Account; Distribution Account; Seller Shortfall Interest
Requirement; Principal Reserve Fund; Insurer Support
Reserve Fund.
(a) The Master Servicer shall make reasonable efforts in accordance
with customary and usual standards of practice of prudent mortgage lenders in
the respective states in which the Mortgaged Properties are located to collect
all payments called for under the terms and provisions of the Mortgage 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 Master 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 Mortgage Loan and (ii) extend the due dates for payments due on
a Mortgage Note for a period not greater
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than 270 days. In the event of any such arrangement, the Master Servicer shall
make Advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. The Master Servicer shall
not be required to institute or join in litigation with respect to collection of
any payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) The Master Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit or cause to be deposited on
a daily basis within two Business Days of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted by
Subservicers or received by it in respect of Mortgage Loans subsequent to the
Cut-off Date (other than in respect of principal and interest due on the
Mortgage Loans before the Cut-off Date) and the following amounts (without
duplication) required to be deposited hereunder:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans net of
the related Servicing Fee permitted under Section 3.15, other than interest
accrued on the Mortgage Loans prior to the Cut-off Date, and the
Certificate Account Deposit;
(iii) all Insurance Proceeds (other than proceeds of the Mortgage Pool
Insurance Policy or Insurer Support Reserve Fund Applied Amounts);
(iv) all other Liquidation Proceeds, with the exception of proceeds to
be applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with the Master Servicer's normal
servicing procedures;
(v) all Compensating Interest;
(vi) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments;
(vii) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.10 hereof;
(viii) the Purchase Price and any Substitution Adjustment Amount;
(ix) all Advances made by the Master Servicer pursuant to Section
4.01; and
(x) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer into
the Certificate Account 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
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charges or assumption fees, if collected, need not be remitted by the Master
Servicer. In the event that the Master Servicer shall remit any amount not
required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, 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 institution maintaining the Certificate Account, that describes the
amounts deposited in error in the Certificate Account. The Master 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.
No later than 1:00 p.m. Pacific time on the Business Day prior to the
Master Servicer Advance Date in May 2003, the Seller shall remit to the Master
Servicer, and the Master Servicer shall deposit in the Certificate Account, the
Seller Shortfall Interest Requirement (if any) for such Master Servicer Advance
Date.
(c) The Trustee shall establish and maintain, on behalf 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 Master Servicer pursuant to
the second paragraph of Section 3.08(a);
(ii) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments;
(iii) any proceeds paid in respect of the Mortgage Loans pursuant to
the Mortgage Pool Insurance Policy; and
(iv) any Insurer Support Reserve Fund Applied Amounts required to be
applied by the Trustee pursuant to Section 3.05(g) of this Agreement.
The foregoing requirements for remittance by the Master Servicer and
deposit by the Trustee into the Distribution Account shall be exclusive. In the
event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, 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 a written notice to the Trustee that
describes the amounts deposited in error in the Distribution Account. All funds
deposited in the Distribution Account shall be held by the Trustee in trust for
the Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Distribution Account at the direction of the
Master Servicer.
(d) The Trustee shall establish and maintain, on behalf of the
Certificateholders, a Principal Reserve Fund in the name of the Trustee. On the
Closing Date, the Seller shall deposit into the Principal Reserve Fund
$1,715.37. The Principal Reserve Fund shall be treated as an "outside reserve
fund" under applicable Treasury regulations and shall not be part of any REMIC
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created under this Agreement. Amounts on deposit in the Principal Reserve Fund
shall not be invested.
On the Business Day before the Distribution Date occurring in May
2003, the Trustee shall transfer from the Principal Reserve Fund to the
Distribution Account the funds on deposit in the Principal Reserve Fund and
shall distribute such amount to the Certificates on the Distribution Date
pursuant to Section 4.04(d). The Trustee shall then terminate the Principal
Reserve Fund.
(e) Each institution that maintains the Certificate Account or the
Distribution Account shall invest the funds in each such account, as directed by
the Master Servicer, in Permitted Investments, which shall mature not later than
(x) in the case of the Certificate Account, the second Business Day next
preceding the related Distribution Account Deposit Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
Certificate Account, then such Permitted Investment shall mature not later than
the Business Day next preceding such Distribution Account Deposit Date) and (y)
in the case of the Distribution Account and the Carryover Reserve Fund the
Business Day immediately preceding the first Distribution Date that follows the
date of such investment (except that if such Permitted Investment is an
obligation of the institution that maintains such Distribution Account or the
Carryover Reserve Fund, then such Permitted Investment shall mature not later
than such Distribution Date), in each case, 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, except in connection
with Permitted Investments made with respect to funds in the Carryover Reserve
Fund which shall be made in the name of the Trustee, for the benefit of the
Certificateholders. In the case of (i) the Certificate Account and the
Distribution Account, all income and gain net of any losses realized from any
such investment shall be for the benefit of the Master Servicer as servicing
compensation and shall be remitted to it monthly as provided herein, and (ii)
the Carryover Reserve Fund, all income and gain net of any losses realized from
any such investment shall be for the benefit of the Class A-IO
Certificateholders and shall be remitted to the Class A-IO Certificateholders
monthly as provided herein. The amount of any losses incurred in the Certificate
Account or the Distribution Account in respect of any such investments shall be
deposited by the Master Servicer in the Certificate Account or paid to the
Trustee for deposit into the Distribution Account out of the Master Servicer's
own funds immediately as realized. Any losses incurred in the Carryover Reserve
Fund in respect of any such investments shall be charged against amounts on
deposit in the Carryover Reserve Fund (or such investments) immediately as
realized. The Trustee shall not be liable for the amount of any loss incurred in
respect of any investment or lack of investment of funds held in the Certificate
Account, the Distribution Account or the Carryover Reserve Fund and made in
accordance with this Section 3.05.
(f) The Master Servicer shall give at least 30 days advance notice to
the Trustee, the Seller, each Rating Agency, the Mortgage Pool Insurer and the
Depositor of any proposed change of location of the Certificate Account prior to
any change thereof. The Trustee shall give at least 30 days advance notice to
the Master Servicer, the Seller, each Rating Agency, the Mortgage Pool Insurer
and the Depositor of any proposed change of the location of the Distribution
Account, the Insurer Support Reserve Fund or the Carryover Reserve Fund prior to
any change thereof.
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(g) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Certificates, the
Insurer Support Reserve Fund. The Insurer Support Reserve Fund 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.
On each Distribution Date, pursuant to Section 4.04(a)(iv) hereof, the
Trustee shall withdraw from the Distribution Account and deposit into the
Insurer Support Reserve Fund the Required Insurer Support Reserve Fund Monthly
Deposit for such Distribution Date.
Promptly upon receipt by the Trustee of any Trailing Payments and, in
any event, within 24 hours of receipt of any such Trailing Payment, the Trustee
shall deposit any such Trailing Payments in the Insurer Support Reserve Fund;
provided, however, that the Master Servicer shall inform the Trustee of any
funds that constitute Trailing Payments.
If an Insurer Support Reserve Fund Application Event shall occur with
respect to any Distribution Date, then, on the date on which the Trustee shall
receive the related withdrawal instruction referenced in clause (c) of the
definition of "Insurer Support Reserve Fund Application Event", the Trustee
shall deposit the related Insurer Support Reserve Fund Applied Amount into the
Distribution Account; provided, however, that so long as an Insurer Default
shall have occurred and be continuing, the Master Servicer shall determine the
related Insurer Support Reserve Fund Applied Amount and shall direct the Trustee
to deposit such Insurer Support Reserve Fund Applied Amount into the
Distribution Account and the Trustee shall promptly (on a Business Day) provide
the Mortgage Pool Insurer with written notice thereof; provided further that,
unless the Mortgage Pool Insurer shall inform the Trustee in writing of its
disagreement with such determination no later than one Business Day following
receipt of such written notice, the Trustee shall deposit such related Insurer
Support Reserve Fund Applied Amount into the Distribution Account. Any Insurer
Support Reserve Fund Applied Amount shall be deemed to be among the Insurance
Proceeds for the next Distribution Date following the date of such deposit. The
Trustee shall allocate to the Interest Remittance Amount for such Distribution
Date the portion of such Insurer Support Reserve Fund Applied Amount that
relates to interest, and the Trustee shall allocate to the Principal Remittance
Amount for such Distribution Date the portion of such Insurer Support Reserve
Fund Applied Amount that relates to principal; provided that the Trustee shall
have received from the Mortgage Pool Insurer or the Master Servicer the
information necessary to make such allocations; provided further that the
Trustee shall use its reasonable best efforts to ascertain such information from
the Mortgage Pool Insurer and/or the Master Servicer.
If an Insurer Support Reserve Fund Reimbursement Event shall occur,
then, no later than the Business Day immediately following the occurrence of
such event, the Trustee shall withdraw from the Insurer Support Reserve Fund the
related Insurer Support Reserve Fund Reimbursement Amount and forward such
amount to the Mortgage Pool Insurer in immediately available funds.
Funds in the Insurer Support Reserve Fund shall be invested overnight
at the direction of the Master Servicer. Any earnings on such investments shall
be payable to the Master Servicer as additional servicing compensation, and on
each Distribution Date the Trustee
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shall withdraw such earnings from the Insurer Support Reserve Fund and remit
such earnings to the Master Servicer; provided that the amount of any losses
incurred in the Insurer Support Reserve Fund in respect of any such investments
shall be deposited by the Master Servicer in the Insurer Support Reserve Fund
out of the Master Servicer's own funds immediately as realized.
Upon termination of the Trust Fund and the payment in full of all
amounts owing to the Mortgage Pool Insurer hereunder and under the Insurance
Agreement, any amounts remaining in the Insurer Support Reserve Fund shall be
distributed to the Master Servicer as additional servicing compensation.
Section 3.06 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
To the extent required by the related Mortgage Note, the Master
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 Master Servicer) for the payment of taxes, assessments, hazard
insurance premiums or comparable items for the account of the Mortgagors.
Nothing herein shall require the Master Servicer to compel a Mortgagor to
establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Master 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 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be 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.
Section 3.07 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Master Servicer shall afford the Depositor, the Mortgage Pool
Insurer and the Trustee reasonable access to all records and documentation
regarding the Mortgage Loans and all accounts, insurance policies 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 offices
of the Master Servicer designated by it.
Upon reasonable advance notice in writing if required by federal
regulation, the Master Servicer will provide to the Mortgage Pool Insurer and
each Certificateholder and/or Certificate Owner that is a savings and loan
association, bank or insurance company certain reports and reasonable access to
information and documentation regarding the Mortgage Loans sufficient to permit
the Mortgage Pool Insurer and such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided that the Master Servicer shall be
entitled to be reimbursed by the Mortgage
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Pool Insurer and each such Certificateholder and/or Certificate Owner for actual
expenses incurred by the Master Servicer in providing such reports and access.
Section 3.08 Permitted Withdrawals from the Certificate Account,
Distribution Account and the Carryover Reserve Fund.
(a) The Master Servicer may from time to time make withdrawals from
the Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not previously paid
to or withheld by the Master Servicer), as servicing compensation in
accordance with Section 3.15, that portion of any payment of interest that
equals the Servicing Fee for the period with respect to which such interest
payment was made, and, as additional servicing compensation, those other
amounts set forth in Section 3.15;
(ii) to reimburse the Master Servicer for Advances made by it with
respect to the Mortgage Loans, such right of reimbursement pursuant to this
subclause (ii) being limited to amounts received on particular Mortgage
Loan(s) (including, for this purpose, Liquidation Proceeds other than
Trailing Payments, proceeds of the Mortgage Pool Insurance Policy or
Insurer Support Reserve Fund Applied Amounts) that represent late
recoveries of payments of principal and/or interest on such particular
Mortgage Loan(s) in respect of which any such Advance was made;
(iii) to pay the Co-Trustee, for payment to the Mortgage Pool Insurer
as provided below, the Mortgage Pool Insurance Policy Premium and any other
amounts payable to the Mortgage Pool Insurer under the Mortgage Pool
Insurance Policy;
(iv) to reimburse the Master Servicer for any Nonrecoverable Advance
previously made;
(v) to reimburse the Master Servicer from Insurance Proceeds (other
than proceeds of the Mortgage Pool Insurance Policy or Insurer Support
Reserve Fund Applied Amounts) for Insured Expenses covered by the related
Insurance Policy;
(vi) to pay the Master Servicer any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances, the Master Servicer's
right to reimbursement of Servicing Advances pursuant to this subclause
(vi) with respect to any Mortgage Loan being limited to amounts received on
particular Mortgage Loan(s) (including, for this purpose, Liquidation
Proceeds and purchase and repurchase proceeds) that represent late
recoveries of the payments for which such advances were made pursuant to
Section 3.01 or Section 3.06;
(vii) to pay to the Seller, the Depositor, the Mortgage Pool Insurer
or the Master Servicer, as applicable, with respect to each Mortgage Loan
or property acquired in respect thereof that has been purchased pursuant to
Section 2.02, 2.03 or 3.12, all amounts received thereon and not taken into
account in determining the related Stated Principal Balance of such
purchased Mortgage Loan;
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(viii) to reimburse the Seller, the Master Servicer or the Depositor
for expenses incurred by any of them in connection with the Mortgage Loans
or Certificates and reimbursable pursuant to Section 6.03 hereof provided
that such amount shall only be withdrawn following the withdrawal from the
Certificate Account for deposit into the Distribution Account pursuant to
the following paragraph;
(ix) to withdraw pursuant to Section 3.05 any amount deposited in the
Certificate Account and not required to be deposited therein; and
(x) to clear and terminate the Certificate Account upon termination of
this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 1:00 p.m. Pacific time on the Distribution
Account Deposit Date, the Master Servicer shall (x) withdraw from the
Certificate Account and remit to the Trustee the Interest Remittance Amount and
the Principal Remittance Amount for such Distribution Date to the extent on
deposit in the Certificate Account, and the Trustee shall deposit such amount in
the Distribution Account and (y) remit any Trailing Payments (but only to the
extent of amounts on deposit in the Certificate Account after payments pursuant
to clause (x) above and payments required to be made to the Co-Trustee in
accordance with Section 3.08(a)(iii) of this Agreement) received by the Master
Servicer during the related Due Period to the Trustee for deposit in the Insurer
Support Reserve Fund.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to subclauses (i), (ii), (v),
(vi) and (vii) above. Prior to making any withdrawal from the Certificate
Account pursuant to subclause (iv), the Master Servicer shall deliver to the
Trustee and the Mortgage Pool Insurer an Officer's Certificate of a Servicing
Officer indicating the amount of any previous Advance determined by the Master
Servicer to be a Nonrecoverable Advance and identifying the related Mortgage
Loan(s), and their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account for
distribution to the Certificateholders and deposits to the Insurer Support
Reserve Fund in the manner specified in this Agreement (and to withhold from the
amounts so withdrawn, the amount of any taxes that it is authorized to retain
pursuant to the third paragraph of Section 8.11). In addition, the Trustee may
from time to time make withdrawals from the Distribution Account for the
following purposes:
(i) to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds in or
credited to the Distribution Account;
(ii) to pay the Trustee the Trustee Fee on each Distribution Date;
(iii) to withdraw pursuant to Section 3.05 any amount deposited in the
Distribution Account and not required to be deposited therein; and
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(iv) to clear and terminate the Distribution Account upon termination
of the Agreement pursuant to Section 9.01 hereof.
