EXHIBIT 99.1
EXECUTION COPY
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CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
THE BANK OF NEW YORK,
Trustee
and
BNY WESTERN TRUST COMPANY,
Co-Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2003
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ASSET-BACKED CERTIFICATES, SERIES 2003-4
Table of Contents
Page
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ARTICLE I. DEFINITIONS............................................................................................4
Section 1.01 Defined Terms...................................................................................4
Section 1.02 Certain Interpretive Provisions................................................................36
ARTICLE II. CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.........................................36
Section 2.01 Conveyance of Mortgage Loans...................................................................36
Section 2.02 Acceptance by Trustee of the Mortgage Loans....................................................40
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the Seller................43
Section 2.04 Representations and Warranties of the Depositor................................................56
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases................57
Section 2.06 Authentication and Delivery of Certificates....................................................58
Section 2.07 Covenants of the Master Servicer...............................................................58
ARTICLE III. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS......................................................58
Section 3.01 Master Servicer to Service Mortgage Loans......................................................58
Section 3.02 Subservicing; Enforcement of the Obligations of Master Servicer................................61
Section 3.03 Rights of the Depositor, the Seller, the Certificateholders and the Trustee in Respect
of the Master Servicer.........................................................................61
Section 3.04 Trustee to Act as Master Servicer..............................................................62
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account; Distribution Account;
Seller Shortfall Interest Requirement..........................................................63
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow Accounts............................65
Section 3.07 Access to Certain Documentation and Information Regarding the Mortgage Loans...................66
Section 3.08 Permitted Withdrawals from the Certificate Account, Distribution Account, Carryover
Reserve Fund and the Principal Reserve Fund....................................................66
Section 3.09 [Reserved].....................................................................................69
Section 3.10 Maintenance of Hazard Insurance................................................................69
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................70
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and
Realized Losses; Repurchase of Certain Mortgage Loans..........................................71
Section 3.13 Co-Trustee to Cooperate; Release of Mortgage Files.............................................74
Section 3.14 Documents, Records and Funds in Possession of Master Servicer to be Held for the
Trustee........................................................................................75
Section 3.15 Servicing Compensation.........................................................................75
Section 3.16 Access to Certain Documentation................................................................76
Section 3.17 Annual Statement as to Compliance..............................................................76
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Section 3.18 Annual Independent Public Accountants' Servicing Statement; Financial Statements...............76
Section 3.19 The Cap Contract...............................................................................77
Section 3.20 Prepayment Charges.............................................................................77
ARTICLE IV. DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER....................................................78
Section 4.01 Advances; Remittance Reports...................................................................78
Section 4.02 Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls..........80
Section 4.03 [Reserved].....................................................................................80
Section 4.04 Distributions..................................................................................80
Section 4.05 Monthly Statements to Certificateholders.......................................................86
Section 4.06 [Reserved].....................................................................................89
Section 4.07 [Reserved].....................................................................................89
Section 4.08 Carryover Reserve Fund.........................................................................89
ARTICLE V. THE CERTIFICATES......................................................................................90
Section 5.01 The Certificates...............................................................................90
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates....................91
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..............................................95
Section 5.04 Persons Deemed Owners..........................................................................95
Section 5.05 Access to List of Certificateholders' Names and Addresses......................................95
Section 5.06 Book-Entry Certificates........................................................................95
Section 5.07 Notices to Depository..........................................................................96
Section 5.08 Definitive Certificates........................................................................97
Section 5.09 Maintenance of Office or Agency................................................................97
ARTICLE VI. THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER....................................................97
Section 6.01 Respective Liabilities of the Depositor, the Master Servicer and the Seller....................97
Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer or the Seller....................98
Section 6.03 Limitation on Liability of the Depositor, the Seller, the Master Servicer and Others...........98
Section 6.04 Limitation on Resignation of Master Servicer...................................................99
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.................................................99
ARTICLE VII. DEFAULT; TERMINATION OF MASTER SERVICER............................................................100
