Exhibit 99.1
EXECUTION COPY
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CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
and
BNY WESTERN TRUST COMPANY,
Co-Trustee
______________________________________
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2002
______________________________________
ASSET-BACKED CERTIFICATES, SERIES 2002-BC3
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Table of Contents
Page
ARTICLE I.
DEFINITIONS
Section 1.01. Defined Terms.............................................................................I-9
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.............................................................II-1
Section 2.02. Acceptance of the Mortgage Loans.........................................................II-5
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the Seller..........II-8
Section 2.04. Representations and Warranties of the Depositor.........................................II-23
Section 2.05. Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases.........II-25
Section 2.06. Authentication and Delivery of Certificates.............................................II-25
Section 2.07. Covenants of the Master Servicer........................................................II-26
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service Mortgage Loans...............................................III-1
Section 3.02. Subservicing; Enforcement of the Obligations of Master Servicer.........................III-2
Section 3.03. Rights of the Depositor, the Seller and the Trustee in Respect of the Master Servicer...III-3
Section 3.04. Trustee to Act as Master Servicer.......................................................III-3
Section 3.05. Collection of Mortgage Loan Payments; Certificate Account; Distribution Account;
Seller Shortfall Interest Requirement; Principal Reserve Fund...........................III-3
Section 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts.....................III-7
Section 3.07. Access to Certain Documentation and Information Regarding the Mortgage Loans............III-7
Section 3.08. Permitted Withdrawals from the Certificate Account, Distribution Account and the
Carryover Reserve Fund.................................................................III-8
Section 3.09. [Reserved.]............................................................................III-10
Section 3.10. Maintenance of Hazard Insurance........................................................III-10
Section 3.11. Enforcement of Due-On-Sale Clauses; Assumption Agreements..............................III-11
i
Section 3.12. Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and
Realized Losses; Repurchase of Certain Mortgage Loans..................................III-12
Section 3.13. Co-Trustee to Cooperate; Release of Mortgage Files.....................................III-15
Section 3.14. Documents, Records and Funds in Possession of Master Servicer to be Held for the
Trustee ...............................................................................III-16
Section 3.15. Servicing Compensation.................................................................III-16
Section 3.16. Access to Certain Documentation........................................................III-17
Section 3.17. Annual Statement as to Compliance......................................................III-17
Section 3.18. Annual Independent Public Accountants' Servicing Statement; Financial Statements.......III-18
Section 3.19. The Cap Contract.......................................................................III-18
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances.................................................................................IV-1
Section 4.02. Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls....IV-1
Section 4.03. [Reserved]...............................................................................IV-2
Section 4.04. Distributions............................................................................IV-2
Section 4.05. Monthly Statements to Certificateholders.................................................IV-6
Section 4.06. [Reserved]...............................................................................IV-9
Section 4.07. [Reserved]...............................................................................IV-9
Section 4.08. Carryover Reserve Fund...................................................................IV-9
Section 4.09 Termination of MGIC Policy...............................................................IV-9
ARTICLE V.
THE CERTIFICATES
Section 5.01. The Certificates..........................................................................V-1
Section 5.02. Certificate Register; Registration of Transfer and Exchange of Certificates...............V-1
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.........................................V-5
Section 5.04. Persons Deemed Owners.....................................................................V-6
Section 5.05. Access to List of Certificateholders' Names and Addresses.................................V-6
Section 5.06. Book-Entry Certificates...................................................................V-6
Section 5.07. Notices to Depository.....................................................................V-7
Section 5.08. Definitive Certificates...................................................................V-8
Section 5.09. Maintenance of Office or Agency...........................................................V-8
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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..............VI-1
Section 6.02. Merger or Consolidation of the Depositor, the Master Servicer or the Seller..............VI-1
Section 6.03. Limitation on Liability of the Depositor, the Seller, the Master Servicer and Others.....VI-1
Section 6.04. Limitation on Resignation of Master Servicer.............................................VI-2
Section 6.05. Errors and Omissions Insurance; Fidelity Bonds...........................................VI-2
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01. Events of Default.......................................................................VII-1
Section 7.02. Trustee to Act; Appointment of Successor................................................VII-2
Section 7.03. Notification to Certificateholders......................................................VII-4
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01. Duties of Trustee......................................................................VIII-1
Section 8.02. Certain Matters Affecting the Trustee..................................................VIII-2
Section 8.03. Trustee Not Liable for Mortgage Loans..................................................VIII-3
Section 8.04. Trustee May Own Certificates...........................................................VIII-3
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses.....................................VIII-3
Section 8.06. Eligibility Requirements for Trustee...................................................VIII-4
Section 8.07. Resignation and Removal of Trustee.....................................................VIII-4
Section 8.08. Successor Trustee......................................................................VIII-5
Section 8.09. Merger or Consolidation of Trustee.....................................................VIII-6
Section 8.10. Appointment of Co-Trustee or Separate Trustee..........................................VIII-6
Section 8.11. Tax Matters............................................................................VIII-7
Section 8.12. Co-Trustee............................................................................VIII-11
ARTICLE IX.
TERMINATION
Section 9.01. Termination upon Liquidation or Repurchase of all Mortgage Loans.........................IX-1
Section 9.02. Final Distribution on the Certificates...................................................IX-1
Section 9.03. Additional Termination Requirements......................................................IX-3
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ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment.................................................................................X-1
Section 10.02. Recordation of Agreement; Counterparts....................................................X-2
Section 10.03. Governing Law.............................................................................X-2
Section 10.04. Intention of Parties......................................................................X-3
Section 10.05. Notices...................................................................................X-3
Section 10.06. Severability of Provisions................................................................X-4
Section 10.07. Assignment................................................................................X-5
Section 10.08. Limitation on Rights of Certificateholders................................................X-5
Section 10.09. Inspection and Audit Rights...............................................................X-6
Section 10.10. Certificates Nonassessable and Fully Paid.................................................X-6
EXHIBITS
EXHIBIT A Forms of Certificates
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class M-1 Certificate
EXHIBIT A-3 Form of Class M-2 Certificate
EXHIBIT A-4 Form of Class B-1 Certificate
EXHIBIT B Form of Class N Certificate
EXHIBIT C Form of Class X Certificate
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
Co-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-1 Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2 Form of Transferor Certificate for Private Certificates
EXHIBIT K Form of Investment Letter (Non-Rule 144A)
EXHIBIT L Form of Rule 144A Letter
EXHIBIT M Request for Release (for Co-Trustee)
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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 [reserved]
EXHIBIT R Form of Cap Contract
EXHIBIT S Form of Cap Contract Assignment Agreement
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POOLING AND SERVICING AGREEMENT, dated as of August 1, 2002, 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 BNY WESTERN TRUST
COMPANY, a California banking corporation, as Co-Trustee (the "Co-Trustee").
P R E L I M I N A R Y S T A T E M E N T
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 Cap Contract, the Carryover
Reserve Fund and the Principal Reserve Fund) be treated for federal income tax
purposes as comprising three real estate mortgage investment conduits (each a
"REMIC" or, in the alternative, the "Underlying REMIC," the "Master REMIC and
the "Stand-Alone REMIC," respectively). The Underlying REMIC will hold as
assets all property of the Trust Fund (other than the Cap Contract, the
Carryover Reserve Fund and the Principal Reserve Fund) and will be evidenced
by (i) the Underlying REMIC Regular Interests, which will be uncertificated
and will represent the "REMIC regular interests" in the Underlying REMIC, and
(ii) the Class LT-A-R Interest, which will represent the "REMIC residual
interest" in the Underlying REMIC. The Master REMIC will hold as assets the
Underlying REMIC Regular Interests and will be evidenced by the Class IO
Interest (which will be uncertificated) and the Offered Certificates, each of
which (other than the Class A-R Certificate) will represent ownership of one
or more "REMIC regular interests" in the Master REMIC. The Class A-R
Certificate will represent ownership of the sole class of "REMIC residual
interest" in each of the Underlying REMIC, the Master REMIC and the
Stand-Alone REMIC. The latest possible maturity date of all REMIC regular
interests created herein shall be the Latest Possible Maturity Date.
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The following table specifies the class designation, interest rate, and
principal amount for each class of Underlying REMIC Interest:
Underlying REMIC Interests
Underlying REMIC Class Initial Class Corresponding Class of Master REMIC
Designation Principal Balance Class Interest Rate Certificate or Interest
------------------------- ---------------------- ----------------------- --------------------------------------------
LT-A $421,250,000 (1) Class A Certificate
Class A-IO(2) Interest
LT-$100 $100 (1) Class A-R Certificate
Class A-IO(2) Interest
LT-A-R (2) (2) Class A-R Certificate
LT-M-1 $28,750,000 (1) Class M-1 Certificate
Class A-IO(2) Interest
LT-M-2 $27,500,000 (1) Class M-2 Certificate
A-IO(2) Interest
LT-B-1 $22,500,000 (1) Class B-1 Certificate
Class A-IO(2) Interest
(1) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for these Underlying REMIC Interests is a per annum rate equal
to the Net Rate Cap.
(2) The LT-A-R Interest will be the sole class of residual interest in the
Underlying 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 interest and principal on the Mortgage Loans to the Underlying
REMIC Interests in the same manner that such items are allocated to or
distributed among the Corresponding Classes of Certificates or Interests. On
each Distribution Date all Prepayment Charges collected during the related Due
Period shall be allocated among the Underlying REMIC Interests in proportion
to their outstanding principal balances.
The following table sets forth characteristics of the Certificates or
Interests in the Master REMIC, each of which, except for the Class A-R
Certificates, is hereby designated as a "regular interest" in the Master
REMIC:
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Master REMIC Interests
Original Certificate
Class Principal Balance Pass-Through Rate
---------- ------------------- -----------------
A $421,250,000 (1)
A-R $ 100 (2)
M-1 $ 28,750,000 (1)
M-2 $ 27,500,000 (1)
B-1 $ 22,500,000 (1)
IO $500,000,000 (3) (4)(5)
(1) The Certificates will accrue interest at the related Pass-Through Rates identified in this Agreement.
(2) The Class A-R Certificate will represent the sole class of residual interest in the Master REMIC. It pays no interest.
(3) This is a notional amount. No principal will be paid on the Class IO Interest.
(4) The Class IO Interest will accrue interest at the Class IO Pass-Through Rate. The Class IO Pass-Through Rate shall be a
rate sufficient to entitle it to all interest accrued on the Mortgage Loans less the interest accrued on the other
interests issued by the Master REMIC.
(5) All Prepayment Charges collected with respect the Underlying REMIC Interests shall be allocated to the Class IO Interest.
On each Distribution Date, the Trustee shall allocate losses and
distribute interest, principal and Prepayment Charges amount the Master REMIC
Certificates as described herein.
As provided herein, the Trustee shall make an election to treat the
segregated pool consisting of the Class IO Interest as a separate REMIC for
federal income tax purposes, which will be designated as the "Stand-Alone
REMIC." The Stand-Alone REMIC will issue the uncertificated Class SA Interest,
which is hereby designated a class of regular interest in the Stand-Alone
REMIC for federal income tax purposes. The Class SA Interest will be entitled
to all payments in respect of the Class IO Interest. Interests in the Class SA
Interest will be represented by the Class X and Class N Certificates, which
will be entitled to all payments in respect of the Class SA Interest. The SA-R
Interest is hereby designated as the sole class of residual interest in the
Stand-Alone REMIC for federal income tax purposes. The SA-R Interest will make
no payments of interest, principal or Prepayment Charges. The Class N
Certificates will have an Original Notional Amount of $35,000,000 and a per
annum Pass-Through Rate of 8.00%. The Trustee will treat the Class N and Class
X Certificates as provided in Section 8.11 hereunder.
Except as otherwise provided, for all purposes of the Code, all
distributions with respect to the Class X and Class N Certificates shall be
treated as first distributed with respect to the Class IO Interest, then
distributed with respect to the Class SA Interest, and then distributed to the
Class X and Class N Certificateholders.
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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 any Distribution Date and the
Certificates (other than the Class N and Class X Certificates), 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 any Distribution
Date and the Class N and Class X Certificates, the calendar month preceding
the month in which such Distribution Date occurs. All calculations of interest
on the Certificates (other than the Class N, Class X and Class A-R
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 the Class N and Class X Certificates will be made on the basis of
a 360-day year consisting of twelve 30-day months.
Actuarial Mortgage Loan: Any Mortgage Loan other than a Simple Interest
Mortgage Loan.
Adjustable Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable for the
life of the related Mortgage, including any Mortgage Loans delivered in
replacement thereof.
Adjusted Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the Maximum Mortgage Rate less the Expense Fee Rate. With
respect to each Fixed Rate Mortgage Loan, the Adjusted Net Mortgage Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
less the Expense Fee Rate.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
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 sum of (A) the aggregate of
payments of principal and interest on the Actuarial Mortgage Loans and
payments of interest on the Simple Interest Mortgage Loans (in each case, 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 and (B) with
I-9
respect to each REO Property that has not been liquidated,
an amount equal to the excess, if any, of (x) one month's interest (adjusted
to the Net Mortgage Rate) on the Stated Principal Balance of the related
Mortgage Loan over (y) 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, less the aggregate amount of any such delinquent
payments that the Master Servicer has determined would constitute a
Nonrecoverable Advance were an advance to be made with respect thereto.
Notwithstanding the foregoing, all references to scheduled interest or
interest due on a related Due Date with respect to a Simple Interest Mortgage
Loan will mean an amount equal to the excess of (i) 30 days' interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Simple
Interest Mortgage Loan as of the last day of the related Due Period over (ii)
the portion of any monthly payment received from the borrower during the
related Due Period which was allocable to interest.
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.
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 the most subordinate
Class of Subordinate Certificates outstanding 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 Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
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
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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 State of California or New York are
authorized or obligated by law or executive order to be closed.
Cap Contract: The transaction evidenced by the Confirmation And Agreement
(as assigned to the Trustee pursuant to the Cap Contract Assignment
Agreement), a form of which is attached hereto as Exhibit R.
Cap Contract Assignment Agreement: The Assignment Agreement regarding the
Cap Contract dated as of the Closing Date among the Seller, the Trustee and
the Cap Contract Counterparty, a form of which is attached hereto as Exhibit
S.
Cap Contract Counterparty: Bear Xxxxxxx Financial Products, Inc. and any
permitted successors and assigns pursuant to Cap Contract.