(c) The Trustee shall withdraw funds from the Carryover Reserve Fund
for distribution to the Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the last paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Carryover Reserve Fund for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited in the
Carryover Reserve Fund and not required to be deposited therein; and
(ii) to clear and terminate the Carryover Reserve Fund upon
termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.09 The Mortgage Pool Insurance Policy.
The Master Servicer shall take whatever action is appropriate to
maximize the amounts payable under the Mortgage Pool Insurance Policy and to
service the Mortgage Loans in the manner required by the Mortgage Pool Insurance
Policy and the Insurance Agreement. The Master Servicer shall prepare and submit
all claims eligible for submission under the Mortgage Pool Insurance Policy and
shall perform all of the obligations of the insured under the Mortgage Pool
Insurance Policy other than those in Section 8.12 hereof to be performed by the
Co-Trustee.
The Master Servicer shall forward to the Co-Trustee for remittance to
the Mortgage Pool Insurer in immediately available funds on or before 12:00 noon
(Philadelphia time) on the Closing Date the initial premium due under the
Mortgage Pool Insurance Policy. The Master Servicer shall withdraw from the
Certificate Account and forward to the Co-Trustee for remittance to the Mortgage
Pool Insurer in immediately available funds (i) on or before 12:00 noon
(Philadelphia time) on each Distribution Date the Mortgage Pool Insurance Policy
Premium due on such Distribution Date and (ii) promptly when due, any other
amount owed to the Mortgage Pool Insurer under the Mortgage Pool Insurance
Policy and the Insurance Agreement.
Section 3.10 Maintenance of Hazard Insurance.
The Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance with extended coverage in an amount that is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
of such policy shall be sufficient to prevent the related Mortgagor and/or
mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Master Servicer shall also cause flood insurance
to be maintained on property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Master Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property
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or property thus acquired or amounts released to the Mortgagor in accordance
with the Master Servicer's normal servicing procedures) shall be deposited in
the Certificate Account. Any cost incurred by the Master Servicer in maintaining
any such 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 Mortgage Loan, notwithstanding
that the terms of the Mortgage Loan so permit. Such costs shall be recoverable
by the Master Servicer out of late payments by the related Mortgagor or out of
Liquidation Proceeds to the extent permitted by Section 3.08 hereof. 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 Mortgage Loan in
a federally designated special flood hazard area and such area is participating
in the national flood insurance program, the Master Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the lesser of (i) the original
principal balance of the related Mortgage Loan, (ii) the replacement value of
the improvements that are part of such Mortgaged Property, or (iii) the maximum
amount of such insurance available for the related Mortgaged Property under the
Flood Disaster Protection Act of 1973, as amended.
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, 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.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.11(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 Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(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 Master Servicer shall not be deemed to be in
default under this Section 3.11(a) by reason of any transfer or assumption that
the Master Servicer reasonably believes it is restricted by law from preventing.
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(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.11(a) hereof, 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 Mortgage Loan, the Master 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
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment and any other term affecting the amount or timing of payment on the
Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Master Servicer in accordance with
its underwriting standards as then in effect. The Master Servicer shall notify
the Trustee and the Mortgage Pool Insurer 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 Master Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer as additional
servicing compensation.
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination
of Excess Proceeds and Realized Losses; Repurchase of
Certain Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master 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
the requirements of the insurer under any Required Insurance Policy; provided
that the Master 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 Mortgage 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 pursuant to Section 3.08
hereof). The Master Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property, as contemplated in Section 3.08 hereof. If the
Master Servicer has knowledge that a Mortgaged Property that the Master 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
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risks known to the Master Servicer, the Master 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 the Trustee's 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
Master Servicer shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master 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
Master Servicer deems to be in the best interest of the Master Servicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Master 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 rental 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 Master Servicer shall perform the tax reporting and
withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as
soon as practicable in a manner that maximizes the Liquidation Proceeds, but in
no event later than three years after its acquisition by the Trust Fund or, at
the expense of the Trust Fund, the Master Servicer shall request, more than 60
days prior to the day on which such three-year period would otherwise expire, an
extension of the three-year grace period. In the event the Trustee and the
Mortgage Pool Insurer shall have been supplied with an Opinion of Counsel (such
opinion not to be an expense of the Trustee or the Mortgage Pool Insurer) to the
effect that the holding by the Trust Fund of such Mortgaged Property subsequent
to such three-year period will not result in the imposition of taxes on
"prohibited transactions" of the Trust Fund as defined in section 860F of the
Code or cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding, and the Trust Fund may continue to hold such
Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel) after the expiration of such three-year period. Notwithstanding any
other provision of this Agreement, no Mortgaged Property acquired by the Trust
Fund shall be rented (or allowed to continue to be rented) or otherwise used for
the production of income by or on behalf of the Trust Fund in such a manner or
pursuant to any terms that would (i) cause such Mortgaged Property to fail to
qualify as "foreclosure property" within the meaning of section 860G(a)(8) of
the Code or (ii) subject the Trust Fund 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 for prohibited transactions under Code Section
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860F(a)(2) or taxes for contributions after the startup day under Code Section
860G(d) or otherwise, unless the Master Servicer has agreed to indemnify and
hold harmless the Trust Fund with respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any Mortgaged
Properties acquired through foreclosure or other judicial proceeding, net of
reimbursement to the Master Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
unreimbursed Servicing Fees, Advances, Servicing Advances and any management fee
paid or to be paid with respect to the management of such Mortgaged Property,
shall be applied to the payment of principal of, and interest on, the related
defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans
were still current) and all such income shall be deemed, for all purposes in
this Agreement, to be payments on account of principal and interest on the
related Mortgage Notes and shall be deposited into the Certificate Account. To
the extent the income received during a Prepayment Period is in excess of the
amount attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan, such excess shall be considered to
be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Master Servicer as provided above, shall be deposited in
the Certificate Account on the next succeeding Determination Date following
receipt thereof for distribution on the related Distribution Date, except that
any Excess Proceeds shall be retained by the Master Servicer as additional
servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12; second,
to reimburse the Master Servicer for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest
(to the extent no Advance has been made for such amount) on the Mortgage Loan or
related REO Property, at the Net Mortgage Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Master Servicer shall determine
the respective aggregate amounts of Excess Proceeds and Realized Losses, if any,
in connection with the related Distribution Date.
(c) The Master Servicer, in its sole discretion, shall have the right
to elect (by written notice sent to the Trustee) to purchase for its own account
from the Trust Fund any Mortgage Loan that is 150 days or more delinquent at a
price equal to the Purchase Price; provided, however, that the Master Servicer
may only exercise this right on or before the last day of the calendar month in
which such Mortgage Loan became 150 days delinquent (such month, the "Eligible
Repurchase Month"); provided further, that any such Mortgage Loan which becomes
current but thereafter becomes delinquent may be purchased by the Master
Servicer
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pursuant to this Section in any ensuing Eligible Repurchase Month. The Purchase
Price for any Mortgage Loan purchased hereunder shall be delivered to the
Trustee for deposit in the Distribution Account and the Trustee, upon receipt of
such deposit and a Request for Release from the Master Servicer in the form of
Exhibit N hereto, shall release or cause to be released to the purchaser of such
Mortgage Loan the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the purchaser of such Mortgage
Loan, in each case without recourse, as shall be necessary to vest in the
purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and
the purchaser of such Mortgage Loan shall succeed to all the Trustee's right,
title and interest in and to such Mortgage Loan and all security and documents
related thereto. Such assignment shall be an assignment outright and not for
security. The purchaser of such Mortgage Loan shall thereupon own such Mortgage
Loan, and all security and documents, free of any further obligation to the
Trustee or the Certificateholders with respect thereto.
(d) The Mortgage Pool Insurer shall have the right but not the
obligation to elect (by written notice sent to the Trustee) to purchase for its
own account from the Trust Fund, any Mortgage Loan that is four months or more
in Default (as such term is defined in the Mortgage Pool Insurance Policy) or as
to which there are bankruptcy, foreclosure or other similar proceedings, at a
price equal to the Insurer Purchase Price for such Mortgage Loan; provided,
however, that the Mortgage Pool Insurer may notify the Co-Trustee (and the
Co-Trustee shall promptly notify the Trustee) at any time that it is exercising
such right but may pay the Insurer Purchase Price only on the last day of a
calendar month in accordance with the Mortgage Pool Insurance Policy. The
Insurer Purchase Price for any Mortgage Loan purchased hereunder shall be
delivered to the Trustee for deposit in the Distribution Account and the
Trustee, upon receipt of such deposit and a Request for Release from the
Mortgage Pool Insurer in the form of Exhibit N hereto, shall release or cause to
be released to the Mortgage Pool Insurer the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment prepared by the
Mortgage Pool Insurer, in each case without recourse, as shall be necessary to
vest in the Mortgage Pool Insurer any Mortgage Loan released pursuant hereto and
the Mortgage Pool Insurer shall succeed to all the Trustee's right, title and
interest in and to such Mortgage Loan and all security and documents related
thereto. Such assignment shall be an assignment outright and not for security.
The Mortgage Pool Insurer shall thereupon own such Mortgage Loan, and all
security and documents, free of any obligation to the Trustee or the
Certificateholders with respect thereto hereunder. With respect to a Mortgage
Loan purchased by the Mortgage Pool Insurer, any Liquidation Proceeds with
respect to such Mortgage Loan received by the Master Servicer, the Trustee or
the Co-Trustee after the date of such purchase shall be promptly delivered by
the Master Servicer, the Trustee, or the Co-Trustee, as applicable, to the
Mortgage Pool Insurer. Furthermore, upon any such liquidation of a Mortgage Loan
purchased by the Mortgage Pool Insurer, the Mortgage Pool Insurer will be
entitled to direct the Trustee to withdraw from the Insurer Support Reserve Fund
and pay to the Mortgage Pool Insurer the Realized Loss under the Mortgage Pool
Insurance Policy, subject to the terms of Section 3.05(g) of this Agreement. The
representations, warranties, covenants and related remedies with respect to a
Mortgage Loan made by the Seller to the Trustee pursuant to Sections 2.01(f),
2.02, 2.03(b) and 2.03(c) of this Agreement shall be assigned by the Trustee to
the Mortgage Pool Insurer in accordance with the Mortgage Pool Insurance Policy
and Section 2.02(q) of the Insurance Agreement upon the purchase of such
Mortgage Loan by the Mortgage Pool Insurer in accordance with this Section
3.12(d) of this Agreement; provided, however, that, in the event of
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an uncured breach of any representation, warranty or covenant, the substitution
of a Mortgage Loan shall not be available as a remedy and the Seller shall
repurchase such Mortgage Loan from the Mortgage Pool Insurer at the Insurer Sale
Price. The obligation under this Agreement of the Seller to cure or repurchase
such Mortgage Loan as to which such a breach has occurred and is continuing
shall constitute the sole remedy against the Seller respecting such breach
available to the Mortgage Pool Insurer.
(e) The Master Servicer may agree to a modification of any Mortgage
Loan (the "Modified Mortgage Loan") if (i) the modification is in lieu of a
refinancing and (ii) the Mortgage Rate on the Modified Mortgage Loan is
approximately a prevailing market rate for newly-originated mortgage loans
having similar terms and (iii) the Master Servicer purchases the Modified
Mortgage Loan from the Trust Fund as described below. Effective immediately
after the modification, and, in any event, on the same Business Day on which the
modification occurs, all interest of the Trustee in the Modified Mortgage Loan
shall automatically be deemed transferred and assigned to the Master Servicer
and all benefits and burdens of ownership thereof, including the right to
accrued interest thereon from the date of modification and the risk of default
thereon, shall pass to the Master Servicer. The Master Servicer shall promptly
deliver to the Trustee a certification of a Servicing Officer to the effect that
all requirements of this paragraph have been satisfied with respect to the
Modified Mortgage Loan. For federal income tax purposes, the Trustee shall
account for such purchase as a prepayment in full of the Modified Mortgage Loan.
The Master Servicer shall deposit the Purchase Price for any Modified
Mortgage Loan in the Certificate Account pursuant to Section 3.05 within one
Business Day after the purchase of the Modified Mortgage Loan. Upon receipt by
the Trustee of written notification of any such deposit signed by a Servicing
Officer, the Trustee shall release to the Master Servicer the related Mortgage
File and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, as shall be necessary to vest in the Master
Servicer any Modified Mortgage Loan previously transferred and assigned pursuant
hereto. The Master Servicer covenants and agrees to indemnify the Trust Fund
against any liability for any "prohibited transaction" taxes under Code Section
860F(a)(2) or taxes for contributions after the startup day under Code Section
860G(d) and any related interest, additions, and penalties imposed on the Trust
Fund established hereunder as a result of any modification of a Mortgage Loan
effected pursuant to this subsection (e), any holding of a Modified Mortgage
Loan by the Trust Fund or any purchase of a Modified Mortgage Loan by the Master
Servicer (but such obligation shall not prevent the Master Servicer or any other
appropriate Person from in good faith contesting any such tax in appropriate
proceedings and shall not prevent the Master Servicer from withholding payment
of such tax, if permitted by law, pending the outcome of such proceedings). The
Master Servicer shall have no right of reimbursement for any amount paid
pursuant to the foregoing indemnification, except to the extent that the amount
of any tax, interest, and penalties, together with interest thereon, is refunded
to the Trust Fund or the Master Servicer.