Section 7.01 Events of Default.............................................................................100
Section 7.02 Trustee to Act; Appointment of Successor......................................................101
Section 7.03 Notification to Certificateholders............................................................103
ARTICLE VIII. CONCERNING THE TRUSTEE AND THE CO-TRUSTEE.........................................................103
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Section 8.01 Duties of Trustee.............................................................................103
Section 8.02 Certain Matters Affecting the Trustee.........................................................104
Section 8.03 Trustee Not Liable for Mortgage Loans.........................................................105
Section 8.04 Trustee May Own Certificates..................................................................106
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses............................................106
Section 8.06 Eligibility Requirements for Trustee..........................................................106
Section 8.07 Resignation and Removal of Trustee............................................................107
Section 8.08 Successor Trustee.............................................................................108
Section 8.09 Merger or Consolidation of Trustee............................................................108
Section 8.10 Appointment of Co-Trustee or Separate Trustee.................................................108
Section 8.11 Tax Matters...................................................................................109
Section 8.12 Co-Trustee....................................................................................112
Section 8.13 Access to Records of the Trustee..............................................................115
Section 8.14 Suits for Enforcement.........................................................................115
ARTICLE IX. TERMINATION.........................................................................................115
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage Loans..............................115
Section 9.02 Final Distribution on the Certificates........................................................116
Section 9.03 Additional Termination Requirements...........................................................117
ARTICLE X. MISCELLANEOUS PROVISIONS.............................................................................118
Section 10.01 Amendment.....................................................................................118
Section 10.02 Recordation of Agreement; Counterparts........................................................120
Section 10.03 Governing Law.................................................................................120
Section 10.04 Intention of Parties..........................................................................120
Section 10.05 Notices.......................................................................................121
Section 10.06 Severability of Provisions....................................................................122
Section 10.07 Assignment....................................................................................122
Section 10.08 Limitation on Rights of Certificateholders....................................................122
Section 10.09 Inspection and Audit Rights...................................................................123
Section 10.10 Certificates Nonassessable and Fully Paid.....................................................123
Exhibits
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EXHIBIT A Forms of Certificates
EXHIBIT A-1 Form of Class A-1 Certificate
EXHIBIT A-2 Form of Class A-2 Certificate
EXHIBIT A-3 Form of Class M-1 Certificate
EXHIBIT A-4 Form of Class M-2 Certificate
EXHIBIT A-5 Form of Class M-3 Certificate
EXHIBIT A-6 Form of Class M-4 Certificate
EXHIBIT A-7 Form of Class M-5 Certificate
EXHIBIT A-8 Form of Class B Certificate
EXHIBIT B Form of Class P Certificate
EXHIBIT C Form of Class C Certificate
EXHIBIT D Form of Class A-R Certificate
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EXHIBIT E Form of Tax Matters Person Certificate (Class A-R)
EXHIBIT F Mortgage Loan Schedule
EXHIBIT F-1 List of Mortgage Loans
EXHIBIT F-2 Mortgage Loans for which All or a Portion of a
Related Mortgage File is not Delivered to the
Trustee on or prior to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Forms of Delay Delivery Certification
EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I-1 Transfer Affidavit for Class A-R Certificates
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 Form of Trustee Notice with respect to REMIC Provisions
EXHIBIT N Request for Release (for Mortgage Loans Paid in Full,
Repurchased or Replaced)
EXHIBIT O Copy of Depository Agreement
EXHIBIT P [Reserved]
EXHIBIT Q Form of Cap Contract
EXHIBIT R [Reserved]
EXHIBIT S Form of Cap Contract Assignment Agreement
EXHIBIT T Officer's Certificate with respect to Prepayments
SCHEDULE I [Reserved]
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POOLING AND SERVICING AGREEMENT, dated as of July 1, 2003, by and
among CWABS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller (the
"Seller"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership,
as master servicer (the "Master Servicer"), THE BANK OF NEW YORK, a New York
banking corporation, as trustee (the "Trustee"), and BNY WESTERN TRUST
COMPANY, a California banking corporation, as co-trustee (the "Co-Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed
to the Trustee in return for the Certificates. The Trust Fund (excluding the
Cap Contract, the Principal Reserve Fund and the Carryover Reserve Fund) for
federal income tax purposes will consist of two REMICs (alternatively the
"Master REMIC" and the "Subsidiary REMIC"). The Subsidiary REMIC will consist
of all of the assets constituting the Trust Fund (excluding the Cap Contract,
the Principal Reserve Fund and the Carryover Reserve Fund) and will be
evidenced by (i) the Subsidiary REMIC Regular Interests which will be
uncertificated and will represent the "REMIC regular interests" in the
Subsidiary REMIC and (ii) the Class SR-A-R Interest which will represent the
"REMIC residual interst" in the Subsidiary REMIC. The Master REMIC will hold
as assets the Subsidiary REMIC and will be evidenced by the Certificates, each
of which (other than the Class A-R Certificate) will represent ownership of
one or more "REMIC regular interests" in the Master REMIC. The Class A-R
Certificate will represent ownership of the sole Class of "REMIC residual
interest" in each of the Subsidiary REMIC and the Master REMIC. The latest
posible maturity date, for federal income tax purposes, of all REMIC regular
interests created herein shall be the Latest Possible Maturity Date.