Cap Contract Termination Date: The Distribution Date in August 2011.
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 2002-BC3". Funds in the Carryover 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.
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-6, 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., Asset-Backed
Certificates, Series 2002-BC3". 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) payments on account of 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) payments on account of interest on the
Mortgage Loans due on and after the Cut-off Date and received by the Master
Servicer before the Closing Date.
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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 the
Class N and Class X 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) in the case of any Subordinate Certificate, 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 N
and Class X Certificates do not have a Certificate Principal Balance.
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 is entitled to
rely conclusively on a certification of the Depositor or any affiliate of the
Depositor in determining which Certificates are registered in the name of an
affiliate of the Depositor.
Class: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.
Class A Certificate: Any Certificate designated as a "Class A
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class A Certificate Principal Balance: As of any date of determination,
the Certificate Principal Balance of the Class A Certificates.
Class A Current Interest: For any Distribution Date, the interest accrued
on the Class A Certificate Principal Balance during the related Accrual Period
at the Class A Pass-Through Rate plus any amount previously distributed with
respect to interest for such Class that is recovered as a voidable preference
by a trustee in bankruptcy.
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Class A Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class A Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class A Certificates
with respect to interest on such prior Distribution Dates.
Class A Interest Carryover Amount: For any Distribution Date on which the
Pass-Through Rate for the Class A Certificates is based upon the Net Rate Cap,
the sum of (A) the excess of (i) the amount of interest the Class A
Certificates would otherwise be entitled to receive on such Distribution Date
had such rate been calculated as the sum of One-Month LIBOR and the applicable
Class A Margin for such Distribution Date, up to the Weighted Maximum Rate
Cap, over (ii) the amount of interest payable on the Class A Certificates at
the Net Rate Cap for such Distribution Date and (B) the Class A Interest
Carryover Amount for all previous Distribution Dates not previously paid
pursuant to Section 4.04, together with interest thereon at the Class A
Pass-Through Rate (without giving effect to the Net Rate Cap up to the
Weighted Maximum Rate Cap).
Class A Margin: For any Distribution Date on or prior to the Optional
Termination Date, 0.260% per annum and, for any Distribution Date after the
Optional Termination Date, 0.520% per annum.
Class A Pass-Through Rate: For the first Distribution Date, 2.071% per
annum. For any Distribution Date thereafter, the least of (i) One-Month LIBOR
plus the Class A Margin, (ii) the Net Rate Cap for such Distribution Date, and
(iii) the Weighted Maximum Rate Cap for such Distribution Date.
Class A Principal Distribution Amount: With respect to any Distribution
Date, the excess of (A) the Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date over (B) 66.00% of
the Stated Principal Balances of the Mortgage Loans for such Distribution
Date.
Class 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 weighted average Pass-Through Rate of the Class A, Class M-1, Class
M-2 and Class B-1 Certificates (weighted on the basis of the respective
Certificate Principal Balances thereof and adjusted in each case to an
effective rate reflecting the calculation of interest on the basis of a
360-day year that consists of twelve 30-day months).
Solely for federal income tax purposes, the Class IO Interest is entitled
to a specified portion of the interest accruing on each Underlying REMIC
regular interest. Specifically, the Class IO Interest is entitled to interest
accruals on each Underlying REMIC regular interest in excess of the interest
paid on such Underlying REMIC regular interest's corresponding Master REMIC
Certificate as indicated in the Preliminary Statement.
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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 Principal Distribution Amount: With respect to any Distribution
Date, the excess, if any, of (A) $100 over (B) 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.
Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of determination,
the Certificate Principal Balance of the Class B-1 Certificates.
Class B-1 Current Interest: For any Distribution Date, the interest
accrued on the Class B-1 Certificate Principal Balance during the related
Accrual Period at the Class B-1 Pass-Through Rate 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 B-1 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class B-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class B-1
Certificates with respect to interest on such prior Distribution Dates.
Class B-1 Interest Carryover Amount: For any Distribution Date on which
the Pass-Through Rate for the Class B-1 Certificates is based upon the Net
Rate Cap, the sum of (A) the excess of (i) the amount of interest the Class
B-1 Certificates would otherwise be entitled to receive on such Distribution
Date had such rate been calculated as the sum of One-Month LIBOR and the
applicable Class B-1 Margin for such Distribution Date, up to the Weighted
Maximum Rate Cap, over (ii) the amount of interest payable on the Class B-1
Certificates at the Net Rate Cap for such Distribution Date and (B) the Class
B-1 Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at
the Class B-1 Pass-Through Rate (without giving effect to the Net Rate Cap up
to the Weighted Maximum Rate Cap).
Class B-1 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 1.780% per annum and, for any Distribution Date after the
Optional Termination Date, 2.670% per annum.
Class B-1 Pass-Through Rate: For the first Distribution Date, 3.591% per
annum. For any Distribution Date thereafter, the least of (i) One-Month LIBOR
plus the Class B-1
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Margin, (ii) the Net Rate Cap for such Distribution Date, and (iii) the
Weighted Maximum Rate Cap for such Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any Distribution
Date, the excess of (i) the sum of (A) the 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), (C) the Class M-2
Certificate Principal Balance (after taking into account distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), and (D)
the Class B-1 Certificate Principal Balance immediately prior to such
Distribution Date over (ii) 97.50% of the aggregate Stated Principal Balances
of the Mortgage Loans for such Distribution Date, provided, however, that
after the Class A Certificate Principal Balance, the Class M-1 Certificate
Principal Balance and the Class M-2 Certificate Principal Balance have been
reduced to zero, the Class B-1 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for
such Distribution Date.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-2 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 on the Class M-1 Certificate Principal Balance during the related
Accrual Period at the Class M-1 Pass-Through Rate 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 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.
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 the Class
M-1 Certificates would otherwise be entitled to receive on such Distribution
Date had such rate been calculated as the sum of One-Month LIBOR and the
applicable Class M-1 Margin for such Distribution Date, up to the Weighted
Maximum Rate Cap, over (ii) the amount of interest payable on the Class M-1
Certificates at the Net Rate Cap for such Distribution Date 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 up
to the Weighted Maximum Rate Cap).
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Class M-1 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 0.600% per annum and, for any Distribution Date after the
Optional Termination Date, 0.900% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 2.411% per
annum. For any Distribution Date thereafter, the least of (i) One-Month LIBOR
plus the Class M-1 Margin, (ii) the Net Rate Cap for such Distribution Date,
and (iii) the Weighted Maximum 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 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) 77.50% of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date; provided, however, that after the Class A Certificate
Principal Balance, the Class M-2 Certificate Principal Balance and the Class
B-1 Certificate Principal Balance have been reduced to zero, the Class M-1
Principal Distribution Amount for such Distribution Date will 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-3 hereto,
representing the right to distributions as set forth herein.
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 on the Class M-2 Certificate Principal Balance during the related
Accrual Period at the Class M-2 Pass-Through Rate 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 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 the Class
M-2 Certificates would otherwise be entitled to receive on such Distribution
Date had such rate been calculated as the sum of One-Month LIBOR and the
applicable Class M-2 Margin for such Distribution Date, up to the Weighted
Maximum Rate Cap, over (ii) the amount of interest payable on the Class M-2
Certificates at the Net Rate Cap for such Distribution Date 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
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thereon at the Class M-2 Pass-Through Rate (without giving effect to the Net
Rate Cap up to the Weighted Maximum Rate Cap).
Class M-2 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 1.150% per annum and, for any Distribution Date after the
Optional Termination Date, 1.725% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 2.961% per
annum. For any Distribution Date thereafter, the least of (i) One-Month LIBOR
plus the Class M-2 Margin, (ii) the Net Rate Cap for such Distribution Date,
and (iii) the Weighted Maximum 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 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) 88.50% of the aggregate Stated Principal Balances of the Mortgage Loans
for such Distribution Date; provided, however, that after the Class A
Certificate Principal Balance, the Class M-1 Certificate Principal Balance and
the Class B-1 Certificate Principal Balance have been reduced to zero, the
Class M-2 Principal Distribution Amount for such Distribution Date will equal
100% of the Principal Distribution Amount for such Distribution Date.
Class N Certificate: Any Certificate designated as a "Class N
Certificate" on the face thereof, in the form of Exhibit B hereto,
representing the right to distributions as set forth herein.
Class N Current Interest: For any Distribution Date, the interest accrued
on the Class N Notional Amount during the related Accrual Period at the Class
N Pass-Through Rate 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 N Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class N Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class N Certificates
with respect to interest on such prior Distribution Dates.
Class N Notional Amount: As of any date of determination, an amount equal
to (i) the Original Class N Notional Amount plus the excess (if any) of (a)
the Class N Current Interest with respect to preceding Distribution Dates over
(b) the amount actually distributed to the Class N Certificates with respect
to interest on such preceding Distribution Dates, reduced by (ii) the
aggregate distributions in reduction of the Class N Notional Amount pursuant
to Section 4.04(e)(xi).
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Class N Pass-Through Rate: For each Distribution Date, 8.00% per annum.
Class X Certificate: Any Certificate designated as a "Class X
Certificate" on the face thereof, in the form of Exhibit C hereto,
representing the right to distributions as set forth herein.
Class X Distributable Amount: With respect to any Distribution Date, the
excess of (i) the aggregate of amounts distributable on the Class SA Interest
for such Distribution Date as provided in the Preliminary Statement, over (ii)
the aggregate of amounts distributable to the Class N Certificates pursuant to
Section 4.04(e)(xi).
Class SA Interest: As defined in the Preliminary Statement.
Closing Date: August 29, 2002.
Co-Trustee: BNY Western Trust Company, a California banking corporation,
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.
Compensating Interest: With respect to any Distribution Date, an amount
equal to one-half of the Servicing Fee, to be applied to the interest portion
of any Prepayment Interest Shortfall on the Mortgage Loans pursuant to Section
4.02 hereof.
Confirmation And Agreement: : The Confirmation and Agreement dated July
18, 2002, reference number FXNCC4862, evidencing the Cap Contract.
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:
(000) 000-0000, facsimile: (000) 000-0000.
Corresponding Certificate: With respect to each Master REMIC Regular
Interest, the Certificate that evidences ownership of that Master REMIC
Regular Interest.
Current Interest: With respect to (i) the Class A Certificates, the Class
A Current Interest, (ii) the Class M-1 Certificates, the Class M-1 Current
Interest, (iii) the Class M-2 Certificates, the Class M-2 Current Interest,
(iv) the Class B-1 Certificates, the Class B-1 Current Interest and (v) the
Class N Certificates, the Class N Current Interest.
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Cumulative Loss Trigger Event: Exists, with respect to a Distribution
Date after the Stepdown Date, if the aggregate amount of Realized Losses on
the Mortgage Loans from (and including) the Cut-off Date for each Mortgage
Loan to (and including) the last day of the related Due Period exceeds the
applicable percentage, for such Distribution Date, of the Cut-off Date
Principal Balance of the Mortgage Loans, as set forth below:
Distribution Date Percentage
September 2005-- August 2006............................... 3.00%
September 2006-- August 2007............................... 4.75%
September 2007-- August 2008............................... 6.15%
September 2008-- August 2009............................... 6.90%
September 2009 and thereafter.............................. 7.00%
Cut-off Date: In the case of any Mortgage Loan, the later of (x) August
1, 2002 and (y) the date of origination of such Mortgage Loan. When used with
respect to any Mortgage Loans "the Cut-off Date" shall mean the related
Cut-off Dates.
Cut-off Date Principal Balance: As to any Actuarial 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. As to
any Simple Interest 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 made on or prior to the Cut-off Date and all Principal Prepayments
received on or prior to the Cut-off Date.
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 Co-Trustee
on or prior to the Closing Date. The Depositor
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shall deliver (or cause delivery of) the Mortgage Files to the Co-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 30 days after the Closing
Date. To the extent that the Seller shall be in possession of any Mortgage
Files with respect to any Delay Delivery Loan, until delivery to of such
Mortgage File to the Co-Trustee as provided in Section 2.01, the Seller 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: Exists, with respect to any Distribution Date
after the Stepdown Date, if the product of (i) 2.37 times (ii) the fraction
(expressed as a percentage) (A) 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 (B) the denominator of which is the
aggregate Stated Principal Balance for such Distribution Date of all Mortgage
Loans, equals or exceeds 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.
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.
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Depository Agreement: With respect to the Class of 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 2002-BC3". 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 September 2002.
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 first day of the month in
which such Distribution Date occurs.
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 and to
each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account or a perfected first
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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 any class
of Certificates that does not satisfy the applicable rating requirement under
the Underwriter's Exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the sum of (i) the
amount remaining after the distribution of interest to Certificateholders for
such Distribution Date pursuant to Section 4.04(a)(v), and (ii) the amount
remaining after the distribution of principal to Certificateholders for such
Distribution Date pursuant to Section 4.04(d)(i)(F) or 4.04(d)(ii)(E).
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 of such liquidation 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 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, and (ii) the
Trustee Fee Rate.
Extra Principal Distribution Amount: With respect to any Distribution
Date, the lesser of (1) the Overcollateralization Deficiency Amount for such
Distribution Date and (2) the Excess Cashflow for such Distribution Date
available for payment thereof.
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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.
Fixed Rate Mortgage Loans: The Mortgage Loans identified in the Mortgage
Loan Schedule as having a Mortgage Rate which is fixed for the life of the
related Mortgage, including any Mortgage Loans delivered in replacement
thereof.
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.
Gross Margin: The percentage set forth in the related Mortgage Note for
the Adjustable Rate Mortgage Loans to be added to the Index for use in
determining the Mortgage Rate on each Adjustment Date, and which is set forth
in the Mortgage Loan Schedule for the Adjustable Rate Mortgage Loans.
Index: As to any Adjustable Rate Mortgage Loan on any Adjustment Date
related thereto, the index for the adjustment of the Mortgage Rate set forth
as such in the related Mortgage Note, such index in general being the average
of the London interbank offered rates for six-month U.S. dollar deposits in
the London market, as set forth in The Wall Street Journal or some other
source generally accepted in the residential mortgage loan origination
business and specified in the related Mortgage Note, as most recently
announced as of either 45 days prior to, or the first business day of the
month immediately preceding the month of, such Adjustment Date or, if the
Index ceases to be published in the original source or becomes unavailable for
any reason, then the Index shall be a new index selected by the Master
Servicer, based on comparable information.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Adjustment Date following the origination of such Mortgage Loan.