Section 3.13 Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such
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purposes, the Master Servicer will promptly notify the Trustee by delivering a
Request for Release substantially in the form of Exhibit N. Upon receipt of such
request, the Trustee shall promptly release the related Mortgage File to the
Master Servicer, and the Trustee shall at the Master Servicer's direction
execute and deliver to the Master Servicer the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage in each case provided by the Master Servicer, together
with the Mortgage Note with written evidence of cancellation thereon. The Master
Servicer is authorized to cause the removal from the registration on the MERS(R)
System of such Mortgage and to execute and deliver, on behalf of the Trust Fund
and the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation or of partial or full release. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Certificate Account, the Distribution Account, the
Carryover Reserve Fund or the related subservicing account. From time to time
and as shall be appropriate for the servicing or foreclosure of any Mortgage
Loan, including for such purpose, collection under any policy of flood insurance
any fidelity bond or errors or omissions policy, or for the purposes of
effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Trustee shall,
upon delivery to the Trustee of a Request for Release in the form of Exhibit M
signed by a Servicing Officer, release the Mortgage File to the Master Servicer.
Subject to the further limitations set forth below, the Master Servicer shall
cause the Mortgage File or documents so released to be returned to the Trustee
when the need therefor by the Master Servicer no longer exists, unless the
Mortgage Loan is liquidated and the proceeds thereof are deposited in the
Certificate Account, in which case the Trustee shall deliver the Request for
Release to the Master Servicer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Master Servicer shall deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for trustee's sale or
other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity. Notwithstanding the foregoing, the Master Servicer shall cause
possession of any Mortgage File or of the documents therein that shall have been
released by the Trustee to be returned to the Trustee within 21 calendar days
after possession thereof shall have been released by the Trustee unless (i) the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Certificate Account, and the Master
Servicer shall have delivered to the Trustee a Request for Release in the form
of Exhibit N or (ii) the Mortgage File or document shall have been delivered to
an attorney or to a public trustee or other public official as required by law
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property and the Master Servicer shall have
delivered to the Trustee an Officer's Certificate of a Servicing Officer
certifying as to the name and address of the Person to which the Mortgage File
or the documents therein were delivered and the purpose or purposes of such
delivery.
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Section 3.14 Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee (with a copy to the Mortgage Pool
Insurer) as required by this Agreement all documents and instruments in respect
of a Mortgage Loan coming into the possession of the Master Servicer from time
to time and shall account fully to the Trustee and the Mortgage Pool Insurer for
any funds received by the Master Servicer or that otherwise are collected by the
Master Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan. All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in the Certificate Account,
shall be held by the Master Servicer for and on behalf of the Trust Fund and
shall be and remain the sole and exclusive property of the Trust Fund, subject
to the applicable provisions of this Agreement. The Master 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 Carryover
Reserve Fund or in any Escrow Account (as defined in Section 3.06), 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 set off against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that the
Master Servicer shall be entitled to set off against and deduct from any such
funds any amounts that are properly due and payable to the Master Servicer under
this Agreement.
Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer
shall be entitled to retain or withdraw from the Certificate Account out of each
payment of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan for the period covered by such interest
payment.
Additional servicing compensation in the form of any Excess Proceeds,
prepayment penalties, assumption fees, late payment charges, Prepayment Interest
Excess, and all income and gain net of any losses realized from Permitted
Investments or from overnight investments of amounts on deposit in the Insurer
Support Reserve Fund shall be retained by the Master Servicer to the extent not
required to be deposited in the Certificate Account pursuant to Section 3.05 or
3.12(a) hereof. The Master Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder (including
payment of any premiums for hazard insurance, as required by Section 3.10 hereof
and maintenance of the other forms of insurance coverage required by Section
3.10 hereof) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.08 and 3.12 hereof.
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Section 3.16 Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of the Certificates and/or
Certificate Owners and the examiners and supervisory agents of the OTS, the FDIC
and such other authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC. Such access
shall be afforded without charge, but only upon reasonable and prior written
request and during normal business hours at the offices of the Master Servicer
designated by it. Nothing in this Section shall limit the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
Section 3.17 Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor, the Mortgage Pool
Insurer and the Trustee on or before the 80th day after the end of the Master
Servicer's fiscal year, commencing with its 2003 fiscal year, an Officer's
Certificate stating, as to the signer thereof, that (i) a review of the
activities of the Master Servicer during the preceding calendar year and of the
performance of the Master 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 Master Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof and (iii) to the best of such
officer's knowledge, each Subservicer has fulfilled all its obligations under
its Subservicing Agreement throughout such year, or, if there has been a default
in the fulfillment of any such obligation specifying each such default known to
such officer and the nature and status thereof. The Trustee shall forward a copy
of each such statement to each Rating Agency. Copies of such statement shall be
provided by the Trustee to any Certificateholder upon request at the Master
Servicer's expense, provided such statement is delivered by the Master Servicer
to the Trustee.
Section 3.18 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before the later of (i) the 80th day after the end of the Master
Servicer's fiscal year, commencing with its 2003 fiscal year or (ii) within 30
days of the issuance of the annual audited financial statements beginning with
the audit for the period ending in 2003, the Master Servicer at its expense
shall cause a nationally recognized firm of independent public accountants (who
may also render other services to the Master Servicer, the Seller or any
affiliate thereof) that is a member of the American Institute of Certified
Public Accountants to furnish a report to the Trustee, the Depositor, the
Mortgage Pool Insurer and the Seller in compliance with the Uniform Single
Attestation Program for Mortgage Bankers. Copies of such report shall be
provided by the Trustee to any Certificateholder upon request at the Master
Servicer's expense, provided such report is delivered by the Master Servicer to
the Trustee. Upon written request, the Master Servicer shall provide to the
Certificateholders its publicly available annual financial statements (or the
Master Servicer's parent company's publicly available annual financial
statements, as applicable), if any, promptly after they become available.
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ARTICLE IV.
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances.
Subject to the conditions of this Article IV, the Master Servicer, as
required below, shall make an Advance and deposit such Advance in the
Certificate Account. Each such Advance shall be remitted to the Certificate
Account no later than 1:00 p.m. Pacific time on the Master Servicer Advance Date
in immediately available funds. The Master Servicer shall be obligated to make
any such Advance only to the extent that such advance would not be a
Nonrecoverable Advance. If the Master Servicer shall have determined that it has
made a Nonrecoverable Advance or that a proposed Advance or a lesser portion of
such Advance would constitute a Nonrecoverable Advance, the Master Servicer
shall deliver (i) to the Trustee for the benefit of the Certificateholders funds
constituting the remaining portion of such Advance, if applicable, and (ii) to
the Depositor, each Rating Agency, the Mortgage Pool Insurer and the Trustee an
Officer's Certificate setting forth the basis for such determination.
In lieu of making all or a portion of such Advance from its own funds,
the Master Servicer may (i) cause to be made an appropriate entry in its records
relating to the Certificate Account that any Amount Held for Future
Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required to
be distributed pursuant to this Agreement. The Master 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 Mortgage Loan shall continue until such
Mortgage Loan is paid in full or the related Mortgaged Property or related REO
Property has been liquidated or until the purchase or repurchase thereof (or
substitution therefor) from the Trustee pursuant to any applicable provision of
this Agreement, except as otherwise provided in this Section 4.01.
Section 4.02 Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Master Servicer shall remit any related Compensating
Interest as part of the Interest Remittance Amount as provided in this
Agreement. The Master Servicer shall not be entitled to any recovery or
reimbursement for Compensating Interest from the Depositor, the Trustee, the
Seller, the Trust Fund, the Mortgage Pool Insurer or the Certificateholders.
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Section 4.03 [Reserved]
Section 4.04 Distributions.
(a) On each Distribution Date, the Interest Funds for such
Distribution Date shall be allocated by the Trustee from the Distribution
Account in the following order of priority:
(i) concurrently, to the Class X-0, Xxxxx X-0, Class A-3, Class A-4,
Class A-5 and Class A-IO Certificates, the Current Interest and any
Interest Carry Forward Amount for each such Class; provided, however, that
the Current Interest and any Interest Carry Forward Amount payable to the
Class A-IO Certificates shall be deposited in the Carryover Reserve Fund as
provided in Section 4.08 in an amount equal to the sum of the Primary
Carryover Reserve Fund Deposit and the Secondary Carryover Reserve Fund
Deposit, and any remaining amount shall be distributed to the Class A-IO
Certificates; and provided, further, that if the Interest Funds are not
sufficient to make a full distribution of the aggregate Current Interest
and the aggregate Interest Carry Forward Amount for each such Class of
Certificates, such Interest Funds will be distributed pro rata among each
such Class, based on the ratio of (x) the portion of the Current Interest
and the portion of any Interest Carry Forward Amount attributable to such
Class to (y) the portion of Current Interest and the portion of any
Interest Carry Forward Amount attributable to all such Classes;
(ii) to the Class M-1 Certificates, the Current Interest and any
Interest Carry Forward Amount for such Class;
(iii) to the Class M-2 Certificates, the Current Interest and any
Interest Carry Forward Amount for such Class;
(iv) to the Insurer Support Reserve Fund, the Required Insurer Support
Reserve Fund Monthly Deposit for such Distribution Date; and
(v) any remainder to the Class A-R Certificates.
(b) [Reserved]
(c) On each Distribution Date, after the deposit in the Carryover
Reserve Fund of the Primary Carryover Reserve Fund Deposit as provided in
Section 4.04(a)(i) above, and prior to the deposit in the Carryover Reserve Fund
of the Secondary Carryover Reserve Fund Deposit as provided in Section
4.04(a)(i) above, amounts on deposit in the Carryover Reserve Fund shall be
allocated by the Trustee to each Class of Certificates (other than the Class
A-IO Certificates) to the extent of any remaining Net Rate Carryover for such
Class of Certificates for such Distribution Date on a pro rata basis among all
such Classes (on the basis of the Net Rate Carryover for each such Class).
(d) On each Distribution Date, the Principal Distribution Amount for
such Distribution Date shall be allocated by the Trustee from the Distribution
Account in the following order of priority:
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(i) with respect to any Distribution Date prior to the Stepdown Date
or as to which a Trigger Event is in effect:
(A) to the Class A-R Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(B) to the Class A Certificates in the order and the priorities
set forth in Section 4.04(e) below;
(C) to the Class M-1 Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(D) to the Class M-2 Certificates, until the Certificate
Principal Balance thereof is reduced to zero; and
(E) any remainder to the Class A-R Certificates; and
(ii) with respect to each Distribution Date on and after the Stepdown
Date and as to which a Trigger Event is not in effect:
(A) to the Class A Certificates, the Class A Principal
Distribution Amount, in the order and the priorities set forth in
Section 4.04(e) below;
(B) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount, until the Certificate Principal Balance thereof
is reduced to zero;
(C) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount, until the Certificate Principal Balance thereof
is reduced to zero; and
(D) any remainder to the Class A-R Certificates.
(e) On each Distribution Date, the Principal Distribution Amount or
the Class A Principal Distribution Amount, as applicable, allocated under
Section 4.04(d) to the Class A Certificates is required to be further allocated
by the Trustee to the Class A Certificates in the following order and priority:
(i) to the Class A-5 Certificates, the NAS Principal Distribution
Amount, until the Certificate Principal Balance thereof has been reduced to
zero, and
(ii) sequentially, in the following order:
(A) to the Class A-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(B) to the Class A-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(C) to the Class A-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
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(D) to the Class A-4 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
(E) to the Class A-5 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
provided that, on any Distribution Date on or after the date on which the
Aggregate Class A Certificate Principal Balance (calculated for this purpose
after taking into account all distributions of principal on such Distribution
Date) is greater than the sum of the Stated Principal Balances as of such
Distribution Date of the Mortgage Loans, then the Principal Distribution Amount
or the Class A Principal Distribution Amount, as applicable, will be distributed
pro rata among each Class of Class A Certificates (in accordance with the
respective Certificate Principal Balances thereof) and not sequentially.
(f) To the extent that a Class of Certificates (other than the Class
A-IO Certificates) receives interest in excess of the Net Rate Cap other than
the amount of any Net Rate Carryover paid from amounts otherwise payable to the
Class A-IO Certificates as provided in this Agreement, such interest shall be
treated as having been paid to the Carryover Reserve Fund and then paid by the
Carryover Reserve Fund to such Certificateholders. Amounts deemed deposited to
the Carryover Reserve Fund pursuant to this clause shall be deemed to have been
distributed first to the Class A-IO Certificateholders for applicable tax
purposes.
(g) [Reserved]
(h) On each Distribution Date, the Trustee shall allocate the Applied
Realized Loss Amount to reduce the Certificate Principal Balances of the
Subordinate Certificates in the following order of priority:
(i) to the Class M-2 Certificates until the Class M-2 Certificate
Principal Balance is reduced to zero; and
(ii) to the Class M-1 Certificates until the Class M-1 Certificate
Principal Balance is reduced to zero.
Subject to Section 9.02 hereof respecting the final distribution, on
each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either 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 5 Business Days prior to the related Record Date
and (ii) such Holder shall hold Regular Certificates with aggregate principal
denominations of not less than $1,000,000 or evidencing a Percentage Interest
aggregating 10% or more with respect to such Class or, if not, by check mailed
by first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 9.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.
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On or before 5:00 p.m. Pacific time on the fifth Business Day
following each Determination Date (but in no event later than 5:00 p.m. Pacific
time on the third Business Day before the related Distribution Date), the Master
Servicer shall deliver a report to the Trustee in the form of a computer
readable magnetic tape (or by such other means as the Master Servicer and the
Trustee may agree from time to time) containing such data and information as
agreed to by the Master Servicer and the Trustee such as to permit the Trustee
to prepare the Monthly Statement to Certificateholders and the Mortgage Pool
Insurer and make the required distributions for the related Distribution Date
(the "Remittance Report"). The Trustee shall not be responsible to recompute,
recalculate or verify information provided to it by the Master Servicer and
shall be permitted to conclusively rely on any information provided to it by the
Master Servicer.