Initial Certificate Principal Balance: With respect to any Certificate
(other than the Class N and Class X Certificates), the Certificate Principal
Balance of such Certificate or any predecessor Certificate on the Closing
Date.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Required Insurance Policy or any other insurance policy
covering a Mortgage Loan, to the
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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.
Insured Expenses: Expenses covered by a Required Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Interest Carry Forward Amount: With respect to (i) the Class A
Certificates, the Class A Interest Carry Forward Amount, (ii) the Class M-1
Certificates, the Class M-1 Interest Carry Forward Amount, (iii) the Class M-2
Certificates, the Class M-2 Interest Carry Forward Amount, (iv) the Class B-1
Certificates, the Class B-1 Interest Carry Forward Amount, and (v) the Class N
Certificates, the Class N Interest Carry Forward Amount.
Interest Determination Date: With respect to the Certificates (other than
the Class A-R, Class X and Class N Certificates) for the first Accrual Period,
August 27, 2002. With respect to the Certificates (other than the Class A-R,
Class X and Class N Certificates) and 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 Rate Cap Agreement: An interest rate cap contract referred to in
the last paragraph of Section 8.11 and all related provisions of this
Agreement.
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
Compensating Interest with respect to the Mortgage Loans, (iv) Liquidation
Proceeds with respect to the Mortgage Loans collected during the related Due
Period (to the extent such Liquidation Proceeds relate to interest), and (v)
for the Master Servicer Advance Date in September 2002, the Seller Shortfall
Interest Requirement for such Master Servicer Advance Date (if any), less all
Nonrecoverable Advances relating to interest reimbursed during the related Due
Period.
Latest Possible Maturity Date: The Distribution Date in August 2032.
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.
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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.
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 and Servicing Advances.
Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Underlying REMIC Regular Interest: As specified in the Preliminary
Statement.
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.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the maximum rate of interest set forth as such in the related Mortgage
Note.
Maximum Rate: The weighted average of the Adjusted Maximum Mortgage Rates
on the Mortgage Loans weighted on the basis of the Stated Principal Balance
thereof and adjusted to an effective rate reflecting the accrual of interest
calculated on the basis of a 360-day year and the actual number of days
elapsed during the related interest accrual period.
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.
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Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.
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. or any successor thereto.
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 Co-Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Loan: Each 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 Trust Fund.
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 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 Initial Mortgage Rate;
(iv) the maturity date;
(v) the original principal balance;
(vi) the Cut-off Date Principal Balance;
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(vii) the first payment date of the Mortgage Loan;
(viii) the Scheduled Payment in effect as of the Cut-off Date;
(ix) the Loan-to-Value Ratio or 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;
(xii) a code indicating whether the Mortgage Loan is a Simple Interest
Mortgage Loan;
(xiii) [reserved];
(xiv) with respect to each Adjustable Rate Mortgage Loan;
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Periodic Rate Cap;
(g) the Gross Margin; and
(h) the purpose of the Mortgage Loan.
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 Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
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Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligors on a Mortgage Note.
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, the weighted average Adjusted
Net Mortgage Rate on the Mortgage Loans in the Trust Fund, adjusted 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.
Net Rate Carryover: With respect to any Distribution Date, an amount
equal to the sum of (i) the Class A Interest Carryover Amount for such
Distribution Date (if any), (ii) the Class M-1 Interest Carryover Amount for
such Distribution Date (if any), (iii) the Class M-2 Interest Carryover Amount
for such Distribution Date (if any), and (iv) the Class B-1 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-R, Class X and Class N Certificates), it shall mean such carryover
amount listed in clauses (i), (ii), (iii) or (iv) as applicable, with the same
Class designation. The Class A-R, Class X and Class N 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.
OC Floor: For any Distribution Date, is an amount equal to 0.50% of the
aggregate Stated Principal Balances of the Mortgage Loans as of the Cut-off
Date.
Offered Certificates: The Class A, Class A-R, Class M-1, Class M-2 and
Class B-1 Certificates.
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, (x) 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 or Countrywide GP,
Inc., its general partner, or (y) if provided for in this Agreement, signed by
a Servicing Officer, as the case may be, and delivered to the Depositor and
the Trustee, as the case may be, as required by this Agreement.
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One-Month LIBOR: With respect to any Accrual Period, 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 1.81125% 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 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
aggregate 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 Class N Notional Amount: The Notional Amount of the Class N
Certificates on the Closing Date, as set forth opposite such Class in the
Preliminary Statement.
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:
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(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any 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.
Overcollateralized Amount: For any Distribution Date, the amount, if any,
by which (x) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period exceeds (y) the aggregate
Certificate Principal Balances of the Offered Certificates as of such
Distribution Date (after giving effect to distributions in respect of the
Principal Remittance Amount on such Distribution Date).
Overcollateralization Deficiency Amount: With respect to any Distribution
Date, the amount, if any, by which the Overcollateralization Target Amount
exceeds the Overcollateralized Amount for such Distribution Date (after giving
effect to distributions in respect of the Principal Remittance Amount for such
Distribution Date).
Overcollateralization Target Amount: (a) On the Closing Date and each
date prior to the Stepdown Date, an amount equal to 1.25% of Cut-off Date
Principal Balance of the Mortgage Loans, and (b) on and after the Stepdown
Date, an amount equal to 2.50% of the Stated Principal Balances of the
Mortgage Loans in the Mortgage Pool for the current Distribution Date, subject
to a minimum amount equal to the OC Floor; provided, however, that, if on any
Distribution Date, a Trigger Event has occurred and is continuing, the
Overcollateralization Target Amount shall be the Overcollateralization Target
Amount for the immediately preceding Distribution Date.
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 Certificates, the Class A
Pass-Through Rate; with respect to the Class M-1 Certificates, the Class M-1
Pass-Through Rate; with respect to the Class M-2 Certificates, the Class M-2
Pass-Through Rate; with respect to the Class B-1 Certificates, the Class B-1
Pass-Through Rate; with respect to the Class IO Certificate, the Class IO
Pass-Through Rate and with respect to the Class N Certificates, the Class N
Pass-Through Rate.
Percentage Interest: With respect to any Certificate (other than the
Class N, Class X or Class A-R Certificates), a fraction, expressed as a
percentage, the numerator of which is the Certificate Principal Balance
represented by such Certificate and the denominator of which
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is the aggregate Certificate Principal Balance of the related Class. With
respect to the Class N Certificate, a fraction, expressed as a percentage, the
numerator of which is the Class N Notional Amount and the denominator of which
is the aggregate Class N Notional Amount. With respect to the Class X and
Class A-R Certificates, the portion of the Class evidenced thereby, expressed
as a percentage, as stated on the face of such Certificate.
Periodic Rate Cap: As to substantially all Adjustable Rate Mortgage Loans
and the related Mortgage Notes, the provision therein that limits permissible
increases and decreases in the Mortgage Rate on any Adjustment Date to not
more than three percentage points.
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;
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(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;
(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 if the Rating Agency is
Moody's, such rating shall be the highest commercial paper rating of S&P
for any such securities) 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
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income tax purposes, unless the Master Servicer 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.
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 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.
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Prepayment Charge: As to a Mortgage Loan, any charge paid by a Mortgagor
in connection with certain partial prepayments and all prepayments in full
made within the related Prepayment Charge Period, the Prepayment Charges with
respect to each applicable Mortgage Loan being identified in the Prepayment
Charge Schedule.
Prepayment Charge Period: As to any Mortgage Loan the period of time
during which a Prepayment Charge may be imposed.
Prepayment Charge Schedule: As of any date, the list of Prepayment
Charges included in the Trust Fund on that date, (including the prepayment
charge summary attached thereto). The Prepayment Charge Schedule shall contain
the following information with respect to each Prepayment Charge:
(i) the Mortgage Loan account number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination in which the related Mortgage
Property is located;
(iv) the first date on which a Monthly Payment is or was due under
the related Mortgage Note;
(v) the term of the Prepayment Charge;
(vi) the original principal amount of the related Mortgage Loan; and
(vii) the Cut-off Date Principal Balance of the related Mortgage
Loan.
The Prepayment Charge Schedule shall be amended from time to time by the
Master Servicer in accordance with this Agreement.
Prepayment Interest Excess: With respect to any Distribution Date, for
each Actuarial 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 full, or that became a Liquidated Loan during (i) the
Prepayment Period with respect to a Simple Interest Mortgage Loan or (ii) the
period from the sixteenth day of the month preceding such Distribution Date,
or in the case of the first Distribution Date, from August 1, 2002 through and
including the last day of the month preceding such Distribution Date (in each
case, 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
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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, (i) with respect to
Actuarial Mortgage Loans, the 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 August 1, 2002) and ending on the close of business on the
fifteenth day of the month in which such Distribution Date occurs or (ii) with
respect to Simple Interest Mortgage Loans, the calendar month preceding such
Distribution Date.
Principal Distribution Amount: With respect to the Distribution Date
occurring in September 2002, the sum of (i) the Principal Remittance Amount
for such Distribution Date, (ii) the funds withdrawn from the Principal
Reserve Fund and deposited in the Distribution Account pursuant to Section
3.05(e), and (iii) the Extra Principal Distribution Amount for such
Distribution Date. With respect to each subsequent Distribution Date, the sum
of (i) the Principal Remittance Amount for such Distribution Date, and (i) the
Extra Principal Distribution 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: (a) The sum, without duplication, of: (i)
the scheduled principal collected with respect to the Actuarial Mortgage Loans
during the related Due Period or advanced on or before the related Master
Servicer Advance Date, (ii) prepayments collected in the related Prepayment
Period, with respect to the Actuarial Mortgage Loans and, with respect to the
Simple Interest Mortgage Loans, all payments received from the borrower which
are allocable to principal, (iii) the Stated Principal Balance of each
Mortgage Loan that was repurchased by the Seller or purchased by the Master
Servicer, (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
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(e) in the name of
the Trustee for the benefit
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of the Certificateholders and designated "The Bank of New York in trust for
registered holders of CWABS, Inc., Asset-Backed Certificates, Series
2002-BC3". 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. Any investment
income earned from Permitted Investments made with funds in the Principal
Reserve Fund will be for the account of the Seller.
Private Certificates: The Class X and Class N Certificates.
Prospectus Supplement: The Prospectus Supplement dated July 17, 2002,
relating to the public offering of the Offered Certificates offered thereby.
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 and
(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.
Rating Agency: Each of Xxxxx'x 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. 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 of such liquidation, equal to (i) the Stated Principal Balance of
such Liquidated Loan as of the date of such liquidation, minus (ii) the
Liquidation Proceeds, if any, received in connection with such liquidation
during the month 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
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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 any Distribution Date and the Certificates
other than the Class A-R, Class N and Class X Certificates, the Business Day
immediately preceding such Distribution Date, or if such Certificates are no
longer Book-Entry Certificates, the last Business Day of the month preceding
the month of such Distribution Date. With respect to the Class A-R, Class N
and Class X Certificates, the last Business Day of the month preceding the
month of a Distribution Date.
Reference Bank Rate: With respect to any Accrual Period, 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, Class M-1, Class M-2 and Class B-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 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, Class M-1, Class M-2 and
Class B-1 Certificates on such Interest Determination Date.
Reference Banks: Barclays Bank PLC, Deutsche Bank 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 or any affiliate 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 Offered Certificate other than a Class A-R
Certificate.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
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
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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) with
respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than or
no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (a) have
a Maximum Mortgage Rate no more than 1% per annum higher or lower than the
Maximum Mortgage Rate of the Deleted Mortgage Loan; (b) have a Minimum
Mortgage Rate no more than 1% per annum higher or lower than the Minimum
Mortgage Rate of the Deleted Mortgage Loan; (c) have the same Index, Periodic
Rate Cap and intervals between Adjustment Dates as that of the Deleted
Mortgage Loan and a Gross Margin not more than 1% per annum higher or lower
than that of the Deleted Mortgage Loan; and (d) not permit conversion of the
related Mortgage Rate to a fixed Mortgage Rate; (iii) have the same or higher
credit quality characteristics than that of the Deleted Mortgage Loan; (iv) at
the time of transfer to the Trust Fund, 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 Loan-to-Value Ratio or Combined Loan-to-Value Ratio,
as applicable, 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) [reserved], 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 Percentage: With respect to any Distribution Date after the
Stepdown Date, is equal to a fraction (expressed as a percentage) 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 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, any Vice
President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and 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.
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S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc. or any successor thereto.
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 (after giving effect
to all other deposits to and withdrawals from the Carryover Reserve Fund on
such Distribution Date).
Securities Act: The Securities Act of 1933, as amended.
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 September 2002, an amount equal to 30 days interest on the Stated
Principal Balance of each Mortgage Loans that does not have a scheduled
payment of interest due in the related Due Period at the Adjusted Net Mortgage
Rates for such Mortgage Loans.
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.
Simple Interest Method: The method of allocating a payment to principal
and interest pursuant to which the portion of such payment that is allocated
to interest is equal to the product of the fixed rate of interest multiplied
by the unpaid principal balance multiplied by the period of time elapsed since
the preceding payment of interest was received and divided by
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either 360 or 365, as specified in the related Mortgage Note, and the
remainder of such payment is allocated to principal.
Simple Interest Mortgage Loan: Any Mortgage Loan under which the portion
of a payment allocable to interest and the portion of such payment allocable
to principal is determined in accordance with the Simple Interest Method.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, the unpaid principal balance of the
Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial prepayments or Liquidation Proceeds received prior to
such date and to the payment of principal due (with respect to Actuarial
Mortgage Loans) or actually paid (with respect to Simple Interest Mortgage
Loans) on or prior to such date and irrespective any delinquency in payment by
the related mortgagor with respect to Actuarial Mortgage Loans, and (ii) as of
any Distribution Date, the Stated Principal Balance of the Mortgage Loan as of
its Cut-off Date, minus the sum of (a) the principal portion of (i) for the
Actuarial Mortgage Loans, 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 made as of the Master Servicer Advance Date related to
such Distribution Date, or (ii) for Simple Interest Mortgage Loans, actual
payments due with respect to the Mortgage Loans on or prior to the end of the
most recent Due Period that were received by the Master Servicer as of the
close of business on the Determination 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 Distribution Date
following the Due Period in which such Mortgage Loan becomes a Liquidated
Loan. References herein to the Stated Principal Balance 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 later to occur of (i) the Distribution Date in
September 2005 or (ii) the first Distribution Date on which the Class A
Certificate Principal Balance is less than or equal to 66.00% of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date,
after giving effect to all distributions on the Class A Certificates on such
Distribution Date.
Subordinate Certificates: The Class M-1, Class M-2 and Class B-1
Certificates.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
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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.
Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 36 months after origination thereof before such Mortgage
Rate becomes subject to adjustment.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Trigger Event: With respect to any Distribution Date after the Stepdown
Date, either a Delinquency Trigger Event or a Cumulative Loss Trigger Event.
Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto 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 Carryover Reserve
Fund, the Principal Reserve Fund, and all amounts deposited therein pursuant
to the applicable provisions of this Agreement; (iii) the Cap Contract; (iv)
property that secured a Mortgage Loan and has been acquired by foreclosure,
deed in lieu of foreclosure or otherwise; (v) the mortgagee's rights under any
insurance policies with respect to the Mortgage Loan; 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.
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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 for
such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.009% per annum.
Two-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 24 months after origination thereof before such Mortgage
Rate becomes subject to adjustment.
Underwriter's Exemption: Prohibited Transaction Exemption 2000-58, 65
Fed. Reg. 67765 (2000), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.
Unpaid Realized Loss Amount: For any Class of Subordinate Certificates,
the portion of the aggregate Applied Realized Loss Amount previously allocated
to that Class remaining unpaid from prior Distribution Dates.
Master REMIC Interest: As specified in the Preliminary Statement.
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 97% to the Certificates other than the Class A-R, Class N and Class
X Certificates (with the allocation among the 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 1% to each of the Class A-R,
Class N and Class X Certificates. Voting Rights will be allocated among the
Certificates of each such Class in accordance with their respective Percentage
Interests.
Weighted Maximum Rate Cap: As of any Distribution Date, a rate equal to
the weighted average of the Adjusted Maximum Mortgage Rates on the Mortgage
Loans.
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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 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. 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 sells, transfers, assigns, sets over and
otherwise conveys to the Trustee for benefit of the Certificateholders,
without recourse, all right title and interest in the Mortgage Loans.
The Seller further agrees to assign all of its right, title and interest
in and to the each of the interest rate cap transactions evidenced by the
Confirmation And Agreement , and to cause all of its obligations in respect of
each such transaction to be assumed by, the Trustee on behalf of the Trust
Fund, on the terms and conditions set forth in the Cap Contract Assignment
Agreement.
(b) [reserved]
(c) The Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein. The Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders,
without recourse, all right title and interest in the portion of the Trust
Fund not otherwise conveyed to the Trustee pursuant to Sections 2.01(a) or
(b).
(d) [reserved]
(e) [reserved]
(f) [reserved]
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(g) In connection with the transfer and assignment of each Mortgage Loan,
the Depositor has delivered to, and deposited with, the Co-Trustee (or, in the
case of the Delay Delivery Mortgage Loans, will deliver to, and deposit with,
the Co-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):
(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 2002-BC3, CWABS, Inc., by The Bank of New York, a
New York banking corporation, as trustee under the Pooling and Servicing
Agreement dated as of August 1, 2002, 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
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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 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 Co-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 Co-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 Co-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 Co-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
Co-Trustee (x) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (y) any other documents
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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, 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 Co-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
procedures of the preceding sentence shall be applicable only so long as the
related Mortgage File is maintained in the possession of the Co-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 or the Co-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 Co-Trustee maintains an office in the State of California,
the Co-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.
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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
Co-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
with written notice of any cure, repurchase or substitution made pursuant to
the proviso of the preceding 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 (in the case of the Mortgage Loans), 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.
Section 2.02. Acceptance of the Mortgage Loans.
(a) The Co-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 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 Co-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
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Trustee agrees to execute and deliver within 30 days after the Closing Date to
the Depositor, the Master Servicer 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 Co-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 (i),
(iv), (v), (vi), (viii), (xi) and (xiv) 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 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 Co-Trustee or the Trustee, as applicable, 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 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 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 Co-Trustee, at the Trustee's direction, shall review each
Mortgage File with respect to the Mortgage Loans to determine that such
Mortgage File contains the following documents:
(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 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 Mortgage has been
recorded;
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(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage in the form permitted by
Section 2.01;
(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.
If, in the course of such review, the Co-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) above, 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) above, 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 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 Co-Trustee of a Request for Release substantially in the form of
Exhibit N. 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 Co-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 shall be necessary to vest in the Seller, or a designee,
the Trust Fund's interest in any Mortgage Loan released pursuant hereto. If
pursuant to the foregoing provisions the Seller repurchases an 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
II-7
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 Co-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 Co-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)(A) or (B) above shall constitute the sole
remedy respecting such defect available to the Trustee, the Co-Trustee, the
Depositor 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 Seller 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
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.
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(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
Master Servicer and the Trustee as follows, as of the Cut-off Date (unless
otherwise indicated or the context otherwise requires, percentages with
respect to the Mortgage Loans are measured by the Cut-off Date Principal
Balance):
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(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; 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 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 and
thereof 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.
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(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, 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 secured by a first lien on the related
Mortgaged Property had a Loan-to-Value Ratio at origination in excess of
100%; and no Mortgage Loan secured by a second lien on the related
Mortgaged Property had a Combined Loan-to-Value Ratio at origination in
excess of 100%.
(xi) Each Mortgage Loan is secured by a valid and enforceable first
or 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) only in the case of each
Mortgage Loan which is secured by a valid and enforceable second lien on
the Mortgaged Property, any senior mortgage loan secured by such
Mortgaged Property and identified in the Mortgage File related to such
Mortgage Loan. Approximately 100% of the Mortgage Loans are first liens.
Approximately 0% of the Mortgage Loans were secured by second liens on
the related Mortgaged Properties.
(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,
II-11
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.
(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 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, the Mortgage Loans
complied at origination in all material respects with applicable state
and federal laws, including, without limitation, usury, equal credit
opportunity, real estate settlement procedures, truth-in-lending and
disclosure laws, and consummation of the transactions contemplated hereby
will not involve the violation of any such 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 Xxx 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
II-12
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. 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.
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(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.
(xxix) The origination, underwriting, servicing and collection
practices used by the Seller with respect to each Mortgage Loan have been
in all respects legal, proper, prudent and customary in the mortgage
lending and servicing business, as conducted by prudent lending
institutions which service mortgage loans of the same type in the
jurisdiction in which the Mortgaged Property is located.
(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) No more than approximately 5.28% of the Mortgage Loans are
secured by two- to four-family dwellings. No more than approximately
4.81% of the Mortgage Loans are secured by low rise condominium units. No
more than approximately 0.35% of the Mortgage Loans are secured by high
rise condominium units. No less than approximately 78.54% of the Mortgage
Loans are secured by single family detached dwellings. No more than
approximately 0.60% of the Mortgage Loans are secured by manufactured
housing. No more than approximately 9.88% of the Mortgage Loans are
secured by PUDs.
(xxxiv) No Mortgage Loan had a principal balance in excess of
$650,000 at origination.
(xxxv) To the extent required under applicable law, each originator
and subsequent mortgagee or servicer of the Mortgage Loan complied with
all licensing requirements and was authorized to transact and do business
in the jurisdiction in which the related Mortgaged Property is located at
all times when it held or serviced the Mortgage Loan. Any and all
requirements of any federal, state or local laws or regulations,
including,
II-14
without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, anti-predatory lending, fair
credit reporting, unfair collection practice, equal credit opportunity,
fair housing and disclosure laws and regulations, applicable to the
solicitation, origination, collection and servicing of such Mortgage Loan
have been complied with in all material respects; and any obligations of
the holder of the Mortgage Note, Mortgage and other loan documents have
been complied with in all material respects; servicing of each Mortgage
Loan has been in accordance with prudent mortgage servicing standards,
any applicable laws, rules and regulations and in accordance with the
terms of the Mortgage Notes, Mortgage and other loan documents, whether
such origination and servicing was done by Seller, its affiliates, or any
third party which originated the Mortgage Loan on behalf of, or sold the
Mortgage Loan to, any of them, or any servicing agent of any of the
foregoing;
(xxxvi) Each Mortgage Loan was originated on or after May 22, 2000;
(xxxvii) Each Two-Year Hybrid Mortgage Loan had an initial
Adjustment Date no later than August 1, 2004; each Three-Year Hybrid
Mortgage Loan had an initial Adjustment Date no later than August 1,
2005.
(xxxviii) [Reserved]
(xxxix) Approximately 90.02% 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, no more than approximately 4.73% of the Mortgage
Loans are secured by investor properties, and no less than approximately
95.07% of the owner-occupied Mortgage Loans are secured by owner-occupied
Mortgaged Properties that are primary residences and no more than
approximately 0.20% 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 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
II-15
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 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,
or, if a Mortgage Loan is being serviced by the originator of such
Mortgage Loan, the Master Servicer and the originator have agreed to
transfer the servicing of such Mortgage Loan on or prior to October 1,
2002.
(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 were underwritten in all material respects in
accordance with customary and prudent underwriting guidelines generally
used by originators of B and C 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 5.36% per annum to 15.125% per annum and the
weighted average Mortgage Rate as of the Cut-off Date was 8.6223% per
annum.
(liv) [Reserved]
(lv) The Mortgage Loans were selected from among the outstanding
one- to four-family mortgage loans in the Seller'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) The Gross Margins on the Adjustable Rate Mortgage Loans that
are Mortgage Loans range from approximately 1.21% to 11.85% and the
weighted average Gross Margin was approximately 6.9971%.
II-17
(lvii) Each Mortgage Loan has a payment date on or before the Due
Date in the month of the first Distribution Date.
(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) [Reserved]
(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
nor is any Mortgage Loan a "mortgage" as defined in 15 U.S.C. ss.
1602(aa).
(lxv) Each Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union, insurance
company, or mortgage banking company which is supervised and examined by
a federal or state authority, or by a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to Sections 2.03 and 2.11 of
the National Housing Act.
(lxvi) Each Mortgage Loan was (A) originated no earlier than six
months prior to the time the Seller purchased such Mortgage Loan pursuant
to a mortgage loan purchase agreement or other similar agreement and (B)
underwritten or reunderwritten by the Seller in accordance with the
Seller's underwriting guidelines in effect at the time the loan was
underwritten or reunderwritten, as applicable.
(lxvii) 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 nor is any Mortgage Loan a "mortgage" as defined in 15 U.S.C. ss.
1602(aa).
(lxviii) Each Mortgage Loan was originated in compliance with the
following anti-predatory lending guidelines:
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(i) No borrower was encouraged or required to select a Mortgage Loan
product offered by the Mortgage Loan's originator which is a higher cost
product designed for less creditworthy borrowers, unless at the time of the
Mortgage Loan's origination, such borrower did not qualify taking into account
credit history and debt-to-income ratios for a lower-cost credit product then
offered by the Mortgage Loan's originator or any affiliate of the Mortgage
Loan's originator. If, at the time of loan application, the borrower may have
qualified for a for a lower-cost credit product then offered by any mortgage
lending affiliate of the Mortgage Loan's originator, the Mortgage Loan's
originator referred the borrower's application to such affiliate for
underwriting consideration;
(ii) The methodology used in underwriting the extension of credit
for the each Mortgage Loan employs objective mathematical principles which
relate the borrower's income, assets and liabilities to the proposed payment
and such underwriting methodology does not rely on the extent of the
borrower's equity in the collateral as the principle determining factor in
approving such credit extension. Such underwriting methodology confirmed that
at the time of origination (application/approval) the borrower had a
reasonable ability to make timely payments on the Mortgage Loan;
(iii) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity: (i)
prior to the loan's origination, the borrower agreed to such premium in
exchange for a monetary benefit, including but not limited to a rate or fee
reduction, (ii) prior to the loan's origination, the borrower was offered the
choice of another mortgage product that did not require payment of such a
premium, (iii) the prepayment premium is disclosed to the borrower in the loan
documents pursuant to applicable state and federal law, and (iv)
notwithstanding any state or federal law to the contrary, Servicer shall not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the borrower's default in making the loan
payments;
(iv) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining
the extension of credit. No borrower obtained a prepaid single-premium credit
life, disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan;
(v) No Mortgage Loan is subject to the Home Ownership and Equity
Protection Act of 1994 (15 USC ss. 1602(aa)), Regulation Z (12 CFR 226.32) or
any similar state law or regulation including those relating to "high cost
mortgages" and "high LTV mortgages";
(vi) All points and fees related to each Mortgage Loan were
disclosed in writing to the borrower in accordance with applicable state and
federal law. Except in the case of a Mortgage Loan in an original principal
amount of less than $60,000 which would have resulted in an unprofitable
origination, no borrower was charged "points and fees" (whether or not
financed) in an amount greater than 5% of the principal amount of such loan,
such 5% limitation calculated in accordance with the Lender Letter;
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(vii) All fees and charges (including finance charges) and whether
or not financed, assessed, collected or to be collected in connection with the
origination and servicing of each Mortgage Loan has been disclosed in writing
to the borrower in accordance with applicable state and federal law and
regulation; and
(lxix) If the Mortgage Loan provides that the interest rate on the
principal balance of the related Mortgage Loan may be adjusted, all of
the terms of the related Mortgage pertaining to interest rate
adjustments, payment adjustments and adjustments of the outstanding
principal balance have been made in accordance with the terms of the
related Mortgage Note and applicable law and are enforceable and such
adjustments will not affect the priority of the Mortgage lien;
(lxx) The Mortgaged Property complies with all applicable laws,
rules and regulations relating to environmental matters, including but
not limited to those relating to radon, asbestos and lead paint and
neither the Seller nor, to the Seller's knowledge, the Mortgagor, has
received any notice of any violation or potential violation of such law;
(lxxi) There is no action, suit or proceeding pending, or to the
best of Seller's knowledge, threatened or likely to be asserted with
respect to the Mortgage Loan against or affecting Seller before or by any
court, administrative agency, arbitrator or governmental body;
(lxxii) No action, inaction, or event has occurred and no state of
fact exists or has existed that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable
hazard insurance policy, irrespective of the cause of such failure of
coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by
Seller or any designee of Seller or any corporation in which Seller or
any officer, director, or employee had a financial interest at the time
of placement of such insurance;
(lxxiii) Each Mortgage Loan has a fully assignable life of loan tax
service contract which may be assigned without the payment of any fee;
(lxxiv) No Mortgagor has notified the Seller, and the Seller has no
knowledge, of any relief requested or allowed to a Mortgagor under the
Relief Act;
(lxxv) No Mortgage Loan is subject to the City of Oakland
Anti-Predatory Lending Ordinance (i.e. the Oakland Residential Lending
Ordinance No. 12361 C.M.S., the amendment No. 12362 C.M.S. to Oakland's
Linked Banking Services Ordinance and Resolution 01-62 of the Oakland
Redevelopment Agency, collectively the "Oakland Ordinance") except as
identified on the Mortgage Loan Schedule. Any Mortgage Loan subject to
the Oakland Ordinance is in compliance with the provisions of the Oakland
Ordinance;
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(lxxvi) No predatory or deceptive lending practices, including but
not limited to, the extension of credit to the Mortgagor without regard
for the Mortgagor's ability to repay the Mortgage Loan and the extension
of credit to the Mortgagor which has no apparent benefit to the
Mortgagor, were employed by the originator of the Mortgage Loan in
connection with the origination of the Mortgage Loan; and
(lxxvii) The information set forth in the Prepayment Charge Schedule
with respect to each Mortgage Loan is complete, true and correct in all
material respects at the date or dates respecting which such information
is furnished and each Prepayment Charge is permissible and enforceable in
accordance with its terms under applicable law upon the Mortgagor's full
and voluntary principal prepayment (except to the extent that: (1) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally; or (2) the collectibility thereof may be limited due to
acceleration in connection with a foreclosure or other involuntary
prepayment).