Section 4.05 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare
and cause to be forwarded by first class mail to each Holder of a Class of
Certificates of the Trust Fund, the Master Servicer, the Seller, the Depositor,
the Mortgage Pool Insurer and the Co-Trustee a statement setting forth for the
Certificates:
(i) the amount of the related distribution to Holders of each Class
allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein and (B) the aggregate of all
scheduled payments of principal included therein;
(ii) the amount of such distribution to Holders of each Class
allocable to interest;
(iii) any Interest Carry Forward Amount for each Class;
(iv) the Certificate Principal Balance of each Class after giving
effect to (i) all distributions allocable to principal on such Distribution
Date and (ii) the allocation of any Applied Realized Loss Amounts for such
Distribution Date;
(v) the aggregate of the Stated Principal Balance of the Mortgage
Loans for the Mortgage Pool;
(vi) the related amount of the Servicing Fees paid to or retained by
the Master Servicer for the related Due Period;
(vii) the Pass-Through Rate for each Class of Certificates with
respect to the current Accrual Period;
(viii) with respect to the May 2003 Distribution Date, the Seller
Shortfall Interest Requirement (if any) for the related Master Servicer
Advance Date;
(ix) the amount of Advances included in the distribution on such
Distribution Date;
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(x) the cumulative amount of Applied Realized Loss Amounts to date;
(xi) the number and aggregate principal amounts of Mortgage Loans: (A)
Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 30 to 59 days,
(2) 60 to 89 days and (3) 90 or more days, and (B) in foreclosure and
Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, in
each case as of the close of business on the last day of the calendar month
preceding such Distribution Date;
(xii) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan;
(xiii) and the aggregate Stated Principal Balances of any Mortgage
Loans converted to REO Properties as of the close of business on the
Determination Date preceding such Distribution Date;
(xiv) the aggregate Stated Principal Balances of all Liquidated Loans;
(xv) with respect to any Liquidated Loan, the loan number and Stated
Principal Balance relating thereto;
(xvi) whether a Trigger Event has occurred;
(xvii) any Net Rate Carryover paid on each Class of Certificates
(other than the Class A-IO Certificates) and any remaining Net Rate
Carryover remaining on each Class of Certificates (other than the Class
A-IO Certificates) on such Distribution Date; and
(xviii) the amount of proceeds received under the Mortgage Pool
Insurance Policy included in such distribution, the amount of any Insurer
Support Reserve Fund Applied Amounts, the amount on deposit in the Insurer
Support Reserve Fund on such Distribution Date (after giving effect to any
such deposits on such Distribution Date) and, to the extent that the
Trustee receives such information from the Master Servicer, the remaining
amount available under the Mortgage Pool Insurance Policy.
(b) The Trustee's responsibility for disbursing the above information
to the Certificateholders is limited to the availability, timeliness and
accuracy of the information derived from the Master Servicer. The Trustee will
send a copy of each statement provided pursuant to this Section 4.05 to each
Rating Agency. The Trustee may make the above information available to
Certificateholders via the Trustee's website at xxxx://xxx.xxxxxxxxxxxx.xxx.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(i), (a)(ii) and (a)(vi) of this Section
4.05 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.
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(d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class A-R Certificates the Form 1066 and each Form
1066Q and shall respond promptly to written requests made not more frequently
than quarterly by any Holder of Class A-R Certificates with respect to the
following matters:
(i) The original projected principal and interest cash flows on the
Closing Date on each related Class of regular and residual interests
created hereunder and on the Mortgage Loans, based on the Prepayment
Assumption;
(ii) The projected remaining principal and interest cash flows as of
the end of any calendar quarter with respect to each related Class of
regular and residual interests created hereunder and the Mortgage Loans,
based on the Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash
flows described above;
(iv) The original issue discount (or, in the case of the Mortgage
Loans, market discount) or premium accrued or amortized through the end of
such calendar quarter with respect to each related Class of regular or
residual interests created hereunder and to the Mortgage Loans, together
with each constant yield to maturity used in computing the same;
(v) The treatment of losses realized with respect to the Mortgage
Loans or the regular interests created hereunder, including the timing and
amount of any cancellation of indebtedness income of the related REMIC with
respect to such regular interests or bad debt deductions claimed with
respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of the related
REMIC; and
(vii) Any taxes (including penalties and interest) imposed on the
related REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure property" or
state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06 [Reserved]
Section 4.07 [Reserved]
Section 4.08 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Certificates, the
Carryover Reserve Fund. The Carryover Reserve Fund 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. On the Closing Date,
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the Seller shall remit $10,000 to the Trustee, who shall deposit said funds in
the Carryover Reserve Fund.
(b) The Trustee shall make withdrawals from the Carryover Reserve Fund
to make distributions pursuant to Section 4.04(c) hereof.
(c) Funds in the Carryover Reserve Fund may be invested in Permitted
Investments. Any earnings on such amounts shall be payable to the Class A-IO
Certificates. The Class A-IO Certificates shall evidence ownership of the
Carryover Reserve Fund for federal tax purposes and the Holders thereof
evidencing not less than 50% of the Voting Rights of such Class shall direct the
Trustee in writing as to the investment of amounts therein. In the absence of
such written direction, all funds in the Carryover Reserve Fund shall be
invested by the Trustee in The Bank of New York cash reserves.
(d) Upon termination of the Trust Fund, any amounts remaining in the
Carryover Reserve Fund shall be distributed to the Holders of the Class A-IO
Certificates in the same manner as if distributed pursuant to Section 4.04(f)
hereof.
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ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto
as Exhibits A-1 through A-8, D and E. The Certificates shall be issuable in
registered form, in the minimum dollar denominations, integral dollar multiples
in excess thereof and aggregate dollar denominations as set forth in the
following table:
Integral Original
Multiples Certificate
Minimum in Excess of Principal
Class Denomination Minimum Balance
--------------------------- --------------------------- -------------------------- -------------------------
A-1 $20,000 $1,000 $230,000,000
A-2 $20,000 $1,000 $61,400,000
A-3 $20,000 $1,000 $22,000,000
A-4 $20,000 $1,000 $8,600,000
A-5 $20,000 $1,000 $40,000,000
A-IO $20,000(1) $1,000(1) $400,000,000(1)
A-R $99.95(2) N/A $100
M-1 $20,000 $1,000 $23,000,000
M-2 $20,000 $1,000 $15,000,000
---------------------------
(1) Notional Amount.
(2) The Tax Matters Person Certificate may be issued in a denomination of $0.05.
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 authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Trustee by manual signature, and such certificate of authentication upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written 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 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to
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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 authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Certificates of the same Class and of like
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 that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of Transfer or exchange shall be accompanied by a written
instrument of Transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No Transfer of an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee (in the event such certificate is a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I), to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan or arrangement subject to
Section 4975 of the Code, or a Person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement, or (ii) in the
case of an ERISA-Restricted Certificate that has been the subject of an
ERISA-Qualifying Underwriting, if the purchaser is an insurance company, a
representation that the purchaser is an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60 or (iii) in the
case of any such ERISA-Restricted Certificate presented for registration in the
name of an employee benefit plan or arrangement 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, an opinion of counsel satisfactory to
the Trustee and the Master Servicer to the effect that the purchase or holding
of such ERISA-Restricted Certificate will not result in a non-exempt prohibited
transaction under ERISA or the Code and will not subject the Trustee or the
Master Servicer to any obligation in addition to those expressly undertaken in
this Agreement or to any liability, which opinion of counsel shall
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not be an expense of the Trustee or the Master Servicer. For purposes of clauses
(i) and (ii) of the preceding sentence, such representation shall be deemed to
have been made to the Trustee by the transferee's acceptance of an
ERISA-Restricted Certificate (or the acceptance by a Certificate Owner of the
beneficial interest in any such Class of ERISA-Restricted Certificates) that is
a Book-Entry Certificate unless the Trustee shall have received from the
transferee an alternative representation acceptable in form and substance to the
Master Servicer and the Depositor. Notwithstanding anything else to the contrary
herein, any purported transfer of an ERISA Restricted Certificate to or on
behalf of an employee benefit plan or arrangement subject to Section 406 of
ERISA or a plan subject to Section 4975 of the Code without the delivery to the
Trustee and the Master Servicer of an opinion of counsel satisfactory to the
Trustee and the Master Servicer as described above shall be void and of no
effect. 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 Trustee, with
respect to the transfer of such Classes of Certificates, required delivery of
such certificates and other documentation or evidence as are expressly required
by the terms of this Agreement and examined such certificates and other
documentation or evidence to determine compliance as to form with the express
requirements hereof. The Trustee shall be entitled, but not obligated, to
recover from any Holder of any ERISA-Restricted Certificate that was in fact an
employee benefit plan or arrangement subject to Section 406 of ERISA or a plan
or arrangement subject to Section 4975 of the Code or a Person acting on behalf
of any such plan or arrangement at the time it became a Holder or, at such
subsequent time as it became such a plan or arrangement or Person acting on
behalf of such a plan or arrangement, all payments made on such ERISA Restricted
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 Holder
of such Certificate that is not such a plan or arrangement or Person acting on
behalf of a plan or arrangement.
(c) Each Person who has or who acquires any Ownership Interest in a
Class A-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 A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a Class
A-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 A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Class A-R Certificate unless, 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 I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class A-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 A-R Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee,
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trustee or agent in connection with any Transfer of a Class A-R Certificate
and (C) not to Transfer its Ownership Interest in a Class A-R Certificate
or to cause the Transfer of an Ownership Interest in a Class A-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 A-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 A-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 A-R Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Class A-R
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit and Transferor Certificate.
The Trustee shall be entitled but not obligated to recover from any Holder
of a Class A-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 A-R
Certificate at and after either such time. Any such payments so recovered
by the Trustee shall be paid and delivered by the Trustee to the last
preceding Permitted Transferee of such Certificate.
(v) The Master Servicer 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 A-R Certificate to any
Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-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 Trustee, the Seller or the Master
Servicer to the effect that the elimination of such restrictions will not cause
the Trust Fund to fail to qualify as a REMIC at any time that the Certificates
are outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
ownership Interest in a Class A-R Certificate hereby consents to any amendment
of this Agreement that, 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 A-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 A-R Certificate that 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 shall not be an expense of the Trust
Fund, the Trustee, the Depositor, the Seller or the Master Servicer.
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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 of the ownership thereof and (b) there is delivered to
the Master 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, authenticate 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 in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Trustee under the terms of this Section 5.03
shall be canceled and destroyed by the Trustee in accordance with its standard
procedures without liability on its part.
Section 5.04 Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master 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 Master Servicer, the Trustee nor any agent of the Master 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 and/or Certificate Owners (a)
request such information in writing from the Trustee, (b) state that such
Certificateholders and/or Certificate Owners desire to communicate with other
Certificateholders and/or Certificate Owners with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders and/or Certificate Owners propose to
transmit or if the Depositor or Master Servicer shall request such information
in writing from the Trustee, then the Trustee shall, within ten Business Days
after the receipt of such request, provide the Depositor, the Master Servicer or
such Certificateholders and/or Certificate Owners at such recipients' expense
the most recent list of the Certificateholders and/or Certificate Owners of the
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder and/or Certificate Owner , 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
and/or Certificate Owners hereunder, regardless of the source from which such
information was derived.
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Section 5.06 Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate Owner
of such Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in Section
5.08. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to the Certificate Owners of such Certificates
pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor, the Seller, the Master Servicer and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of the
respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.
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Section 5.07 Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Trustee shall give all such
notices and communications to the Depository.
Section 5.08 Definitive Certificates.
If, after Book-Entry Certificates have been issued with
respect to any Certificates, (a) the Depositor advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor, at its sole option, advises the Trustee that it
elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of an Event
of Default, Certificate Owners of such Book-Entry Certificates having not less
than 51% of the Voting Rights evidenced by any Class of Book-Entry Certificates
advise the Trustee and the Depository in writing through the Depository
Participants that the continuation of a book-entry system with respect to
Certificates of such Class through the Depository (or its successor) is no
longer in the best interests of the Certificate Owners of such Class, then the
Trustee shall notify all Certificate Owners of such Certificates, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Class requesting the same.
The Depositor shall provide the Trustee with an adequate inventory of
certificates to facilitate the issuance and transfer of Definitive Certificates.
Upon surrender to the Trustee of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall authenticate and deliver such Definitive Certificates. Neither
the Depositor nor the Trustee shall be liable for any delay in delivery of such
instructions and each may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of such 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 such Definitive
Certificates as Certificateholders hereunder.
Section 5.09 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 offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust MBS Administration, as offices 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.
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ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01 Respective Liabilities of the Depositor, the Master
Servicer and the Seller.
The Depositor, the Master Servicer and the Seller 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, the Master
Servicer or the Seller.
The Depositor will keep in full effect its 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 its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of the
United States or under the laws of one of the states thereof and will obtain and
preserve its qualification or registration to do business as a foreign
partnership in each jurisdiction in which such qualification or registration is
or shall be necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.
Any Person into which the Depositor, the Master Servicer or the Seller
may be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, the Master Servicer or the Seller shall be
a party, or any person succeeding to the business of the Depositor, the Master
Servicer or the Seller, shall be the successor of the Depositor, the Master
Servicer or the Seller, 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 that the successor or
surviving Person to the Master Servicer shall be qualified to service mortgage
loans on behalf of, Xxxxxx Mae or Xxxxxxx Mac.
Section 6.03 Limitation on Liability of the Depositor, the Seller, the
Master Servicer and Others.
None of the Depositor, the Seller, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Master Servicer shall be under any liability to the Trustee (except as provided
in Section 8.05), the Trust Fund, the Mortgage Pool Insurer or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided that this provision shall not protect the Depositor, the Seller, the
Master Servicer or any such Person against any breach of representations or
warranties made by it herein or protect the Depositor,
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the Seller, the Master Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Seller, the Master Servicer
and any director, officer, employee or agent of the Depositor, the Seller or the
Master 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 Seller, the Master Servicer and any director,
officer, employee or agent of the Depositor, the Seller or the Master 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 Mortgage Loan or Mortgage 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 Seller or the Master 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 that in its opinion may
involve it in any expense or liability; provided that any of the Depositor, the
Seller or the Master 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 Seller and the Master
Servicer shall be entitled to be reimbursed therefor out of the Certificate
Account as provided by Section 3.08 hereof.
Section 6.04 Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee and the Mortgage Pool Insurer. No such
resignation shall become effective until the Trustee or a successor servicer to
such appointment shall have assumed the Master Servicer's responsibilities,
duties, liabilities and obligations hereunder.
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.
The Master 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 Xxxxxx Xxx or Xxxxxxx Mac for
persons performing servicing for mortgage loans purchased by Xxxxxx Mae or
Xxxxxxx Mac. In the event that any such policy or bond ceases to be in effect,
the Master Servicer shall use its reasonable best efforts to 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.
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ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit in the
Certificate Account or the Distribution Account or remit to the
Trustee any payment (excluding a payment required to be made under
Section 4.01 hereof) required to be made under the terms of this
Agreement, which failure shall continue unremedied for five calendar
days and, with respect to a payment required to be made under Section
4.01 hereof, for one calendar day, after the date on which written
notice of such failure shall have been given to the Master Servicer by
the Trustee or the Depositor, or to the Trustee and the Master
Servicer by the Holders of Certificates evidencing not less than 25%
of the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Master Servicer to observe or perform in
any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in this Agreement or any
representation or warranty shall prove to be untrue, which failure or
breach shall materially and adversely affect the interests of the
Certificateholders and shall continue unremedied for a period of 60
days after the date on which written notice of such failure shall have
been given to the Master Servicer by the Trustee or the Depositor, or
to the Trustee by the Holders of Certificates evidencing not less than
25% of the Voting Rights evidenced by the Certificates; provided that
the sixty-day cure period shall not apply to the initial delivery of
the Mortgage File for Delay Delivery Mortgage Loans nor the failure to
repurchase or substitute in lieu thereof; or
(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 proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the Master 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 Master Servicer or all or substantially all of the
property of the Master Servicer; or
(v) the Master 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;
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(vi) the Master Servicer shall fail to maintain a net worth of
$20,000,000 or more; or
(vii) the Master Servicer is no longer an approved servicer of
either Xxxxxxx Mac or Xxxxxx Xxx; or
(viii) a Sixty-Day Delinquency Trigger Event shall have occurred
and be continuing.
If an Event of Default 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, but only at the direction of the Mortgage Pool Insurer or Holders of
Certificates evidencing not less than 25% of the Voting Rights evidenced by the
Certificates, by notice in writing to the Master Servicer (with a copy to each
Rating Agency), terminate all of the rights and obligations of the Master
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, other than its rights as a Certificateholder hereunder. On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer hereunder, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee. The Trustee shall
thereupon make any Advance described in Section 4.01 hereof subject to Section
3.04 hereof. The Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Master Servicer to pay amounts owed pursuant to Article VIII. The Master
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Master 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 Mortgage Loans. The Trustee shall promptly notify the Rating
Agencies and the Mortgage Pool Insurer of the occurrence of an Event of Default.
Notwithstanding any termination of the activities of a Master Servicer
hereunder, such Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan that was due prior to the
notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
such Master Servicer would have been entitled pursuant to Sections 3.08(a)(i)
through (viii), and any other amounts payable to such Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.
Section 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master 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 Master Servicer by the terms and
provisions hereof
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and applicable law including the obligation to make advances pursuant to Section
4.01. As compensation therefor, the Trustee shall be entitled to all fees, costs
and expenses relating to the Mortgage Loans that the Master Servicer would have
been entitled to if the Master Servicer had continued to act hereunder.
Notwithstanding the foregoing, if the Trustee has become the successor to the
Master 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 Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder. Any successor Master Servicer shall be an
institution that is a Xxxxxx Mae and Xxxxxxx Mac approved seller/servicer in
good standing, that has a net worth of at least $15,000,000, that is approved by
the Mortgage Pool Insurer (such consent of the Mortgage Pool Insurer shall not
be unreasonably withheld) and that is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, that contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of the
Master Servicer (other than liabilities of the Master Servicer under Section
6.03 hereof incurred prior to termination of the Master Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement; and
provided further that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to the Master Servicer hereunder shall be effective
until the Trustee shall have consented thereto, and written notice of such
proposed appointment shall have been provided by the Trustee to the Mortgage
Pool Insurer and each Certificateholder. No successor to the Master Servicer
shall be appointed hereunder unless the appointment of such institution as
successor Master Servicer shall not materially adversely affect the coverage
under the Mortgage Pool Insurance Policy. The Trustee shall not resign as
servicer until a successor servicer has been appointed and has accepted such
appointment. Pending appointment of a successor to the Master 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
Mortgage Loans as it and such successor shall agree; provided that no such
compensation shall be in excess of that permitted the Master 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 Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as servicer shall give notice to
the Mortgagors of such change of servicer and shall, during the term of its
service as servicer, continue to service the Mortgage Loans for the benefit of
the Certificateholders and maintain in force the policy or policies that the
Master Servicer is required to maintain pursuant to Section 6.05.
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In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the successor
Master Servicer in causing MERS to execute and deliver an assignment of Mortgage
in recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS(R) System to the successor Master
Servicer. The predecessor Master Servicer shall file or cause to be filed any
such assignment in the appropriate recording office. The successor Master
Servicer shall cause such assignment to be delivered to the Trustee or the
Custodian promptly upon receipt of the original with evidence of recording
thereon or a copy certified by the public recording office in which such
assignment was recorded.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Mortgage Pool Insurer and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and the Mortgage Pool
Insurer notice of each such Event of Default hereunder known to the Trustee,
unless such Event of Default shall have been cured or waived.
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ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee (or the Co-Trustee, to the extent provided in this Agreement)
that are specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether they conform to the
requirements of this Agreement, to the extent provided in this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:
(i) prior to the occurrence of an Event of Default, and after the curing of
all such Events of Default that may have occurred, the duties and obligations of
the Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable, individually or as Trustee, 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 that it reasonably believed in good faith to be
genuine and to have been duly executed by the proper authorities respecting any
matters arising hereunder;
(ii) the Trustee shall not be liable, individually or as Trustee, for an
error of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless the Trustee was grossly negligent or acted in
bad faith or with willful misfeasance; and
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(iii) the Trustee shall not be liable, individually or as Trustee,
with respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of the Mortgage Pool Insurer or
Holders of each Class of Certificates evidencing not less than 25% of the
Voting Rights of such Class 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.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel 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, individually or as Trustee, 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) prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default that may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by the Mortgage
Pool Insurer or Holders of each Class of Certificates evidencing not less
than 25% of the Voting Rights of such Class;
(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 or attorneys;
(vi) the Trustee shall not be required to expend its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such liability is not
assured to it;
(vii) the Trustee shall not be liable, individually or as Trustee, 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 deemed to have knowledge of an Event
of Default until a Responsible Officer of the Trustee shall have received
written notice thereof; and
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(ix) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders or the Mortgage Pool Insurer,
pursuant to the provisions of this Agreement, unless such
Certificateholders or the Mortgage Pool Insurer, as applicable, shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that may be incurred therein or thereby.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
Section 8.03 Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the Master Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of any Mortgage Loan or related
document or of MERS or the MERS(R) System other than with respect to the
Trustee's execution and authentication of the Certificates. The Trustee shall
not be accountable for the use or application by the Depositor or the Master
Servicer of any funds paid to the Depositor or the Master Servicer in respect of
the Mortgage Loans or deposited in or withdrawn from the Certificate Account by
the Depositor or the Master Servicer.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must engage
persons not regularly in its employ to perform acts or services on behalf of the
Trust Fund, which acts or services are not in the ordinary course of the duties
of a trustee, paying agent or certificate registrar, in the absence of a breach
or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons, except any such expense, disbursement or advance
as may arise from its negligence, bad faith or willful misconduct). The Trustee
and any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless against any loss, liability or expense
(i) incurred in connection with any legal action relating to
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this Agreement or the Certificates, or in connection with the performance of any
of the Trustee's duties hereunder, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of any of the Trustee's duties hereunder or by reason of reckless
disregard of the Trustee's obligations and duties hereunder and (ii) resulting
from any error in any tax or information return prepared by the Master Servicer.
Such indemnity shall survive the termination of this Agreement or the
resignation or removal of the Trustee hereunder.
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 that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (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 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 corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Seller and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master 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 (1) giving written notice of resignation to the Depositor, the
Mortgage Pool Insurer and the Master Servicer and by mailing notice of
resignation by first class mail, postage prepaid, to the Certificateholders at
their addresses appearing on the Certificate Register 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 (2) acceptance of
appointment by a successor trustee in accordance with Section 8.08 and meeting
the qualifications set forth in Section 8.06. If no successor trustee 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 (i) 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, (ii) 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
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rehabilitation, conservation or liquidation, or (iii)(A) a tax is imposed with
respect to the Trust Fund by any state in which the Trustee or the Trust Fund is
located, (B) the imposition of such tax would be avoided by the appointment of a
different trustee and (C) the Trustee fails to indemnify the Trust Fund against
such tax, then the Depositor, the Master Servicer or the Mortgage Pool Insurer
may remove the Trustee and appoint a successor trustee acceptable to the
Mortgage Pool Insurer 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 Master Servicer and one copy of which shall be delivered to the
successor trustee.
The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by the
Mortgage Pool Insurer or such Holders, as applicable, or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered by the
successor Trustee to the Master 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, its predecessor
trustee, the Mortgage Pool Insurer and the Master 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.
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 the Mortgage Pool Insurer and all Holders of Certificates.
If the Depositor fails to mail such notice within ten 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 substantially all of the corporate trust business of
the Trustee, shall be the successor of the
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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 Master 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 and the Mortgage Pool Insurer 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 Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer and the
Mortgage Pool Insurer 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. The Master
Servicer shall be responsible for the fees of any co-trustee or separate trustee
appointed hereunder.
Notwithstanding any provision of this Section 8.10 to the contrary,
the Co-Trustee appointed pursuant to Section 8.12(a) shall have no duties and
obligations hereunder other than those described in Section 8.12.
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) 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 Master Servicer, shall be
conferred or imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee (other than the Co-Trustee) jointly (it
being understood that such separate trustee or co-trustee other than the
Co-Trustee is not authorized to act separately without the Trustee joining
in such act), except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the holding of
title to the Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee (other than the Co-Trustee), but solely at the direction of the
Trustee;
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(ii) No trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Except with respect to the Co-Trustee, any notice, request or other
writing given to the Trustee shall be deemed to have been given to each of the
then separate trustees and co-trustees, as effectively as if given to each of
them. Every instrument appointing any separate trustee or co-trustee shall refer
to this Agreement and the conditions of this Article 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 Master Servicer, the Mortgage Pool
Insurer and the Depositor.
Any separate trustee or co-trustee (other than the 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 Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that the Upper Tier REMIC and
the Lower Tier REMIC qualify as, a "real estate mortgage investment conduit" as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Trustee covenants and agrees that it shall act as agent (and the
Trustee is hereby appointed to act as agent) on behalf of the Trust Fund and
that in such capacity it shall: (a) prepare and file, or cause to be prepared
and filed, in a timely manner, a U.S. Real Estate Mortgage Investment Conduit
Income Tax Returns (Form 1066 or any successor form adopted by the Internal
Revenue Service) and prepare and file or cause to be prepared and filed with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to each REMIC
created hereunder containing such information and at the times and in the manner
as may be required by the Code or state or local tax laws, regulations, or
rules, and furnish or cause to be furnished to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby; (b) within thirty days of the Closing Date, furnish or cause to be
furnished to the Internal Revenue Service, on Forms 8811 or as otherwise may be
required by the Code, the name, title, address, and telephone number of the
person that the Holders of the Certificates may contact for tax information
relating thereto, together with such additional information as may be required
by such Form, and update such information at the time or times in the manner
required by the Code for the Trust Fund; (c) make or cause to be made elections,
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on behalf of each REMIC created hereunder to be treated as a REMIC on the
federal tax return of each such REMIC 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; (e) provide information necessary for
the computation of tax imposed on the transfer of a Class A-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 the affairs of the Trust Fund at all times that any Certificates
are outstanding so as to maintain the status of each REMIC created hereunder as
a REMIC under the REMIC Provisions; (g) not knowingly or intentionally take any
action or omit to take any action that would cause the termination of the REMIC
status of any REMIC created hereunder; (h) pay, from the sources specified in
the last paragraph of this Section 8.11, the amount of any federal, state and
local taxes, including prohibited transaction taxes as described below, imposed
on any REMIC created hereunder prior to the termination of the Trust Fund 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) sign or cause to be signed federal, state or local income tax
or information returns; (j) maintain records relating to each REMIC created
hereunder, including but not limited to the income, expenses, assets and
liabilities of each such REMIC, and the fair market value and adjusted basis of
the Trust Fund property determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and (k) as and when necessary and appropriate,
represent the Trust Fund in any administrative or judicial proceedings relating
to an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any REMIC created hereunder,
enter into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of the Trust Fund, and otherwise
act on behalf of any REMIC created hereunder in relation to any tax matter
involving any such REMIC.
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 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 Mortgage 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, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.
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In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to the Trust Fund after the startup day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon the
Trust Fund pursuant to Sections 23153 and 24872 of the California Revenue and
Taxation Code if not paid as otherwise provided for herein, such tax shall be
paid by (i) the Trustee, if any such other tax arises out of or results from a
breach by the Trustee of any of its obligations under this Agreement, (ii) (x)
the Master Servicer, in the case of any such minimum tax, and (y) any party
hereto (other than the Trustee) to the extent any such other tax arises out of
or results from a breach by such other party of any of its obligations under
this Agreement or (iii) in all other cases, or in the event that any liable
party here fails to honor its obligations under the preceding clauses (i) or
(ii), any such tax will be paid first with amounts otherwise to be distributed
to the Class A-R Certificateholders, and second with amounts otherwise to be
distributed to all other Certificateholders in the following order of priority:
first, to the Class M-2 Certificates, second, to the Class M-1 Certificates, and
third, to the Class A-R Certificates and the Class A Certificates (pro rata).