In addition to the foregoing representations and warranties, the Seller hereby
represents and warrants to the Depositor, the Master Servicer and the Trustee
that as of the Closing Date, each Mortgage Loan is in compliance with
applicable federal and state laws and regulations.
(c) Upon discovery by any of the parties hereto 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 a breach of
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 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 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
M. Any Representing Party liable for a breach under this Section 2.03 shall
promptly reimburse the Master Servicer and the Trustee for any expenses
reasonably incurred by the Master Servicer 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
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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 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
Co-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 case of Actuarial Mortgage Loans) in the
month of substitution) of all such Deleted Mortgage Loans. An amount equal to
the aggregate of the
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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 3.08 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 Co-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 or the Trustee.
(d) The representations and warranties set forth in Section 2.03 hereof
shall survive delivery of the respective Mortgage Files to the Co-Trustee for
the benefit of the Certificateholders.
Section 2.04. Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Seller, the Master
Servicer 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
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generally and (ii) general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at law.
(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 and thereof.
(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, that 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 Co-Trustee. Upon discovery by the Depositor 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
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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).
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 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 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 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.
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Section 2.07. Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor, the Seller and the
Trustee as follows:
(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 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 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 Trust Fund or the Certificateholders in any Mortgage Loan or
the rights and interests of the Depositor and the Trustee under this
Agreement. The Master Servicer shall represent and protect the interest of the
Trust Fund 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 cause the
Trust Fund 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 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
III-1
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 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. 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 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 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.
(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
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Loan and (ii) extend the due dates for payments due on a Mortgage Note for a
period not greater 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 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 Liquidation Proceeds, other than proceeds to be applied to
the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Master Servicer's normal servicing
procedures;
(iv) all Compensating Interest;
(v) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments;
(vi) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.10 hereof;
(vii) the Purchase Price and any Substitution Adjustment Amount;
(viii) all Advances made by the Master Servicer pursuant to Section
4.01;
(ix) the Seller Shortfall Interest Requirement;
(x) all Prepayment Charges collected; and
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(xi) 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 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.
(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) [Reserved];
(iii) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments;
(iv) [Reserved];
(v) [Reserved]; and
(vi) any amounts received under the Cap Contract, including amounts,
if any, received by the Master Servicer as provided in Section 3.19.
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
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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) No later than 1:00 p.m. Pacific time on the Business Day prior to the
Master Servicer Advance Date in September 2002, 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.
(e) 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
$1,751.42. The Principal Reserve Fund shall be treated as an "outside reserve
fund" under applicable Treasury regulations and shall not be part of the
REMIC. Any investment earnings on the Principal Reserve Fund shall be treated
as owned by the Seller and will be taxable to the Seller. On the Business Day
before the Distribution Date occurring in September 2002, the Trustee shall
transfer from the Principal Reserve Fund to the Distribution Account the funds
on deposit in the Principal Reserve Fund (net of any investment earnings on
deposit in the Principal Reserve Fund, which shall be transferred to the
Seller) 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.
(f) Each institution that maintains the Certificate Account, the
Distribution Account or the Principal Reserve Fund 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 Principal 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 Principal 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. 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 Principal Reserve Fund, all income and gain
net of any losses realized from any such investment shall be for the benefit
of the Seller and shall be remitted to the Seller 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. The amount of any losses incurred in the Principal Reserve Fund in
respect of any such investments shall be paid by the Seller to the Trustee for
deposit into the Principal Reserve Fund out of the Seller's own funds
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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, the Carryover Reserve Fund or the Principal Reserve
Fund and made in accordance with this Section 3.05 (or in the case of the
Carryover Reserve Fund, Section 4.08).
(g) The Master Servicer shall give at least 30 days advance notice to the
Trustee, the Seller, each Rating Agency 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 and the Depositor of any proposed change of the
location of the Distribution Account, the Carryover Reserve Fund or Principal
Reserve Fund prior to any change thereof.
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 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.
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Upon reasonable advance notice in writing if required by federal
regulation, the Master Servicer will provide to each Certificateholder 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 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 each such Certificateholder 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) 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 reimburse the Master Servicer for any Nonrecoverable
Advance previously made;
(iv) to reimburse the Master Servicer from Insurance Proceeds for
Insured Expenses covered by the related Required Insurance Policy;
(v) 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 (v) 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;
(vi) to pay to the Seller, the Depositor 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
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taken into account in determining the related Stated Principal Balance of
such repurchased Mortgage Loan;
(vii) 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;
(viii) to withdraw pursuant to Section 3.05 any amount deposited in
the Certificate Account and not required to be deposited therein; and
(ix) 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 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.
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),
(iv), (v) and (vi) above. Prior to making any withdrawal from the Certificate
Account pursuant to subclause (iii), the Master Servicer shall deliver to the
Trustee 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 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 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) [reserved];
(iii) to pay the Trustee the Trustee Fee on each Distribution Date;
(iv) 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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(v) 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. [Reserved.]
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 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
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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.
(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
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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, the Maximum Mortgage Rate, the Minimum Mortgage Rate, the Gross
Margin, the Periodic Rate Cap, the Adjustment Date 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 that
any such substitution or assumption agreement has been completed by forwarding
to the Co-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 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
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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
shall have been supplied with an Opinion of Counsel (such opinion not to be an
expense of the Trustee) to the effect that the holding by the Trust Fund of
such Mortgaged Property subsequent to such three-year period will not result
in the imposition of taxes on "prohibited transactions" of 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, 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
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
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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,
for the related Prepayment Period.
(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 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 Certificate Account and
the Trustee, upon receipt of such deposit and a Request for Release from
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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.
Section 3.13. Co-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 purposes, the Master Servicer will promptly notify
the Co-Trustee by delivering a Request for Release substantially in the form
of Exhibit N. Upon receipt of such request, the Co-Trustee shall promptly
release the related Mortgage File to the Master Servicer, and the Co-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 Co-Trustee shall, upon
delivery to the Co-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 Co-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 Co-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
III-15
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 Co-Trustee to be
returned to the Co-Trustee within 21 calendar days after possession thereof
shall have been released by the Co-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 Co-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.
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 Co-Trustee 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 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
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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 Excess Proceeds,
assumption fees, late payment charges, Prepayment Interest Excess, and all
income and gain net of any losses realized from Permitted Investments 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.
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
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 and the Trustee on or
before the 120th day after the end of the Master Servicer's fiscal year,
commencing with its 2002 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.
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Section 3.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
On or before the later of (i) the 120th day after the end of the Master
Servicer's fiscal year, commencing with its 2002 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 2002, 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, Depositor 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, for so long as Countrywide
Home Loans Servicing LP is the Master Servicer hereunder, the Master
Servicer's parent company's publicly available annual financial statements),
if any, promptly after they become available.
Section 3.19. The Cap Contract.
The Seller shall assign all of its right, title and interest in and to
the interest rate cap transactions evidenced by, respectively, the
Confirmation And Agreement 1 and the Confirmation And Agreement 2 to, and
shall cause all of its obligations in respect of each such transaction to be
assumed by, the Trustee on behalf of the Trust Fund, on the terms and
conditions set forth in the Cap Contract Assignment Agreement. The Cap
Contract will be an asset of the Trust Fund but will not be an asset of any
REMIC. The Master Servicer, on behalf of the Trustee, shall deposit any
amounts received from time to time with respect to the Cap Contract into the
Distribution Account.
The Master Servicer, on behalf of the Trustee, shall prepare and deliver
any notices required to be delivered under the Cap Contract.
The Master Servicer, on behalf of the Trustee, shall act as calculation
agent and/or shall terminate the Cap Contract, in each case upon the
occurrence of certain events of default or termination events to the extent
specified thereunder. Upon any such termination, the Cap Contract Counterparty
will be obligated to pay the Trustee or the Master Servicer for the benefit of
the Trust Fund an amount in respect of such termination. Any amounts received
by the Trustee or the Master Servicer for the benefit of the Trust Fund, as
the case may be, in respect of such termination shall be deposited and held in
the Distribution Account to pay Net Rate Carryover for the Certificates (by
deposit of the amount of any such Net Rate Carryover in the Carryover Reserve
Fund for payment to the related Certificateholders) as provided in Section
4.04(a) on Distribution Dates following such termination to and including the
Cap Contract Termination Date. On the Cap Contract Termination Date, after all
other distributions on such date, if any such amounts in respect of early
termination remain in the Carryover Reserve Fund, such amounts shall be
distributed by the Trustee to the Class X Certificateholder.
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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 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 Trust Fund 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, to the extent of one-half of
the Servicing Fee for such Distribution Date, deposit into the Certificate
Account, as a reduction of the Servicing Fee (but not in excess of one-half
thereof) for such Distribution Date, no later than the close of business on
the Business Day immediately preceding such Distribution Date, an amount equal
to the Prepayment Interest Shortfall; and in case of such deposit, the Master
Servicer shall not be entitled to any recovery or reimbursement from the
Depositor, the Trustee, the Trust Fund 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) to the Class A Certificates, the Current Interest and any
Interest Carry Forward Amount for such Class;
(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 Class B-1 Certificates, the Current Interest and any
Interest Carry Forward Amount for such Class;
(v) any remainder, as part of the Excess Cashflow.
(b) On each Distribution Date on or prior to the Cap Contract Termination
Date, amounts received in respect of the Cap Contract for such Distribution
Date will be withdrawn from the Distribution Account and deposited in the
Carryover Reserve Fund to be distributed to each Class of Certificates (other
than the Class A-R, Class X and Class N Certificates) to the extent of any Net
Rate Carryover for such Class of Certificates for such Distribution Date
sequentially to the Class A, Class M-1, Class M-2 and Class B-1 Certificates,
and any remaining amounts shall be distributed to the Class X
Certificateholder; provided, however, that if the Cap Contract is subject to
early termination, early termination payments shall be held by the Trustee
until the Cap Contract Termination Date and deposited in the Carryover Reserve
Fund, as necessary, to pay any Net Rate Carryover as provided in Section 3.19.
(c) On each Distribution Date, after payment of the amounts received on
the Cap Contract as provided in Section 4.04(b) above, amounts on deposit in
the Carryover Reserve Fund (after deposits therein as provided in Section
4.04(e)(ii)) shall be allocated by the Trustee to each Class of Certificates
(other than the Class A-R, Class X and the Class N Certificates) to the extent
of any remaining Net Rate Carryover for such Class of Certificates for such
Distribution Date as provided in Section 4.04(e)(ii).
(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:
(i) with respect to any Distribution Date prior to the Stepdown Date
or as to which a Trigger Event is in effect:
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(A) to the Class A-R Certificates, until the Certificate Principal
Balance thereof is reduced to zero;
(B) to the Class A Certificates, until the Certificate Principal
Balance thereof is reduced to zero;
(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;
(E) to the Class B-1 Certificates, until the Certificate Principal
Balance thereof is reduced to zero;
(F) any remainder, as part of the Excess Cashflow to the Class A-R
Certificates.
(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, until the Certificate Principal Balance thereof is reduced to
zero;
(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;
(D) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount, until the Certificate Principal Balance thereof is
reduced to zero; and
(E) any remainder, as part of the Excess Cashflow.
(e) With respect to any Distribution Date, any Excess Cashflow will be
paid to the classes of Certificates as follows:
(i) to the holders of the Classes of Offered Certificates then
entitled to receive distributions in respect of principal, in an amount
equal to the Extra Principal Distribution Amount, payable to such holders
as part of the Principal Distribution Amount pursuant to Section 4.04(d)
above;
(ii) from any remaining Excess Cashflow to the Carryover Reserve
Fund in an amount needed to pay any remaining unpaid Net Rate Carryover
for each Class of Offered Certificates (other than the Class A-R
Certificates) (after application of amounts received on the Cap Contract
to pay Net Rate Carryover as provided in Section 4.04(b));
IV-3
and then to pay such amount from the Carryover Reserve Fund, sequentially
to the Class A, Class M-1, Class M-2 and Class B-1 Certificates in amount
equal to such Net Rate Carryover for each such Class;
(iii) from any remaining Excess Cashflow, to the Class A
Certificates in an amount equal to any remaining unpaid Interest Carry
Forward Amount for such Class;
(iv) from any remaining Excess Cashflow, to the Class M-1
Certificates in an amount equal to any remaining unpaid Interest Carry
Forward Amount for such Class;
(v) from any remaining Excess Cashflow, to the Class M-1
Certificates in an amount equal to the Unpaid Realized Loss Amounts for
the such Class;
(vi) from any remaining Excess Cashflow, to the Class M-2
Certificates in an amount equal to any remaining unpaid Interest Carry
Forward Amount for such Class;
(vii) from any remaining Excess Cashflow, to the Class M-2
Certificates in an amount equal to the Unpaid Realized Loss Amounts for
such Class;
(viii) from any remaining Excess Cashflow, to the Class B-1
Certificates in an amount equal to any remaining unpaid Interest Carry
Forward Amount for such Class;
(ix) from any remaining Excess Cashflow, to the Class B-1
Certificates in an amount equal to the Unpaid Realized Loss Amounts for
such Class;
(x) from any remaining Excess Cashflow, to the Carryover Reserve
Fund, in an amount equal to the Secondary Carryover Reserve Fund Deposit;
(xi) from any remaining Excess Cashflow, to the Class N
Certificates, (x) the Current Interest for such Class, (y) the Interest
Carry Forward Amount for such Class and (z) any remaining Excess Cashflow
shall be paid to the Class N Certificates to reduce the Class N Notional
Amount, until the Class N Notional Amount has been reduced to zero;
(xii) to the Class X Certificates, the Class X Distributable Amount;
and
(xiii) any remaining Excess Cashflow, to the Class A-R Certificates.
(f) On each Distribution Date, an amount equal to all Prepayment Charges
received during the related Prepayment Period will be distributed first, to
the holders of the Class N Certificates, and second, after the Class N
Notional Amount has been reduced to zero, to the Class X Certificateholders.
(g) To the extent that a Class of Certificates (other than the Class A-R,
the Class X and Class N Certificates) receives interest in excess of the Net
Rate Cap, 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. For purposes of the Code, amounts deemed deposited
IV-4
to the Carryover Reserve Fund pursuant to this clause shall be deemed to have
been distributed first with respect to the Class IO Certificate, then with
respect to the Class SA Interest, and then with respect to the Class X
Certificateholders.
(h) [reserved]
(i) On each Distribution Date, the Trustee shall allocate the
Applied Realized Loss Amount to reduce the Certificate Principal Balances
of the Certificates in the following order of priority:
(i) to the Class B-1 Certificates until the Class B-1 Certificate
Principal Balance is reduced to zero;
(ii) to the Class M-2 Certificates until the Class M-2 Certificate
Principal Balance is reduced to zero; and
(iii) to the Class M-1 Certificates until the Class M-1 Certificate
Principal Balance is reduced to zero.
(j) 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.
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 make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Trustee shall, not later than 9:00 a.m. Pacific time on the Master Servicer
Advance Date, other than any Master Servicer Advance Date relating to any
Distribution Date on which the proceeds of any Optional Termination are being
distributed, (i) furnish by telecopy a statement to the Master Servicer (the
information in such statement to be made available to Certificateholders by
the Trustee on request) setting forth the Interest Funds and Principal Funds
for such Distribution Date and the amount to be withdrawn from the
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Certificate Account and (ii) determine (and notify the Master Servicer by
telecopy of the results of such determination) the amount of Advances to be
made by the Master Servicer in respect of the related Distribution Date;
provided that no Advance shall be made if it would be a Nonrecoverable
Advance; provided further that any failure by the Trustee to notify the Master
Servicer will not relieve the Master Servicer from any obligation to make any
such Advances. 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 and the
Depositor 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 (i) to 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 Balances 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 September 2002 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;
(x) the cumulative amount of Applied Realized Loss Amounts to date;
(xi) [Reserved];
IV-6
(xii) 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;
(xiii) 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;
(xiv) 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;
(xv) the aggregate Stated Principal Balances of all Liquidated
Loans;
(xvi) with respect to any Liquidated Loan, the loan number and
Stated Principal Balance relating thereto;
(xvii) whether a Trigger Event has occurred;
(xviii) any Net Rate Carryover paid on each Class of Certificates
(other than the Class A-R, the Class X and Class N Certificates) and any
remaining Net Rate Carryover remaining on each Class of Certificates
(other than the Class A-R, Class X and Class N Certificates) on such
Distribution Date;
(xix) the amount of Prepayment Charges collected or waived by the
Master Servicer;
(xx) [reserved];
(xxi) [reserved]; and
(xxii) the amount, if any, received under the Cap Contract for such
Distribution Date.
(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
IV-7
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.
(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.
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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. On the Closing Date, the Seller shall remit $10,000 to
the Trustee, who shall deposit said funds in 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.
(b) The Trustee shall make withdrawals from the Carryover Reserve Fund to
make distributions pursuant to paragraphs (b), (c) and (e) of Section 4.04
hereof. Any amounts remaining after the distributions required pursuant to
preceding sentence shall be first maintained in the Carryover Reserve Fund up
to an amount equal to the Secondary Carryover Reserve Fund Deposit, and
second, distributed to the Class X Certificates; provided, however, that if
the Cap Contract is subject to early termination, early termination payments
received on such Cap Contract will be held by the Trustee until the Cap
Contract Termination Date and deposited in the Carryover Reserve Fund as
necessary to cover any Net Rate Carryover on the Certificates entitled thereto
on future Distribution Dates.
(c) Funds in the Carryover Reserve Fund may be invested in Permitted
Investments. Any earnings on such amounts shall be payable to the Class X
Certificates. The Class X 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 X
Certificates in the same manner as if distributed pursuant to Section 4.04(f)
hereof.
Section 4.09. [reserved].
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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-9, 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 $20,000 $1,000 $421,250,000
A-R $99.95(2) N.A. $100
M-1 $20,000 $1,000 $28,750,000
M-2 $20,000 $1,000 $27,500,000
B-1 $20,000 $1,000 $22,500,000
X X/X X/X X/X
X X/X X/X $35,000,000(1)
(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.
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 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
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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 a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such
Certificateholder's prospective transferee shall each certify to the Trustee
in writing the facts surrounding the Transfer in substantially the forms set
forth in Exhibit J (the "Transferor Certificate") and (i) deliver a letter in
substantially the form of either Exhibit K (the "Investment Letter") or
Exhibit L (the "Rule 144A Letter") or (ii) there shall be delivered to the
Trustee at the expense of the Certificateholder desiring to effect such
transfer an Opinion of Counsel that such Transfer may be made pursuant to an
exemption from the Securities Act. The Depositor shall provide to any Holder
of a Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee, the Co-Trustee and
the Master Servicer shall cooperate with the Depositor in providing the Rule
144A information referenced in the preceding sentence, including providing to
the Depositor such information regarding the Certificates, the Mortgage Loans
and other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such Transfer shall, and does
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hereby agree to, indemnify the Trustee, the Co-Trustee, the Depositor, the
Seller and the Master Servicer against any liability that may result if the
Transfer is not so exempt or is not made in accordance with such federal and
state laws.
No Transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Trustee (in the event such Certificate is a Private Certificate that is a
Definitive Certificate, such requirement is satisfied only by the Trustee's
receipt of a representation letter from the transferee substantially in the
form of Exhibit K or Exhibit L, or in the event such Certificate is a Class
A-R 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, nor a Person acting on behalf of any such
plan or arrangement or using the assets of any such plan or arrangement to
effect such transfer, or (ii) in the case of a Certificate that is an
ERISA-Restricted Certificate and 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 subject to ERISA, or a
plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan or arrangement, or using such
plan's or arrangement's assets, an opinion of counsel satisfactory to the
Trustee, which opinion of counsel shall not be an expense of either the
Trustee or the Trust Fund, addressed to the Trustee to the effect that the
purchase and holding of such ERISA-Restricted Certificate will not result in a
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of the Code and will not subject the Trustee to any obligation in addition to
those expressly undertaken in this Agreement or to any liability. For purposes
of the preceding sentence, with respect to an ERISA-Restricted Certificate
that is not a Book-Entry Certificate or a Class A-R Certificate, in the event
the representation letter referred to in the preceding sentence is not so
furnished, such representation shall be deemed to have been made to the
Trustee by the transferee's (including an initial acquiror's) acceptance of
such ERISA-Restricted Certificate. Notwithstanding anything else to the
contrary herein, any purported transfer of an ERISA-Restricted Certificate to
or on behalf of an employee benefit plan subject to ERISA or the Code without
the delivery to the Trustee of an opinion of counsel satisfactory to the
Trustee as described above shall be void and of no effect.
To the extent permitted under applicable law (including, but not limited
to, ERISA), the Trustee shall be under no liability to any Person for any
registration of Transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action
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with respect to such Holder under the provisions of this Agreement so long as
the Transfer was registered by the Trustee in accordance with the foregoing
requirements.
(c) Each Person who has or who acquires any Ownership Interest in a Class
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 representation letters 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, Transferor
Certificate and either the Rule 144A Letter or the Investment Letter. The
Trustee shall be entitled but not obligated to recover from any Holder of
a Class 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
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recovered by the Trustee shall be paid and delivered by the Trustee to
the last preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of
a Transfer of an Ownership Interest in a Class 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 Trust Fund, the Trustee, the
Seller or the Master Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder to fail to qualify as a REMIC
at any time that the Certificates are outstanding or result in the imposition
of any tax on the Trust Fund, a Certificateholder or another Person. Each
Person holding or acquiring any Ownership Interest in a 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 representation letters and
opinions referred to above in this Section 5.02 in connection with any
Transfers shall be at the expense of the parties to such Transfers.
(e) The beneficial ownership of the Class N Certificates and the Class X
Certificates shall not be transferred to a Non-United States Person unless
such beneficial ownership is transferred to a Non-United States Person who
will at all times be a Proportionate Holder. Neither the Class N nor the Class
X Certificate shall be pledged or used as collateral for any other obligation
if it would cause any portion of the Trust to be treated as a taxable mortgage
pool under Section 7701(i) of the Code. These restrictions on transfers of a
Class X and Class N Certificates set forth in this Section 5.02(e) shall cease
to apply (and the applicable portions of any legend on a Class X or Class N
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 to the Trustee, the Seller or the Master Servicer to the effect
that the elimination of such restrictions will not cause any constituent REMIC
of 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 or tax
reporting obligation on the Trust Fund, a Certificateholder or another Person.
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
V-5
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 (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders 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 at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The
Depositor and every Certificateholder, by receiving and holding a Certificate,
agree that the Trustee shall not be held accountable by reason of the
disclosure of any such information as to the list of the Certificateholders
hereunder, regardless of the source from which such information was derived.
Section 5.06. 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
V-6
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.
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.
V-7
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.
Each of the Depositor and the Seller 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 Trust Fund 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
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Depositor, 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. 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
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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, the Seller 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 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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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 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 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 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
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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, 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
each Certificateholder. 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 maintain in force the policy or policies that the Master
Servicer is required to maintain pursuant to Section 6.05.
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,
VII-3
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 and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
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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 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 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 in its commercial capacity as issuer of the investment security);
VIII-2
(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
(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, pursuant to the
provisions of this Agreement, unless such Certificateholders 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
VIII-3
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 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
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
VIII-4
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 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 or the Master
Servicer may remove the Trustee and appoint a successor trustee by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the 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 such
Holders 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 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 all
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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 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 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 shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in the case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the power
to make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) 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 jointly (it being understood that
such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights,
VIII-6
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,
but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the 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 and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11. Tax Matters.
It is intended that the Trust Fund shall constitute, and that the affairs
of the Trust Fund shall be conducted so that the Master REMIC, the Underlying
REMIC and the Stand-Alone REMIC each 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
VIII-7
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, 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
VIII-8
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, omissions 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.
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 B-1 Certificates (pro rata), second, to
the Class M-2 Certificates (pro rata), third, to the Class M-1 Certificates
(pro rata), and fourth, to 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 rights of the Class A, Class M-1, Class M-2
and Class B-1 Certificateholders to receive payments from the Carryover
Reserve Fund as rights in an interest rate cap contract written by the Cap
Contract Counterparty with respect to the Net Rate Carryover funded by the Cap
Contract and Excess Cashflow, in favor of the Certificateholders (other than
the Holders of the Class A-R, Class X and Class N Certificates). Thus, each
Certificate (other than the Class A-R, Class X and Class N Certificates) shall
be treated as representing ownership of not only Master REMIC Regular
Interests, but also ownership of an interest in an interest rate cap contract.
For purposes of determining the issue price of the Master REMIC Regular
interests, the Trustee shall assume that the interest rate cap contract has a
value of $10,000.
In the event that any Person holds pro rata shares of the ownership of
the Class N Certificates and the Class X Certificates (a "Proportionate
Holder"), the Trustee shall treat such
VIII-9
Person as the holder of the ownership of the same pro-rata share of the Class
SA Interest. In the event that any Person holds non-pro rata shares of the
ownership of the Class N Certificates and the Class X Certificates (a
"Disproportionate Holder"), the Trustee shall treat such Person, and all other
Disproportionate Holders, as partners in a partnership that owns the Class SA
Interest (other than the shares of the Class SA Interest held by any
Proportionate Holders) for federal income tax purposes and shall not treat the
Class N and Class X Certificates held by the Disproportionate Holders as
interests in any REMIC created hereunder. By acquiring the Class N
Certificates and the Class X Certificates, the respective Holders will agree
to treat the Class N Certificates and the Class X Certificates in the manner
described in the preceding sentences for federal income tax purposes. In the
event the second sentence of this paragraph applies, (i) a separate capital
account shall be established and maintained for each Holder of a Class N or
Class X Certificate in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv), which shall be credited with income or gain and debited by
any expenses or losses and distributions allocable to such Certificates, (ii)
the Class N Certificates shall be allocated income in an amount equal to
interest at the Pass-Through Rate thereon and any original issue discount that
would be reportable thereon if the Class N Certificate were a debt instrument
issued on the date ownership of the Class N and Class X Certificates is
separated, with a principal balance equal to the Class N Notional Amount,
(iii) the Class X and Class N Certificates shall be allocated income with
respect to all Prepayment Charges (including amounts in connection with the
full or partial waiver of such Prepayment Charges or premiums pursuant to
Section 2.03) in accordance with the allocation of such amounts pursuant to
Section 4.04, (iv) the Class X and Class N Certificates shall be allocated
accruals (under any reasonable method) of any "cap premiums" deemed received
on the date ownership of the Class X and Class N Certificates is separated in
respect of the obligation of the Class SA Interest to pay Net Rate Carryover,
and shall be allocated expense in respect of any actual payment of such Net
Rate Carryover based on which one of such Classes economically bears such
expense, (v) the Class X Certificates shall be allocated all remaining income
and any expenses and Realized Losses with respect to the Class SA Interest,
until the capital account of the Class X Certificates is reduced to zero, and
any remaining expenses or losses shall be allocated to the Class N
Certificates, (vi) neither the Class N Certificates nor the Class X
Certificates shall be responsible for restoring any deficit to its capital
account, (vii) upon termination of the Trust Fund pursuant to Article X, all
amounts available for distribution to Holders of the Class N and Class X
Certificates shall be distributed in accordance with their positive capital
account balances, first to the Class N Certificates until the Class N Notional
Amount and any accrued but unpaid interest thereon are reduced to zero, and
then to the Class X Certificates, and (viii) the Trustee shall maintain books
and records with respect to the partnership on a calendar year basis (unless a
different taxable year shall be required by the Code) and shall prepare or
cause to be prepared, and cause the Holder of the largest Percentage Interest
of the Class X Certificates to sign and file or cause to be filed all federal
and state tax and information returns for the partnership, and shall furnish
or cause to be furnished Schedule K-1's to the Holders of the Class N and
Class X Certificates at the time required by the Code. Unless otherwise
directed by a majority of the Percentage Interests of the Class X and Class N
Certificates, the Trustee shall not make an election under Section 754 of the
Code. The Holder of the largest Percentage Interest of the Class X
Certificates, by acceptance of its Class X Certificate, agrees to act as "tax
matters partner" (within the meaning of Section 6231(a)(7) of
VIII-10
the Code and to sign and timely file all federal and state partnership tax and
information returns prepared by the Trustee pursuant to this Section 8.11.