Notwithstanding anything to the contrary contained herein, to the extent that
such tax is payable by the Class A-R Certificates, the Trustee is hereby
authorized to retain on any Distribution Date, from the Holders of the Class A-R
Certificates (and, if necessary, second, from the Holders of the all other
Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
The Trustee agrees to promptly notify in writing the party liable for any such
tax of the amount thereof and the due date for the payment thereof.
The Trustee shall treat the Carryover Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation 1.860G-2(h) that is owned
by the Class A-IO Certificateholders, and that is not an asset of any REMIC
created under this Agreement. The Trustee shall treat the rights of the Class
A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class M-1 and Class M-2
Certificateholders to receive payments from the Carryover Reserve Fund as rights
in an interest rate cap contract written by the Class A-IO Certificateholder in
favor of the other Certificateholders. Thus, each Certificate other than the
Class A-IO Certificate shall be treated as representing ownership of not only
Upper Tier REMIC Regular Interests, but also ownership of an interest in an
interest rate cap contract. For purposes of determining the issue price of the
Upper Tier REMIC Regular Interests, the Trustee shall assume that the interest
rate cap contract has a value of $10,000. As required under Treasury Regulation
1.860G-2(i), the Trustee shall account for the rights of the Class A-1, Class
A-2, Class A-3, Class A-4, Class A-5, Class M-1 and Class M-2 Certificateholders
to receive payments from the Carryover Reserve Fund as property that the Trustee
holds separate and apart from the Upper Tier REMIC Regular Interests.
The Trustee shall treat the Insurer Support Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation 1.8060G-2(h) that is
owned by the Master Servicer and that is not an asset of any REMIC created under
this Agreement. The Trustee shall treat the deposits made to the Insurer Support
Reserve Fund under Section 4.04(a)(iv) as servicing compensation and fees for
providing a credit enhancement contract within the meaning of Treasury
Regulation 1.860G-2(c)(2).
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The Trustee shall treat the Principal Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation 1.860G-2(h) that is owned
by the Seller and that is not an asset of any REMIC created under this
Agreement.
Section 8.12 The Co-Trustee.
(a) The Co-Trustee has been appointed at a Pennsylvania office solely
to (i) receive and hold the Mortgage Pool Insurance Policy on behalf of the
Certificateholders and (ii) make payments and receive proceeds paid in respect
of the Mortgage Loans pursuant to the Mortgage Pool Insurance Policy and take
the other actions expressly provided for in this Agreement. The Co-Trustee, not
in its individual capacity but solely in its capacity as Co-Trustee on behalf of
the Certificateholders, is hereby directed to hold the Mortgage Pool Insurance
Policy for the benefit of the Certificateholders. The Co-Trustee acknowledges
receipt of the Mortgage Pool Insurance Policy and agrees to perform its duties
at that office in the manner described below.
(b) The Co-Trustee shall not undertake nor have any of the duties of
the Trustee and shall have no obligations under this Agreement other than as
expressly stated in this Section 8.12.
On each Distribution Date upon receipt of funds from the Master Servicer in
accordance with Section 3.09, the Co-Trustee shall pay the amount received from
the Master Servicer to the Mortgage Pool Insurer on the Distribution Date by
wire transfer of immediately available funds in accordance with instructions
furnished by the Mortgage Pool Insurer pursuant to the Mortgage Pool Insurance
Policy. The Master Servicer shall make any claims pursuant to and in accordance
with the Mortgage Pool Insurance Policy and, except for the duties of the
Co-Trustee in this Section 8.12, shall perform all of the obligations of the
insured under the Mortgage Pool Insurance Policy on behalf of the Co-Trustee and
for the benefit of the Certificateholders. If the Co-Trustee receives any
payments under the Mortgage Pool Insurance Policy from the Mortgage Pool
Insurer, the Co-Trustee shall notify the Trustee of the receipt of such amounts
and shall pay them to the Trustee by wire transfer of immediately available
funds on the date of receipt if received before 12:00 P.M. (Philadelphia time),
and otherwise on the next Business Day. The wiring instructions for the Trustee
are:
The Bank of New York
ABA# 000-000-000
GLA# 111-565
For further credit: TAS Account No. 200243
Ref: CWABS 2003-S1
Attention: Xxxx X'Xxxxxxx (000) 000-0000.
If any payment under the Mortgage Pool Insurance Policy is made to the
Co-Trustee other than by wire transfer of immediately available funds, that
payment shall be deemed to have been received by the Co-Trustee on the date that
payment cleared and was available to the Co-Trustee in immediately available
funds.
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No provision of this Agreement shall be construed to relieve the
Co-Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:
(i) the duties and obligations of the Co-Trustee shall be determined
solely by the express provisions of this Agreement with the exception of
Section 8.10, the Co-Trustee shall not be liable, individually or as
Co-Trustee, 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 Co-Trustee and
the Co-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 Co-Trustee and conforming to the requirements of
this Agreement that it reasonably believed in good faith to be genuine and
to have been duly executed by the proper authorities respecting any matters
arising hereunder; and
(ii) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Co-Trustee, unless the Co-Trustee
was grossly negligent or acted in bad faith or with willful misfeasance.
(c) Except as otherwise provided in paragraph (b) above:
(i) the Co-Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) the Co-Trustee may consult with counsel 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 Co-Trustee shall not be liable, individually or as
Co-Trustee, 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 Co-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;
(v) the Co-Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys; and
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(vi) the Co-Trustee shall not be required to expend its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such liability is not
assured to it.
(d) The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer, as the case may be, and the Co-Trustee
assumes no responsibility for their correctness. The Co-Trustee makes no
representations as to the validity or sufficiency of this Agreement, the
Mortgage Pool Insurance Policy or of any Mortgage Loan or related document.
(e) The Co-Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Co-Trustee.
(f) The Master Servicer covenants and agrees (i) to pay to the
Co-Trustee from time to time, and the Co-Trustee shall be entitled to, such
compensation as shall be agreed in writing by the Master Servicer and the
Co-Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Co-Trustee and (ii)
to pay or reimburse the Co-Trustee, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Co-Trustee on
behalf of the Trust Fund in accordance with any of the provisions of this
Agreement (including, without limitation: (A) the reasonable compensation and
the expenses and disbursements of its counsel, but only for representation of
the Co-Trustee acting in its capacity as Co-Trustee hereunder and (B) to the
extent that the Co-Trustee must engage persons not regularly in its employ to
perform acts or services on behalf of the Trust Fund, which acts or services are
not in the ordinary course of the duties of a trustee, paying agent or
certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such persons,
except any such expense, disbursement or advance as may arise from its
negligence, bad faith or willful misconduct). The Co-Trustee and any director,
officer, employee or agent of the Co-Trustee shall be indemnified by the Master
Servicer and held harmless against any loss, liability or expense (i) incurred
in connection with any legal action relating to this Agreement, the Mortgage
Pool Insurance Policy or the Certificates, or in connection with the performance
of any of the Co-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 Co-Trustee's duties hereunder or by reason of
reckless disregard of the Co-Trustee's obligations and duties hereunder and (ii)
resulting from any error in any tax or information return prepared by the Master
Servicer. Such indemnity shall survive the termination of this Agreement or the
resignation or removal of the Co-Trustee hereunder.
(g) The Co-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 that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or
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having provided such security from time to time as is sufficient to avoid such
reduction), and otherwise acceptable to the Mortgage Pool Insurer. If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.12 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 Co-Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.12, the Co-Trustee shall resign
immediately in the manner and with the effect specified in paragraph (h) below.
The corporation or national banking association serving as Co-Trustee may have
normal banking and trust relationships with the Depositor, the Seller and the
Master Servicer and their respective affiliates; provided that such corporation
cannot be an affiliate of the Master Servicer other than the Trustee in its role
as successor to the Master Servicer. If at any time (i) the Co-Trustee ceases to
be eligible in accordance with this Section 8.12(g) and fails to resign after
written request by the Mortgage Pool Insurer or the Trustee, or (ii) the
Co-Trustee becomes incapable of acting, or is adjudged as bankrupt or insolvent,
or a receiver of the Co-Trustee or of its property is appointed, or any public
officer takes charge of the Co-Trustee or of its property or affairs for the
purpose of rehabilitation, conservation, or liquidation, then the Mortgage Pool
Insurer or Trustee may remove the Co-Trustee and appoint a successor co-trustee
by written instrument, with copies delivered to the Co-Trustee, the Trustee,
Mortgage Pool Insurer and the successor co-trustee. Any successor co-trustee
shall be paid pursuant to an agreement with the Master Servicer and the assets
of the Trust Fund shall not be used to satisfy any obligation to pay the
compensation of the successor co-trustee. Any resignation or removal of the
Co-Trustee and appointment of a successor co-trustee pursuant to this Section
shall become effective only upon acceptance of appointment by the successor
co-trustee as provided in this Section.
(h) The Co-Trustee may at any time resign and be discharged from the
trusts hereby created by giving 30 days prior written notice of resignation to
the Trustee, the Mortgage Pool Insurer, the Depositor and the Master Servicer.
Upon such resignation the Trustee (x) may appoint a successor Co-Trustee meeting
the requirements in paragraph (g) above and acceptable to the Master Servicer
(in its sole discretion), so long as such Co-Trustee executes and delivers to
the other parties hereto and to the Mortgage Pool Insurer an instrument agreeing
to be bound by the provisions of this Agreement or (y) may if permitted by the
Master Servicer (in its sole discretion) assume the rights and duties of the
resigning Co-Trustee so long as the Trustee executes and delivers an instrument
to that effect. The Co-Trustee shall deliver the Mortgage Pool Insurance Policy
and any amounts held in its possession for the benefit of the Certificateholders
to the successor co-trustee upon the appointment of the successor co-trustee.
(i) The Co-Trustee shall surrender the Mortgage Pool Insurance Policy
to the Mortgage Pool Insurer for cancellation upon the termination of the Trust
Fund.
(j) The wire instructions for the Co-Trustee are as follows:
Wachovia Bank, National Association
Charlotte, NC ABA# 000000000
D/5000000016439
FFC: CWABS 2003-S1
Attention to: CT1870/Xxxxxx Xxxxxx
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Section 8.13 Certain Rights of the Mortgage Pool Insurer.
(a) Upon the request of the Mortgage Pool Insurer, the Trustee shall
permit the Mortgage Pool Insurer or its authorized agents:
(i) to inspect the books and records as they may relate to the
Certificates, the Mortgage Loans, the obligations of the Trustee under this
Agreement and the Transaction;
(ii) to discuss the affairs, finances and accounts of the Trustee with
its chief operating officer and chief financial officer; and
(iii) to discuss the affairs, finances and accounts of the Trustee
with its independent accountants; provided, however, that its officers
shall have the right to be present during such discussions.
Such inspections and discussions shall be conducted during normal
business hours and shall not unreasonably disrupt the business of the Trustee.
The books and records of the Trustee shall be maintained at the address
specified in Section 10.05 of this Agreement, unless it shall otherwise advise
the parties hereto in writing.
(b) The Trustee shall, upon the amortization of all the Mortgage
Loans, furnish to the Mortgage Pool Insurer a notice of such amortization and,
upon such amortization, shall direct the Co-Trustee to surrender the Mortgage
Pool Insurance Policy to the Mortgage Pool Insurer for cancellation.
(c) In the event of any payment by the Mortgage Pool Insurer, the
Trustee agrees to accept the voucher or other evidence of payment as prima facie
evidence of the propriety thereof and the liability, if any, therefor to the
Mortgage Pool Insurer. All payments to be made to the Mortgage Pool Insurer
under shall be made to the Mortgage Pool Insurer in lawful currency of the
United States of America in immediately available funds at the notice address
for the Mortgage Pool Insurer as specified in Section 10.05 of this Agreement on
the date when due or as the Mortgage Pool Insurer shall otherwise direct by
written notice to the Trustee. In the event that the date of any payment to the
Mortgage Pool Insurer or the expiration of any time period hereunder occurs on a
day that is not a Business Day, then such payment or expiration of time period
shall be made or occur on the next succeeding Business Day with the same force
and effect as if such payment was made or time period expired on the scheduled
date of payment or expiration date. Payments to be made to the Mortgage Pool
Insurer hereunder shall bear interest at the Late Payment Rate from and
including the date when payable to but excluding the date when paid; provided,
that the sole source of such interest payment shall be the Insurer Support
Reserve Fund.
(d) To the extent of any payment made by the Mortgage Pool Insurer
pursuant to the Mortgage Pool Insurance Policy or this Agreement (in the case of
a payment from the Insurer Support Reserve Account), the Mortgage Pool Insurer
shall be subrogated to the Trustee's rights to receive payments in respect of
the Mortgage Loans or the Mortgaged Property. The Trustee agrees to take, or
cause to be taken, all actions deemed desirable by the Mortgage Pool Insurer to
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preserve, enforce, perfect or maintain the perfection in the Mortgage Pool
Insurer's favor of such rights and of all equitable rights of subrogation.
For the avoidance of doubt, the Trustee and the Co-Trustee acknowledge
and agree that the receipt of any payment under the Mortgage Pool Insurance
Policy shall not discharge any obligations whatsoever of the Trustee under this
Agreement.
The Trustee agrees to promptly and duly take, execute, acknowledge and
deliver such further acts, documents, instruments and assurances as the Mortgage
Pool Insurer may from time to time reasonably request to more effectively
evidence any rights to assignment or subrogation under this Section 8.13(d), and
to protect and perfect all of the Mortgage Pool Insurer's other rights as
against the Trustee.
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ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans.