Section 8.12. Co-Trustee.
(a) The Co-Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Co-Trustee 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
required by this Agreement. If any such instrument is found not to conform to
the requirements of this Agreement in a material manner, the Co-Trustee shall
take action as it deems appropriate to have the instrument corrected.
(b) 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 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;
VIII-11
(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
(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 or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Co-Trustee's execution and authentication of the
Certificates. The Co-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.
(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
VIII-12
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 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 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 8.12 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.
(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 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 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.
VIII-13
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 purchase by the Majority Holder of the Class X Certificate (or if such
Holder does not elect to exercise such purchase option, 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 Mortgage Rate (or, if such
repurchase is effected by the Master Servicer, 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 and (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 (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, as applicable. 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 right to purchase all Mortgage Loans and REO Properties by the
Majority Holder of the Class X Certificates or the Master Servicer (the party
exercising such purchase option, the "Terminator") pursuant to clause (a)
above shall be conditioned upon the Stated Principal Balance of the Mortgage
Loans, at the time of any such repurchase, aggregating (a) in the case of
purchase by the Majority Holder of the Class X Certificate, ten percent (10%)
or less and (b) in the case of purchase by the Master Servicer, five percent
(5%) 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 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
IX-1
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 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 Co-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) 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.
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
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
IX-2
Certificates shall not have been surrendered for cancellation, the Class A-R
Certificates 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 has 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.
IX-3
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 and the Trustee, without the consent of any of the
Certificateholders to cure any ambiguity, to correct or supplement any
provisions herein, 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 or to give effect to the expectations of the investors
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 adversely affect 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. 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 and the Seller may also
at any time and from time to time amend this Agreement, 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 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 by the Depositor,
the Master Servicer, the Seller and the Trustee and the Holders of each Class
of Certificates 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 pursuant to this paragraph shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of
the Holders of any Class of Certificates in a manner other than as described
in (i), without the
X-1
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 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 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
X-2
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
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 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;
X-3
(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.
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: Xxxx Xxxxx,
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: Xxxx Xxxxx, 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 2002-BC3, 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, BNY Western Trust Company, a
subsidiary of The Bank of New York Company Inc., 000 X. Xxxxxx Xxxxxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxxxxxxx, 00000, Attention: MBS Support Services; and (vi)
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, Inc., 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.
X-4
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.
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.
X-5
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 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.
* * *
X-6
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Seller, the
Trustee and the Co-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
BNY WESTERN TRUST COMPANY,
not in its individual capacity,
but solely as Co-Trustee
By: /s/ Xxxxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 29th day of August, 2002, 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 a 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 Xxxxxx
---------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 29th day of August, 2002, 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 a Senior Vice President of Countrywide GP, Inc.,
the general partner 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 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 Xxxxxx
-------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 29th day of August, 2002, 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 a 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 Xxxxxx
-----------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 29th day of August, 2002, 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 CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 29th day of August, 2002, before me, a notary public in and for
said State, appeared Xxxxxxxxx Xxxxxx, personally known to me on the basis of
satisfactory evidence to be a Vice President of BNY Western Trust Company, a
California 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/ Xxxxxxxx X. Xxxxxx
------------------------------
Notary Public
[Notarial Seal]
Exhibit A-1
through A-9
[Exhibits A-1 through A-9 are
photocopies of such Certificates as
delivered.]
[See appropriate documents delivered at closing]
A-1
Exhibit B
Exhibit B is a photocopy
of the Class N Certificate
as delivered.
[See appropriate documents delivered at closing.]
B-1
Exhibit C
Exhibit C is a photocopy
of the Class X Certificate
as delivered.
[See appropriate documents delivered at closing.]
C-1
Exhibit D
[Exhibit D is a photocopy
of the Class A-R Certificate
as delivered.]
[See appropriate documents delivered at closing]
D-1
Exhibit E
[Exhibit E is a photocopy
of the Tax Matters Person Certificate
as delivered.]
[See appropriate documents delivered at closing]
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 August 1, 2002
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 BNY
Western Trust Company, as Co-Trustee, relating to the
Asset-Backed Certificates, Series 2002-BC3
-----------------------------------------------------------
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
Co-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.
G-1-1
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-1-2
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of August 1, 2002
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 BNY Western
Trust Company, as Co-Trustee, relating to the Asset-Backed
Certificates, Series 2002-BC3
------------------------------------------------------------------
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 Co-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;
G-2-1
(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 2002-BC3, CWABS, Inc., by
The Bank of New York, a New York banking corporation, as
trustee under the Pooling and Servicing Agreement dated as of
August 1, 2002, 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);
(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, 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
G-2-2
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.
G-2-3
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-2-4
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of August 1, 2002
(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 BNY Western Trust
Company, as Co-Trustee, relating to the Asset-Backed
Certificates, Series 2002-BC3 among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller, and
The Bank of New York, as Trustee
---------------------------------------------------------
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 Co-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 2002-BC3, CWABS, Inc., by The Bank of New York, a
New York banking corporation, as trustee under the Pooling and Servicing
Agreement dated as of August 1, 2002, without recourse", or, in the case
of each Mortgage Loan with respect to property located in the
X-0-0
Xxxxx xx Xxxxxxxxxx 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).
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 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.
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 August 1, 2002
(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 BNY Western Trust
Company, as Co-Trustee, relating to the Asset-Backed
Certificates, Series 2002-BC3
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 Co-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 2002-BC3, CWABS, Inc., by The Bank of New York, a New York banking
corporation, as trustee under the Pooling
H-1
and Servicing Agreement dated as of August 1, 2002, 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);
(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 August 1, 2002 (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
BNY Western Trust Company, 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 plan subject to Section 406
of ERISA or Section 4975 of the Code, nor a person acting on behalf of any
such plan or using the assets of any such plan, to effect such acquisition, or
alternatively, the source of funds for the purchase of the Certificate is an
"insurance company general account" within the meaning of Prohibited
Transaction Class Exemption 95-60 (PTCE 95-60"), 60 Fed. Reg. 35925 (July 12,
1995), and the terms and conditions of Sections I and III of PTCE 95-60 are
satisfied by the acquisition and holding of the Certificate. 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
I-1
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 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
* * *
I-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ____ day of _____________, 20__.
[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-4
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, 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.
R-1
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
1
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-1
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 2002-BC3
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 August 1, 2002, 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 BNY Western Trust Company, as
Co-Trustee.
Very truly yours,
__________________________________
Name of Transferor
By: _______________________________
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATE 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 2002-BC3, Class [ ]
Ladies and Gentlemen:
In connection with our disposition of the above-captioned Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being
disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act. 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 August 1, 2002, 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 BNY
Western Trust Company, as Co-Trustee.
Very truly yours,
__________________________________
Name of Transferor
By: _______________________________
Name:
Title:
J-2-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
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 2002-BC3, Class [ ]
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) if the Certificates have been
the subject of an ERISA-Qualifying Underwriting and we are an insurance
company, we are 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, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with
clause (g) below), (f) we have not offered or sold any Certificates to, or
solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any
K-1
person with respect thereto, or taken any other action which would result in a
violation of Section 5 of the Act, and (g) we will not sell, transfer or
otherwise dispose of any Certificates unless (1) such sale, transfer or other
disposition is made pursuant to an effective registration statement under the
Act or is exempt from such registration requirements, and if requested, we
will at our expense provide an opinion of counsel satisfactory to the
addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth
in the Pooling and Servicing Agreement.
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
August 1, 2002, 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 BNY Western Trust Company, as Co-Trustee.
Very truly yours,
__________________________________
Name of Transferee
By: _______________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
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 2002-BC3, Class [ ]
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) if the Certificates have been
the subject of an ERISA-Qualifying Underwriting and we are an insurance
company, we are 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 the purchase and holding of such Certificates are covered
under Sections I and III of PTCE 95-60, (e) we have not, nor has anyone acting
on our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security
to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Certificates, any interest in the Certificates or any other
similar security from, or otherwise approached or negotiated with respect to
the Certificates, any interest in the Certificates or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other
L-1
action, that would constitute a distribution of the Certificates under the
Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is
being made in reliance on Rule 144A. We are acquiring the Certificates for our
own account or for resale pursuant to Rule 144A and further, understand that
such Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for
its own account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in reliance
on Rule 144A, or (ii) pursuant to another exemption from registration under
the Securities Act.
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
August 1, 2002, 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 BNY Western Trust Company, as Co-Trustee.
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis either at least $100,000 in securities or,
if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis at
least $10,000,000 in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined
by a State or Federal authority having supervision over any such
institutions or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
L-3
___ Broker-dealer. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of
Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisors
Act of 1940.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part
of an unsold allotment to or subscription by the Buyer, if the Buyer is a
dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated
L-4
subsidiary of another enterprise and the Buyer is not itself a reporting
company under the Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes
in the information and conclusions herein. Until such notice is given, the
Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after
they become available.
____________________________________
Print Name of Buyer
By:_________________________________
Name:
Title:
Date:_______________________________
L-5
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no current information
with respect to the cost of those securities has been published. If clause
(ii) in the preceding sentence applies, the securities may be valued at
market.
___ The Buyer owned $_________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
___ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $__________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
L-6
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) securities issued or guaranteed by the
U.S. or any instrumentality thereof, (iii) bank deposit notes and certificates
of deposit, (iv) loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and under-stands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
____________________________________
Print Name of Buyer
By:_________________________________
Name:
Title:
IF AN ADVISER:
____________________________________
Print Name of Buyer
Date:_______________________________
L-7
EXHIBIT M
REQUEST FOR RELEASE
(for Co-Trustee)
Loan Information
Name of Mortgagor:
----------------------------------------------
Master Servicer
Loan No.:
----------------------------------------------
Co-Trustee
Name:
----------------------------------------------
Address:
----------------------------------------------
Co-Trustee
Mortgage File No.:
----------------------------------------------
The undersigned Master Servicer hereby acknowledges that it has received
from _______________________________________, as Co-Trustee for the Holders of
Asset-Backed Certificates, Series 2002-BC3, 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 August 1, 2002 (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 the
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 _____________.
M-1
( ) Assignment of Mortgage or Deed of Trust to the Trustee, 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
_____________.
( ) 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 Co-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 2002-BC3
__________________________________________ 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.]
[see appropriate documents delivered at closing]
O-1
EXHIBIT P
FORM OF MORTGAGE NOTE AND MORTGAGE
P-1
EXHIBIT Q
[RESERVED]
Q-1
EXHIBIT R
FORM OF THE CAP CONTRACT
[BEAR XXXXXXX
[BEAR XXXXXXX FINANCIAL PRODUCTS INC.
000 XXXX XXXXXX
XXXXX 0000
XXX XXXX, XXX XXXX 00000
000-000-0000]
DATE: [ ]
TO: Countrywide Home Loans, Inc.
ATTENTION: Xx. Xxxx Xxxxx
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER: [ ]
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the current Transaction entered into on the Trade Date specified
below (the "Current Transaction") between Bear Xxxxxxx Financial Products Inc.
("BSFP") and Countrywide Home Loans Inc. ("Counterparty"). This Agreement,
which evidences a complete and binding agreement between you and us to enter
into the Transaction on the terms set forth below, constitutes a
"Confirmation" as referred to in the "ISDA Form Master Agreement" (as defined
below), as well as a "Schedule" as referred to in the ISDA Form Master
Agreement.
1. This Agreement is subject to the 1991 ISDA Definitions (the "1991
Definitions"), as supplemented by the 1998 Supplement to the 1991 ISDA
Definitions (the "Supplement") and as amended and supplemented by the 1998
ISDA Euro Definitions (the "Euro Definitions") (collectively the
"Definitions"), each as published by the International Swaps and Derivatives
Association, Inc. ("ISDA"). You and we have agreed to enter into this
Agreement in lieu of negotiating a Schedule to the ISDA Master Agreement
(Multicurrency--Cross Border) form (the "ISDA Form Master Agreement") but,
rather, an ISDA Form Master Agreement shall be deemed to have been executed by
you and us on the date we entered into the Transaction. In the event of
R-2-1
any inconsistency between the provisions of this Agreement and the Definitions
or the ISDA Form Master Agreement, this Agreement shall prevail for purposes
of the Transaction.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Rate Cap
Notional Amount: Shall equal:
(i) USD [ ] for the initial Calculation
Period, and
(ii) the amount as detailed in the Schedule of
Notional Amounts attached hereto.
Trade Date: [ ]
Effective Date: [ ]
Termination Date: [ ], subject to adjustment in accordance
with the Business Day Convention.
Fixed Amount (Premium):
Fixed Rate Payer: Counterparty
Cap Rate: [ ]%
Fixed Rate Payer
Payment Date: [ ]
Fixed Amount: USD [ ]
Floating Amounts:
Floating Rate Payer: BSFP
Floating Rate Payer
Period End Dates: The 25th calendar day of each month
during the Term of this Transaction,
commencing [ ] and ending on the
Termination Date, subject to adjustment in
accordance with the Business Day
Convention.