Subject to Section 9.03, the Trust Fund shall terminate and the
obligations and responsibilities of the Depositor, the Master Servicer, the
Seller and the Trustee created hereby shall terminate upon the earlier of (a)
the repurchase by the Master Servicer of all of the Mortgage Loans (and REO
Properties) remaining in the Trust Fund at the price equal to the sum of (i)
100% of the Stated Principal Balance of each Mortgage Loan in the Trust Fund
(other than in respect of REO Property), (ii) accrued interest thereon at the
applicable Net Mortgage Rate, (iii) the appraised value of any REO Property in
the Trust Fund (up to the Stated Principal Balance of the related Mortgage
Loan), such appraisal to be conducted by an appraiser mutually agreed upon by
the Master Servicer and the Trustee, (iv) any unreimbursed Servicing Advances,
and the principal portion of any unreimbursed Advances, made on the Mortgage
Loans prior to the exercise of such repurchase and (v) the payment in full of
all amounts owed to the Mortgage Pool Insurer hereunder and under the Insurance
Agreement and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund and the disposition of all REO Property and (ii) the distribution to
related Certificateholders of all amounts required to be distributed to them
pursuant to this Agreement and payment in full of all amounts owed to the
Mortgage Pool Insurer hereunder and under the Insurance 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 last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof and (ii) the Latest Possible Maturity Date.
The Master Servicer shall have the right to repurchase all Mortgage
Loans and REO Properties in the Trust Fund pursuant to clause (a) in the
preceding paragraph only on or after the date on which the Master Servicer
determines that the customary and reasonable costs and expenses incurred in the
performance of the Master Servicer of its servicing obligations hereunder exceed
the benefits accruing to the Master Servicer; provided, however, that in no
event shall the Master Servicer exercise its right to repurchase all Mortgage
Loans and REO Properties in the Trust Fund pursuant to clause (a) in the
preceding paragraph of this Section 9.01 before the date on which the Stated
Principal Balance of the Mortgage Loans, at the time of any such repurchase, is
less than or equal to ten percent (10%) of the Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.
Section 9.02 Final Distribution on the Certificates.
If on any Determination Date, (i) the Master Servicer determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, the Master Servicer
shall direct the Trustee to send a final distribution notice promptly to each
Certificateholder or (ii) the Trustee determines that a Class of Certificates
shall be retired after a final distribution on such Class, the Trustee shall
notify the
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related Certificateholders within five (5) Business Days after such
Determination Date that the final distribution in retirement of such Class of
Certificates is scheduled to be made on the immediately following Distribution
Date. Any final distribution made pursuant to the immediately preceding sentence
will be made only upon presentation and surrender of the related Certificates at
the Corporate Trust Office of the Trustee. If the Master 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 Certificateholders, such
electing party shall notify the Depositor and the Trustee of the date such
electing party intends to terminate the Trust Fund and of the applicable
repurchase price of the related Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which related Certificateholders may surrender their
Certificates for payment of the final distribution and cancellation, shall be
given promptly by the Trustee by letter to related Certificateholders mailed not
earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on related
Certificates will be made upon presentation and surrender of such Certificates
at the office therein designated, (b) the amount of such final distribution, (c)
the location of the office or agency at which such presentation and surrender
must be made, and (d) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of such Certificates at the office therein specified.
The Master Servicer will give such notice to the Mortgage Pool Insurer and each
Rating Agency at the time such notice is given to the affected
Certificateholders.
In the event such notice is given, the Master 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
related Certificates. Upon such final deposit and the receipt by the Trustee of
a Request for Release therefor, the Trustee shall promptly release to the Master
Servicer the Mortgage Files for the related Mortgage Loans.
Upon presentation and surrender of the related Certificates, the
Trustee shall cause to be distributed to Certificateholders of each affected
Class the amounts allocable to such Certificates held in the Distribution
Account (and, if applicable, the Carryover Reserve Fund), net of any portion
thereof necessary to pay to the Mortgage Pool Insurer all amounts owed to the
Mortgage Pool Insurer hereunder and under the Insurance Agreement, in the order
and priority set forth in Section 4.04 hereof on the final Distribution Date and
in proportion to their respective Percentage Interests; provided, however, that
the Master Servicer shall provide the Trustee with a certificate setting forth
any amounts owed to the Mortgage Pool Insurer.
In the event that any affected Certificateholders shall not surrender
related 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 related
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
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surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one year
after the second notice all related Certificates shall not have been surrendered
for cancellation, the Class A-R shall be entitled to all unclaimed funds and
other assets that remain subject hereto.
Section 9.03 Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase option on
the Mortgage Loans, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee and the Mortgage Pool
Insurer have been supplied with an Opinion of Counsel, at the expense of the
Master Servicer, to the effect that the failure of the Trust Fund to comply with
the requirements of this Section 9.03 will not (i) result in the imposition of
taxes on "prohibited transactions" of a REMIC, or (ii) cause any REMIC created
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(1) The Master Servicer shall establish a 90-day liquidation
period and notify the Trustee thereof, which shall in turn specify the first day
of such period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury Regulation Section 1.860F-1. The Master Servicer shall
prepare a plan of complete liquidation and shall otherwise satisfy all the
requirements of a qualified liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of Counsel obtained at the
expense of the Master Servicer;
(2) During such 90-day liquidation period, and at or prior
to the time of making the final payment on the Certificates, the Master Servicer
as agent of the Trustee shall sell all of the assets of the Trust Fund for cash;
and
(3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Class A-R Certificateholders all cash on hand (other than
cash retained to meet claims) related to such Class of Certificates, and the
Trust Fund shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Master Servicer to specify the 90-day liquidation period
for the Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) 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 Master Servicer, and the receipt of the Opinion of Counsel
referred to in Section 9.03(a)(1), and together with the Holders of the Class
A-R Certificates agree to take such other action in connection therewith as may
be reasonably requested by the Master Servicer.
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ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Seller, the Co-Trustee and the Trustee, with the consent of
the Mortgage Pool Insurer but without the consent of any of the
Certificateholders to cure any ambiguity, to correct or supplement any
provisions herein, or to make such other provisions with respect to matters or
questions arising under this Agreement, as shall not be inconsistent with any
other provisions herein if such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder; provided that any such amendment shall be deemed not to
affect adversely in any material respect the interests of the Certificateholders
and no such Opinion of Counsel shall be required if the Person requesting such
amendment obtains a letter from each Rating Agency stating that such amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates, it being understood and agreed that any such
letter in and of itself will not represent a determination as to the materiality
of any such amendment and will represent a determination only as to the credit
issues affecting any such rating. Any amendment described above, made solely to
conform the Agreement to the Prospectus Supplement shall be deemed not to affect
adversely in any material respect the interests of the Certificateholders.
Notwithstanding the foregoing, no amendment that significantly changes the
permitted activities of the trust created by this Agreement may be made without
the consent of Certificateholders representing not less than 51% of the Voting
Rights of each Class of Certificates affected by such amendment.
The Trustee, the Depositor, the Master Servicer, the Co-Trustee and
the Seller may also at any time and from time to time amend this Agreement, with
the consent of the Mortgage Pool Insurer but without the consent of the
Certificateholders, to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or appropriate to maintain the qualification of the
Trust Fund as a REMIC under the Code or to avoid or minimize the risk of the
imposition of any tax on the Trust Fund pursuant to the Code that would be a
claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee and the Mortgage Pool Insurer have been
provided an Opinion of Counsel, which opinion shall be an expense of the party
requesting such opinion but in any case shall not be an expense of the Trustee,
to the effect that such action is necessary or appropriate to maintain such
qualification or to avoid or minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time, with the consent
of the Mortgage Pool Insurer, by the Depositor, the Master Servicer, the Seller,
the Co-Trustee and the Trustee and the Holders of each Class of Certificates
adversely affected thereby evidencing not less than 51% of the Voting Rights of
such Class 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 that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments required to be distributed on any Certificate without the consent of
the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner
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other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing 66% or more of the Voting Rights of such
Class, or (iii) reduce the aforesaid percentages of Certificates the Holders of
which are required to consent to any such amendment without the consent of the
Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it and the Mortgage
Pool Insurer shall have first received an Opinion of Counsel, which opinion
shall be an expense of the party requesting such amendment but in any case shall
not be an expense of the Trustee, to the effect that such amendment will not
cause the imposition of any tax on the Trust Fund or the Certificateholders or
cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder, the
Mortgage Pool Insurer 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.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE
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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 Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee 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. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in such assets, then
(i) this Agreement shall be deemed to be a security agreement (within the
meaning of the Uniform Commercial Code of the State of New York) with respect to
all such assets and security interests and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant pursuant to the
terms of this Agreement by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets that constitute
the Trust Fund, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency and the Mortgage Pool Insurer with respect to each of the
following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of the Master Servicer or the
Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02, 2.03, 2.04 and 3.12; and
(v) The final payment to Certificateholders.
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In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
(i) Each report to Certificateholders described in Section 4.05;
(ii) Each annual statement as to compliance described in Section 3.17;
and
(iii) Each annual independent public accountants' servicing report
described in Section 3.18.
(b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when sent by facsimile transmission,
first class mail or delivered to (i) in the case of the Depositor, CWABS, Inc.,
0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxxx, with a
copy to the same address, Attention: Legal Department; (ii) in the case of the
Seller, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxxx Xxxxxx, with a copy to the same address, Attention:
Legal Department, or such other address as may be hereafter furnished to the
Depositor and the Trustee by the Master Servicer in writing; (iii) in the case
of the Master Servicer, Countrywide Home Loans Servicing LP, 000 Xxxxxxxxxxx
Xxx, Xxxx Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxx or such other address
as may be hereafter furnished to the Depositor and the Trustee by the Master
Servicer in writing; (iv) in the case of the Trustee, The Bank of New York, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust MBS
Administration, CWABS, Series 2003-S1, or such other address as the Trustee may
hereafter furnish to the Depositor or the Master Servicer; (v) in the case of
the Co-Trustee, Wachovia Bank, National Association, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxx XX0000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx;
(vi) in the case of the Mortgage Pool Insurer, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Controller re: CWABS, Series 2003-S1 and (vii) in
the case of the Rating Agencies, (x) Xxxxx'x Investors Service, Inc., Attention:
ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 and (y) Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Attention: Mortgage Surveillance Group, 00 Xxxxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000. Notices to Certificateholders shall be deemed given when
mailed, first class postage prepaid, to their respective addresses appearing in
the Certificate Register.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
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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 Fund, 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
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
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 Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor, the Seller or the Trustee during the
Master Servicer's normal business hours, to examine all the books of account,
records, reports and other papers of the Master Servicer relating to the
Mortgage Loans, to make copies and extracts therefrom, to cause such books to be
audited by independent certified public accountants selected by the Depositor,
the Seller or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Master Servicer hereby authorizes
such accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
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requested. Any out-of-pocket expense incident to the exercise by the Depositor,
the Seller 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 Master Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 Third Party Rights.
Each of the parties hereto agrees that the Mortgage Pool Insurer shall
be an express third-party beneficiary of this Agreement to the same extent as if
it were a party hereto, and shall have the rights to enforce the provisions of
this Agreement.
Section 10.12 Rights in the Event of an Insurer Default or Insurer
Coverage Exhaustion Event.
Notwithstanding any provision in this Agreement to the contrary, in
the event an Insurer Default shall have occurred and be continuing or following
the occurrence of an Insurer Coverage Exhaustion Event, the Mortgage Pool
Insurer shall not have the right to take any action under this Agreement or to
control or direct the actions of the Trust Fund, the Depositor, the Seller, the
Master Servicer, the Trustee or the Co-Trustee pursuant to the terms of this
Agreement, nor shall the approval or consent of the Mortgage Pool Insurer be
required with respect to any action (or waiver of a right to take action) to be
taken by the Trust Fund, the Depositor, the Seller, the Master Servicer, the
Trustee or the Co-Trustee, or the Certificateholders pursuant to the terms of
this Agreement; provided, however, that, even if an Insurer Default shall have
occurred and be continuing or after the occurrence of an Insurer Coverage
Exhaustion Event, the consent of the Mortgage Pool Insurer shall be required at
all times with respect to any amendment of this Agreement; provided further that
the Mortgage Pool Insurer shall retain all of its rights under Section 3.05(g)
in the event an Insurer Default shall have occurred and be continuing or
following the occurrence of an Insurer Coverage Exhaustion Event.
* * *
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IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Seller and
the Trustee have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
CWABS, INC.,
as Depositor
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By: /s/ Xxxxx Xxxxxxx
----------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
COUNTRYWIDE HOME LOANS SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By: /s/ Xxxxxxxx Xxxxxxxxxxx
----------------------------
Name: Xxxxxxxx Xxxxxxxxxxx
Title: Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Co-Trustee
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 5th day of May, 2003, before me, a notary public in and for
said State, appeared Xxxxx Xxxxxxx, personally known to me on the basis of
satisfactory evidence to be the Executive Vice President of Countrywide Home
Loans, Inc., one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such corporation
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
--------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 5th day of May, 2003, before me, a notary public in and for
said State, appeared Xxxxx Xxxxxxx, personally known to me on the basis of
satisfactory evidence to be the Senior Vice President of Countrywide GP, Inc.,
the parent company of Countrywide Home Loans Servicing LP, one of the
organizations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such limited partnership and
acknowledged to me that such limited partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
--------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 5th day of May, 2003, before me, a notary public in and for
said State, appeared Xxxxx Xxxxxxx, personally known to me on the basis of
satisfactory evidence to be the Vice President of CWABS, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation and acknowledged to me that
such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
--------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 5th day of May, 2003, before me, a notary public in and for
said State, appeared Xxxxxxxx Xxxxxxxxxxx, personally known to me on the basis
of satisfactory evidence to be a Vice President of The Bank of New York, a New
York banking corporation that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Notary Public
[Notarial Seal]
STATE OF PENNSYLVANIA )
) ss.:
COUNTY OF [o] )
On this 5th day of May, 2003, before me, a notary public in and for
said State, appeared Xxxxxx X. Xxxxxx, personally known to me on the basis of
satisfactory evidence to be a Vice President of Wachovia Bank, National
Association, a national banking association that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxx Xxxxx-Xxxxxx
-----------------------------------
Notary Public
[Notarial Seal]
Exhibit A-1
through A-8
[Exhibits A-1 through A-8 are
photocopies of such Certificates as
delivered.]
A-1
Exhibit B
[Reserved]
B-1
Exhibit C
[Reserved]
C-1
Exhibit D
[Exhibit D is a photocopy
of the Class A-R Certificate
as delivered.]
D-1
Exhibit E
[Exhibit E is a photocopy
of the Tax Matters Person Certificate
as delivered.]
E-1
Exhibit F-1 and F-2
[Exhibit F-1 and F-2 are schedules of Mortgage Loans]
[Delivered to Trustee at closing and on file with the Trustee.]
F-1
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of April 1, 2003
among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller , Countrywide Home Loans Servicing LP, as
Master Servicer, The Bank of New York, as Trustee, and
Wachovia Bank, National Association, as Co-Trustee relating
to the Asset-Backed Certificates, Series 2003-S1
------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed in the attached list of exceptions) the Trustee has
received:
(i) the original Mortgage Note, endorsed by the Seller or the originator of
such Mortgage Loan, without recourse in the following form: "Pay to the order of
, without recourse", or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit from the Seller,
stating that the original Mortgage Note was lost or destroyed, together with a
copy of the related Mortgage Note; and
(ii) a duly executed assignment of the Mortgage in the form permitted by
Section 2.01 of the Pooling and Servicing Agreement referred to above.
Based on its review and examination and only as to the foregoing documents,
such documents appear regular on their face and related to such Mortgage Loan.
The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
G-1-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:___________________________________
Name:
Title:
G-1-2
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of April 1, 2003
among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller , Countrywide Home Loans Servicing LP, as
Master Servicer, The Bank of New York, as Trustee, and
Wachovia Bank, National Association, as Co-Trustee relating
to the Asset-Backed Certificates, Series 2003-S1
-----------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as listed in the following paragraph, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached list of exceptions) the Trustee has received:
(i) original Mortgage Note, endorsed by the Seller or the originator of
such Mortgage Loan, without recourse in the following form: "Pay to
the order of _______________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Seller, or, if the original Mortgage Note has been
lost or destroyed and not replaced, an original lost note affidavit
from the Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note;
(ii) the case of each Mortgage Loan that is not a MERS Mortgage Loan, the
original recorded Mortgage, [and in the case of each Mortgage Loan
that is a MERS Mortgage Loan, the original Mortgage, noting thereon
the presence of the MIN of the Mortgage Loan and language indicating
that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM
Loan, with evidence of recording indicated thereon, or a copy of the
Mortgage certified by the public recording office in which such
Mortgage has been recorded];
(iii) the case of each Mortgage Loan that is not a MERS Mortgage Loan, a
duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2003-S1 CWABS, Inc., by The Bank of New York, a
New York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of April 1, 2003, without recourse," or,
in the case of each Mortgage Loan with respect to property
G-2-1
located in the State of California that is not a MERS Mortgage Loan, a
duly executed assignment of the Mortgage in blank (each such
assignment, when duly and validly completed, to be in recordable form
and sufficient to effect the assignment of and transfer to the
assignee thereof, under the Mortgage to which such assignment
relates);
(iv) original recorded assignment or assignments of the Mortgage together
with all interim recorded assignments of such Mortgage [(noting the
presence of a MIN in the case of each MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of
recording thereon if recordation thereof is permissible under
applicable law; and
(vi) the original or duplicate original lender's title policy or a printout
of the electronic equivalent and all riders thereto or, in the event
such original title policy has not been received from the insurer, 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, with the original policy of title insurance to be
delivered within one year of the Closing Date.
In the event that in connection with any Mortgage Loan that is not a MERS
Mortgage Loan the Seller cannot deliver the original recorded Mortgage or all
interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv), as applicable, the Trustee has received, in lieu
thereof, a true and complete copy of such Mortgage and/or such assignment or
assignments of the Mortgage, as applicable, each certified by the Seller, the
applicable title company, escrow agent or attorney, or the originator of such
Mortgage Loan, as the case may be, to be a true and complete copy of the
original Mortgage or assignment of Mortgage submitted for recording.
Based on its review and examination and only as to the foregoing documents,
(i) such documents appear regular on their face and related to such Mortgage
Loan, and (ii) the information set forth in items (i), (iv), (v), (vi), (viii),
(xi) and (xiv) of the definition of the "Mortgage Loan Schedule" in Section 1.01
of the Pooling and Servicing Agreement accurately reflects information set forth
in the Mortgage File.
The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
X-0-0
Xxx Xxxx xx Xxx Xxxx,
as Trustee
By:
----------------------------
Name:
Title:
G-2-3
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of April 1, 2003 (the
"Pooling and Servicing Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller , Countrywide
Home Loans Servicing LP, as Master Servicer, The Bank of New
York, as Trustee, and Wachovia Bank, National Association, as
Co-Trustee relating to the Asset-Backed Certificates, Series
2003-S1
----------------------------------------------------------------
Gentlemen:
[Reference is made to the Initial Certification of Trustee relating to the
above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the above-captioned Pooling and Servicing Agreement.] The
undersigned hereby certifies that as to each Delay Delivery Mortgage Loan listed
on the Schedule A attached hereto (other than any Mortgage Loan paid in full or
listed on Schedule B attached hereto) the Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form:
"Pay to the order of _______________ without recourse", with all
intervening endorsements that show a complete chain of endorsement from the
originator to the Seller, or, if the original Mortgage Note has been lost
or destroyed and not replaced, an original lost note affidavit from the
Seller, stating that the original Mortgage Note was lost or destroyed,
together with a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2003-S1, CWABS, Inc., by The Bank of New York, a New
York banking corporation, as trustee under the Pooling and Servicing
Agreement dated as of April 1, 2003, without recourse", or, in the case of
each Mortgage Loan with respect to property located in the State of
California that is not a MERS Mortgage Loan, a duly executed assignment of
the Mortgage in blank (each such assignment, when duly and validly
completed, to be in recordable form and sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which such
assignment relates).
G-3-1
Based on its review and examination and only as to the foregoing documents,
such documents appear regular on their face and related to such Mortgage Loan.
The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
THE BANK OF NEW YORK,
as Trustee
By:
-------------------------------
Name:
Title:
G-3-2
EXHIBIT G-4
[RESERVED]
G-4-1
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Seller]
Re: Pooling and Servicing Agreement dated as of April 1, 2003 among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller , Countrywide Home Loans Servicing LP, as Master Servicer,
The Bank of New York, as Trustee, and Wachovia Bank, National
Association, as Co-Trustee relating to the Asset-Backed
Certificates, Series 2003-S1
----------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attached Document Exception Report) the
Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the originator of
such Mortgage Loan, without recourse in the following form: "Pay to the order of
_________________ without recourse", with all intervening endorsements that show
a complete chain of endorsement from the originator to the Seller, or, if the
original Mortgage Note has been lost or destroyed and not replaced, an original
lost note affidavit from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage Loan,
the original recorded Mortgage, [and in the case of each Mortgage Loan that is a
MERS Mortgage Loan, the original Mortgage, noting thereon the presence of the
MIN of the Mortgage Loan and language indicating that the Mortgage Loan is a MOM
Loan if the Mortgage Loan is a MOM Loan, with evidence of recording indicated
thereon, or a copy of the Mortgage certified by the public recording office in
which such Mortgage has been recorded];
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage Loan, a
duly executed assignment of the Mortgage to "Asset-Backed Certificates, Series
2003-S1, CWABS, Inc., by The Bank of New York, a New York banking corporation,
as trustee under the Pooling and Servicing Agreement dated as of April 1, 2003,
without recourse", or, in the case of each Mortgage Loan with respect to
property located in the State of California that is not a MERS Mortgage Loan, a
duly executed assignment of the Mortgage in blank (each such assignment, when
duly and validly completed, to be in recordable form and sufficient to effect
the assignment of and transfer to the assignee thereof, under the Mortgage to
which such assignment relates);
H-1
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage [(noting the
presence of a MIN in the case of each MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of recording thereon
if recordation thereof is permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or a printout
of the electronic equivalent 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.
If the public recording office in which a Mortgage or assignment thereof is
recorded has retained the original of such Mortgage or assignment, the Trustee
has received, in lieu thereof, a copy of the original Mortgage or assignment so
retained, with evidence of recording thereon, certified to be true and complete
by such recording office.
Based on its review and examination and only as to the foregoing documents,
(i) such documents appear regular on their face and related to such Mortgage
Loan, and (ii) the information set forth in items (i), (iv), (v), (vi), (viii),
(xiii) and (xiv) of the definition of the "Mortgage Loan Schedule" in Section
1.01 of the Pooling and Servicing Agreement accurately reflects information set
forth in the Mortgage File.
The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
H-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:
---------------------------------
Name:
Title:
H-3
EXHIBIT I
TRANSFER AFFIDAVIT
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 A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, dated as
of April 1, 2003 (the "Agreement"), by and among CWABS, Inc., as depositor (the
"Depositor"), Countrywide Home Loans, Inc., as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York, as Trustee, and Wachovia
Bank, National Association, as Co-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 not an employee benefit or other benefit plan that is
subject to Title I of ERISA or to Section 4975 of the Internal Revenue Code of
1986, nor is it acting on behalf of or with plan assets of any such plan. 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.
3. The Transferee has been advised of, and understands that (i) a tax will
be imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) for
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
4. The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass-through entity a Person that is not a Permitted
Transferee is the record holder of an interest in such entity. The Transferee
understands that such tax will not be imposed for any period with respect to
which the record holder furnishes to the pass-through entity an affidavit that
such record holder is a Permitted Transferee and the pass-through entity does
not have actual knowledge that such affidavit is false. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal
I-1
consequences of the acquisition of an Ownership Interest in the Certificate
including, without limitation, the restrictions on subsequent Transfers and the
provisions regarding voiding the Transfer and mandatory sales. The Transferee
expressly agrees to be bound by and to abide by the provisions of Section
5.02(c) of the Agreement and the restrictions noted on the face of the
Certificate. The Transferee understands and agrees that any breach of any of the
representations included herein shall render the Transfer to the Transferee
contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person to
whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the Class A-R
Certificates.
8. The Transferee's taxpayer identification number is _____.
9. The Transferee is a U.S. Person as defined in Code Section 7701(a)(30).
10. The Transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" 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. In addition, as the
holder of a noneconomic residual interest, the Transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
Transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.
11. The Transferee has provided financial statements or other financial
information requested by the Transferor in connection with the transfer of the
Class A-R Certificates to permit the Transferor to assess the financial
capability of the Transferee to pay such taxes.
* * *
I-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of _____________, 20__.
[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__.
I-3
EXHIBIT 1
Certain Definitions
-------------------
"Ownership Interest": As to any Certificate, any ownership interest in such
Certificate, including any interest in such Certificate as the Holder thereof
and any other interest therein, whether direct or indirect, legal or beneficial.
"Permitted Transferee": Any person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
4224, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that certain 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, limited liability company,
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.
EXHIBIT 2
Section 5.02(c) of the Agreement
--------------------------------
(c) Each Person who has or who acquires any Ownership Interest in a
Class A-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 A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a Class
A-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 A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Class A-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 I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class A-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 A-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 A-R Certificate and (C) not to
Transfer its Ownership Interest in a Class A-R Certificate or to cause the
Transfer of an Ownership Interest in a Class A-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 A-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 A-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 A-R Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Class A-R
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit and Transferor Certificate.
The Trustee shall be entitled but not obligated to recover from any Holder
of a Class A-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 A-R
Certificate at and
after either such time. Any such payments so recovered by the Trustee shall
be paid and delivered by the Trustee to the last preceding Permitted
Transferee of such Certificate.
(v) The Master Servicer 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 A-R Certificate to any
Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-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 Trustee, the Seller or the Master
Servicer to the effect that the elimination of such restrictions will not cause
the Trust Fund to fail to qualify as a REMIC at any time that the Certificates
are outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
Ownership Interest in a Class A-R Certificate hereby consents to any amendment
of this Agreement that, 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 A-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 A-R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
-2-
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS A-R CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed
Certificates, Series 2003-S1
----------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class A-R Certificates, we
certify that we have no knowledge the Transferee is not a Permitted Transferee.
All capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of April 1,
2003, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and Wachovia Bank, National Association, as Co-Trustee.
Very truly yours,
___________________________________
Name of Transferor
By:________________________________
Name:
Title:
J-1
EXHIBIT K
[Reserved]
K-1
EXHIBIT L
[Reserved]
L-1
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
Loan Information
----------------
Name of Mortgagor: ______________________________________
Master Servicer
Loan No.: ______________________________________
Trustee
-------
Name: ______________________________________
Address: ______________________________________
______________________________________
Trustee
Mortgage File No.: ______________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Trustee for the
Holders of Asset-Backed Certificates, Series 2003-S1, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement dated as of April 1, 2003 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer, the Trustee and
Wachovia Bank, National Association, as Co-Trustee.
( ) Mortgage Note dated ___________, ____, in the original principal sum
of $________, made by __________________, payable to, or endorsed to
the order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Deed of Trust recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________________ as instrument no. __________ in the County
Recorder's Office of
M-1
the County of __________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) _____________________________________________________
( ) _____________________________________________________
( ) _____________________________________________________
( ) _____________________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trust Fund, solely for the
purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions nor
shall the Master Servicer assert or seek to assert any claims or rights of
setoff to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the need
therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been remitted
to the Certificate Account and except as expressly provided in the
Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer
shall at all times be earmarked for the account of the Trust Fund, and the
Master Servicer shall keep the Documents and any proceeds separate and
distinct from all other property in the Master Servicer's possession,
custody or control.
[Master Servicer]
By ___________________________________
Its __________________________________
Date: _________________, ____
M-2
EXHIBIT N
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full, Repurchased or Replaced]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 2003-S1
__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]
LOAN NUMBER:_______________ BORROWER'S NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
____________ ___________________________ DATED:____________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
N-1
Exhibit O
[Exhibit O is a photocopy
of the Depository Agreement
as delivered.]
O-1
EXHIBIT P
FORM OF MORTGAGE NOTE AND MORTGAGE
[On file with the Trustee.]
P-1
P
EXHIBIT Q
LIST OF MORTGAGE FILE EXCEPTIONS
[On file with the Trustee.]
Q-1