Floating Rate Payer
R-2-2
Payment Dates: The first Business Day preceding each
Period End Date during the Term of this
Transaction, commencing on the first
Business Day preceding [ ] and ending
on the first Business Day preceding
the Termination Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Floating Rate Day
Count Fraction: Actua1/360
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days: New York and London
Business Day Convention: Modified Following
Calculation Agent: BSFP
3. Additional Provisions: 1) Each party hereto is hereby advised and
acknowledges that the other party has
engaged in (or refrained from engaging in)
substantial financial transactions and has
taken (or refrained from taking) other
material actions in reliance upon the entry
by the parties into the Transaction being
entered into on the terms and conditions
set forth herein and in the Confirmation
relating to such Transaction, as applicable.
This paragraph (1) shall be deemed repeated
on the trade date of each Transaction.
4. Provisions Deemed Incorporated in a Schedule to the Master Agreement:
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement will apply to any Transaction.
2) Termination Provisions. For purposes of the Master Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty for any
purpose.
R-2-3
(b) "Specified Transaction" is not applicable to BSFP or Counterparty for
any purpose, and, accordingly, Section 5(a)(v) shall not apply to
BSFP or Counterparty.
(c) The "Cross Default" provisions of Section 5(a)(vi) will not apply to
BSFP or to Counterparty.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will
not apply to BSFP or Counterparty.
(e) The "Automatic Early Termination" provision of Section 6(a) will not
apply to BSFP or to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(e) of
this Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
3) Tax Representations. Not applicable.
4) Limitation on Events of Default. Notwithstanding the terms of Sections 5
and 6 of this Agreement, if at any time and so long as the Counterparty has
satisfied in full all its payment obligations under Section 2(a)(i) of this
Agreement and has at the time no future payment obligations, whether absolute
or contingent, under such Section, then unless BSFP is required pursuant to
appropriate proceedings to return to the Counterparty or otherwise returns to
the Counterparty upon demand of the Counterparty any portion of any such
payment, (a) the occurrence of an event described in Section 5(a) of this
Agreement with respect to the Counterparty shall not constitute an Event of
Default or Potential Event of Default with respect to the Counterparty as
Defaulting Party and (b) BSFP shall be entitled to designate an Early
Termination Date pursuant to Section 6 of this Agreement only as a result of
the occurrence of a Termination Event set forth in either Section 5(b)(i) or
5(b)(ii) of this Agreement with respect to BSFP as the Affected Party.
5) Documents to be Delivered. For the purpose of Section 4(a):
(1) Tax forms, documents, or certificates to be delivered are:
Party required to deliver document Form/Document/ Date by which to be delivered
Certificate
BSFP and the Counterparty Any document required or reasonably Promptly after the earlier of (i)
requested to allow the other party reasonable demand by either party or
to make payments under this (ii) learning that such
R-2-4
Agreement without any deduction or form or document is required
withholding for or on the account of
any Tax or with such deduction or
withholding at a reduced rate
(2) Other documents to be delivered are:
Party required to deliver Form/Document/ Date by which to be Covered by Section 3(d)
document Certificate delivered Representation
BSFP and the Counterparty Any documents required by the Upon the execution and Yes
receiving party to evidence the delivery of this
authority of the delivering Agreement and such
party or its Credit Support Confirmation
Provider, if any, for it to
execute and deliver this
Agreement, any Confirmation ,
and any Credit Support Documents
to which it is a party, and to
evidence the authority of the
delivering party or its Credit
Support Provider to perform its
obligations under this
Agreement, such Confirmation
and/or Credit Support Document,
as the case may be
BSFP and the Counterparty A certificate of an authorized Upon the execution and Yes
officer of the party, as to the delivery of this
incumbency and authority of the Agreement and such
respective officers of the party Confirmation
signing this Agreement, any
relevant Credit Support
Document, or any Confirmation,
as the case may be
(3) BSFP will provide a Legal Opinion.
R-2-5
6) Miscellaneous. Miscellaneous
(a) Address for Notices: For the purposes of Section 12(a) of this Agreement:
Address for notices or communications to BSFP:
Address: 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager -- Suite 1700
Facsimile: (000) 000-0000
with a copy to:
Address: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
Attention: Derivative Operations - 7th Floor
Facsimile: (000) 000-0000
For all purposes)
Address for notices or communications to the Counterparty:
Address: 0000 Xxxx Xxxxxxx
Xxxx Xxxx XX-000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Facsimile: 000-000 0000
Phone: 000-000-0000
(b) Process Agent. For the purpose of Section 13(c):
BSFP appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(c) Offices. The provisions of Section 10(a) will not apply to this
Agreement; neither BSFP nor the Counterparty have any Offices other
than as set forth in the Notices Section and BSFP agrees that, for
purposes of Section 6(b) of this Agreement, it shall not in future
have any Office other than one in the United States.
(d) Multibranch Party. For the purpose of Section 10(c) of this
Agreement:
BSFP is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BSFP.
R-2-6
(f) Credit Support Document. Not applicable for either BSFP or the
Counterparty.
(g) Credit Support Provider.
BSFP: Not Applicable
The Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the law of
the State of New York shall govern their rights and duties in whole.
(i) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue
in full force and effect as if this Agreement had been executed with the
invalid or unenforceable portion eliminated, so long as this Agreement as so
modified continues to express, without material change, the original
intentions of the parties as to the subject matter of this Agreement and the
deletion of such portion of this Agreement will not substantially impair the
respective benefits or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid
or enforceable term, provision, covenant or condition, the economic effect of
which comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(j) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any and
all communications between officers or employees of the parties, waives any
further notice of such monitoring or recording, and agrees to notify its
officers and employees of such monitoring or recording.
(k) Waiver of Jury Trial. Each party waives any right it may have to a trial
by jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document.
(l) BSFP will not unreasonably withhold or delay its consent to an assignment
of this Agreement to any other third party.
7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement, provided that BSFP shall not be deemed to have any
Affiliates for purposes of this Agreement, including for purposes of Section
6(b)(ii).
8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):
"(g) Relationship Between Parties.
R-2-7
Each party represents to the other party on each date
when it enters into a Transaction that:--
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction (whether written
or oral), other than the representations expressly made in this Agreement or
the Confirmation in respect of that Transaction.
(2) Evaluation and Understanding.
(i) It has the capacity to evaluate (internally or through
independent professional advice) the Transaction and has made its own decision
to enter into the Transaction; and
(ii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those terms and conditions and
to assume those risks, financially and otherwise.
(3) Purpose. It is entering into the Transaction for the
purposes of managing its borrowings or investments, hedging its underlying
assets or liabilities or in connection with a line of business.
Principal. It is entering into the Transaction as principal, and not as agent
or in any other capacity, fiduciary or otherwise.
NEITHER THE BEAR XXXXXXX COMPANIES INC. NOR ANY SUBSIDIARY OR
AFFILIATE OF THE BEAR XXXXXXX COMPANIES INC. OTHER THAN BSFP IS AN
OBLIGOR OR A CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.
5. Account Details and
Settlement Information: Payments to BSFP:
Citibank, N.A., New York
ABA Number: 000-0000-00, for the account of Bear,
Xxxxxxx Securities Corp.
Account Number: 0925-3186, for further credit to
Bear Xxxxxxx Financial Products Inc.
Sub-account Number: 102-04654-1-3
Attention: Derivatives Department
Payments to Counterparty:
[Please provide]
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
R-2-8
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to 000-000-0000. For inquiries regarding U.S. Transactions,
please contact Xxxxx Xxxxxx by telephone at 000-000-0000. For all other
inquiries please contact Xxxxx Xxxxxx by telephone at 000-0-000-0000.
Originals will be provided for your execution upon your request.
R-2-9
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By: __________________
Name:
Title:
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
COUNTRYWIDE HOME LOANS, INC.
By: __________________
Name:
Title:
(Authorized Signatory)
R-2-10
SCHEDULE OF NOTIONAL AMOUNTS
(all such dates subject to adjustment in accordance with the Business Day Convention)
From and including Applicable Notional
Effective Date To but excluding Amount (USD)
[ ]
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Termination Date [ ]
R-2-11
EXHIBIT S
[FORM OF THE CAP CONTRACT ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
[subject to revision]
ASSIGNMENT AGREEMENT, dated as of [ ] ("Assignment Agreement"), among
COUNTRYWIDE HOME LOANS, INC. ("Assignor"), THE BANK OF NEW YORK, NOT IN AN
INDIVIDUAL CAPACITY, BUT AS TRUSTEE FOR CWABS, INC. ASSET-BACKED CERTIFICATES,
SERIES 200_-[ ] ("Assignee"), pursuant to a Pooling and Servicing Agreement
dated as of [ ] among CWABS, Inc., as depositor, the Assignor, as seller,
Countrywide Home Loans Servicing LP, as master servicer, the Assignee, as
trustee and BNY Western Trust Company, as co-trustee (the "Pooling and
Servicing Agreement"), and BEAR XXXXXXX FINANCIAL PRODUCTS INC. ("Remaining
Party").
W I T N E S S E T H:
WHEREAS, effective as of [ ], Assignor desires to assign all of its
rights and delegate all of its duties and obligations to Assignee under that
certain Transaction (the "Assigned Transaction") as evidenced by that certain
agreement dated [ ] constituting a "Confirmation" as referred to in the "ISDA
Form Master Agreement" (as defined below), as well as a "Schedule" as referred
to in the ISDA Form Master Agreement, and whose reference number is [ ] (the
"Agreement"), a copy of which is attached hereto as Exhibit I;
WHEREAS, Assignor and Remaining Party have executed and delivered the
Agreement in lieu of negotiating both an ISDA Master Agreement
(Multicurrency--Cross Border) form (the "ISDA Form Master Agreement") and a
Schedule thereto;
WHEREAS, Assignee desires to accept the assignment of rights and assume
the delegation of duties and obligations of the Assignor under the Assigned
Transaction, including any modifications agreed to by the parties; and
WHEREAS, Assignor desires to obtain the written consent of Remaining
Party to the assignment, delegation, and assumption and Remaining Party
desires to grant such consent in accordance with the terms hereof;
S-2-1
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Assignment and Assumption. Effective as of and from [ ] (the
"Effective Date"), Assignor hereby assigns all of its rights and delegates all
of its duties and obligations to Assignee and Assignee hereby assumes all the
Assignor's rights, duties, and obligations under the Assigned Transaction
arising on or after the Effective Date.
2. Release. Effective as of and from the Effective Date, Remaining
Party and Assignor hereby release one another from all duties and obligations
owed under and in respect of the Assigned Transaction, and Assignor hereby
terminates its rights under and in respect of the Assigned Transaction.
3. Limitation on Liability. Assignor and Remaining Party agree to
the following: (a) the sole recourse in respect of the obligations of the
Assignee hereunder and under the Assigned Transaction shall be to the Trust
Fund (as defined in the Pooling and Servicing Agreement); (b) The Bank of New
York ("BNY") is entering into this Assignment Agreement solely in its capacity
as trustee and not in its individual capacity under the Pooling and Servicing
Agreement; and (c) in no case shall BNY (or any person acting as successor
trustee under the Pooling and Servicing Agreement) be personally liable for or
on account of any of the statements, representations, warranties, covenants or
obligations stated to be those of Assignor under the terms of the Assigned
Transaction, all such liability, if any, being expressly waived by the
Assignor and the Remaining Party and any person claiming by, through or under
either such party.
4. Consent and Acknowledgment of Remaining Party. Remaining Party
hereby consents to the assignment and delegation by Assignor to Assignee of
all the rights, duties, and obligations of the Assignor under the Assigned
Transaction pursuant to this Assignment Agreement. In addition, Remaining
Party hereby acknowledges that the responsibilities of Assignee under the
Assigned Transaction will be performed on its behalf by Countrywide Home
Loans, Inc., as master servicer under the Pooling and Servicing Agreement.
5. Representations. Each party hereby represents and warrants to
the other parties as follows:
(a) It is duly organized, validly existing and in good standing under
the laws of its organization or incorporation;
(b) It has the power to execute and deliver this Assignment Agreement;
and
(c) Its obligations under this Assignment Agreement constitute its
legal, valid and binding obligations, enforceable in accordance with
their respective terms.
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Each of Assignor and Remaining Party represent that no event or condition
has occurred that constitutes an Event of Default, a Potential Event of
Default or to the party's knowledge, a Termination Event (as such terms are
defined in the Agreement), with respect to the party, and no such event would
occur as a result of the party's entering into or performing its obligations
under this Assignment Agreement.
6. Indemnity. Each of the Assignor and the Remaining Party hereby
agrees to indemnify and hold harmless the Assignee with respect to any and all
claims arising under the Assigned Transaction prior to the Effective Date.
Each of the Assignee (subject to the limitations set forth in paragraph 3
above) and the Remaining Party hereby agrees to indemnify and hold harmless
the Assignor with respect to any and all claims arising under the Assigned
Transaction on or after the Effective Date.
7. Governing Law. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
8. Notices. For the purposes of this Assignment Agreement and Section
12(a) of the Assigned Transaction, the addresses for notices or communications
are as follows: (i) in the case of the Assignor, Countrywide Home Loans, Inc.,
0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxx, with a
copy to the same address, Attention: Legal Department, or such other address
as may be hereafter furnished in writing to the Assignee and the Remaining
Party; (ii) in the case of the Assignee, The Bank of New York, 0 Xxxx Xxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Corporate Trust MBS
Administration, CWABS, Series 2002-BC3, or such other address as may be
hereafter furnished in writing to the Assignor and the Remaining Party; and
(iii) in the case of the of the Remaining Party, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: DPC Manager - Suite 1700, facsimile (000) 000-0000,
with a copy to Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, facsimile
(000) 000-0000, or such other address as may be hereafter furnished in writing
to the Assignor and the Assignee.
9. Payments. All payments remitted by the Remaining Party under the
Assigned Transaction shall be made by wire transfer according to the following
instructions:
The Bank of New York,
New York, NY
ABA # 000-000-000
GLA # 111-565
For Further Credit: [ ]
Attn: Xxxxx X. Xxxxxxx (000) 000-0000
10. Counterparts. This Assignment Agreement may be executed and
delivered in counterparts (including by facsimile transmission), each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.
By:___________________________________
Name:
Title:
THE BANK OF NEW YORK, NOT IN AN INDIVIDUAL CAPACITY, BUT
AS TRUSTEE FOR CWABS, INC. ASSET BACKED CERTIFICATES,
SERIES 200[ ]-[ ]
By:___________________________________
Name:
Title:
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By:___________________________________
Name:
Title:
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