Subsidiary REMIC:
The following table specifies the class designation, interest rate,
and principal amount for each class of Subsidiary REMIC Interest:
Uncertificated Lower
Uncertificated REMIC Pass-Through Corresponding
Subsidiary REMIC Interests Principal Balance Rate Certificate Class
-------------------------- ---------------- -------------------- -----------------
SR-A-1...................................... (1) (2) Class A-1
SR-A2....................................... (1) (2) Class A-2
SR-M-1...................................... (1) (2) Class M-1
SR-M-2...................................... (1) (2) Class M-2
SR-M-3...................................... (1) (2) Class M-3
SR-M-4...................................... (1) (2) Class M-4
SR-M-5...................................... (1) (2) Class M-5
SR-B........................................ (1) (2) Class B
SR-Accrual.................................. (1) (2) Class N/A
SR-$100..................................... (1) (2) Class A-R
SR-P........................................ (1) (2) Class P
SR-A-R...................................... (1) (2) Class (6)
_______________
(1) The XX-X-0 Xxxxxxxx, XX-X-0 Interest, SR-M-1 Interest, SR-M-2
Interest, SR-M-3 Interest, SR-M-4 Interest, SR-M-5 Interest, and B
Interest (each such class hereafter referred to as an "Accretion
Directed Class") each have a principal balance that is initially
equal to 50% of its corresponding Certificate Class issued by the
Master REMIC. Principal payments, both scheduled and prepaid,
Realized Losses, and interest accruing on the Mortgage Loans will be
allocated to each of the foregoing classes to maintain each Class'
size relative to its Corresponding Certificate Class (that is, 50%)
with any excess payments of principal and Realized Losses being
allocated to the SR-Accrual Interest in such manner as to cause the
principal balance of the SR-Accrual Interest to have a principal
balance equal to (a) 50% of the Mortgage Loan principal balances plus
(b) 50% of the Overcollateralized Amount for such Distribution Date.
(2) The interest rate with respect to any Distribution Date (and the
related Accrual Period) for this Subsidiary REMIC Interest is a per
annum rate equal to the Net Rate Cap.
(3) The principal balance of the SR-Accrual Interest initially equals the
excess of the principal balance of the Mortgage Loans over the
aggregate principal balance of the XX-X-0 Xxxxxxxx, XX-X-0 Interest,
SR-M-1 Interest, SR-M-2 Interest, SR-M-3 Interest, SR-M-4 Interest,
SR-M-5 Interest and SR-B Interest.
(4) The interest rate with respect to any Distribution Date (and the
related Accrual Period) for the SR-Accrual Interest is a per annum
rate (hereafter referred to as the "Pool WAC Rate") equal to the
weighted average of the Adjusted Net Mortgage Rate of each of the
Mortgage Loans.
(5) The SR-$100 Interest and the SR-P Interest do not pay any interest.
All Prepayment Charges will be allocated to the SR-P Interest.
(6) The SR-A-R Interest is the sole class of residual interest in the
Subsidiary REMIC. It pays neither principal nor interest and has no
Corresponding Certificate Class.
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The following table specifies the class designation,
interest rate, and principal amount for each class of Master REMIC Interest:
Original Certificate Principal
Class Balance Pass-Through Rate
------------------------------------------------ ------------------------------ -----------------
Class A-1....................................... $81,000,000 (1)
Class A-2....................................... $164,838,000 (1)
Class M-1....................................... $12,465,000 (1)
Class M-2....................................... $3,462,000 (1)
Class M-3....................................... $6,925,000 (1)
Class M-4....................................... $2,770,000 (1)
Class M-5....................................... $2,770,000 (1)
Class B......................................... $2,770,000 (1)
Class C......................................... (3) (4)
Class P......................................... $100 (5)
Class A-R....................................... $100 (6)
(1) The Certificates will accrue interest at the related Pass-Through
Rates identified in this Agreement. Any entitlement of a Class of
Certificates to Current Interest in excess of the Net Rate Cap will
be treated as paid by the Master REMIC to the Class C Certificates or
the Class A-R Certificates, as applicable, and then paid to such
Class of Certificates, as applicable, pursuant to a limited recourse
cap contract as described in Section 8.11 herein.
(2) The Class C Certificates do not have a Certificate Principal Balance.
(3) For each Interest Accrual Period the Class C Certificates are entitled
to a specified portion of the interest on the Mortgage Loans equal to
the excess of the Pool WAC Rate over the product of two and the
weighted average of the Subsidiary REMIC Regular Interests with the
Subsidiary REMIC Accretion Directed Interests subject to a cap equal
to the Pass-Through Rate of the corresponding Certificate Class and
the subsidiary REMIC Accrual Class subject to a cap of 0.00%. The
Pass-Through Rate of the Class C Certificates will 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.
(4) For each Distribution Date the Class P Certificates are entitled to
all Prepayment Charges distributed with respect to the P Interests.
(5) The Class A-R Certificates represent the sole class of residual
interest in each REMIC created hereunder. The Class A-R Certificates
are not entitled to distributions of interest.
The foregoing REMIC structure is intended to cause all of
the cash from the Mortgage Loans to flow through to the Master REMIC as cash
flow on a REMIC regular interest, without creating any shortfall--actual or
potential (other than for credit losses) to any REMIC regular interest. To the
extent that the structure is believed to diverge from such intention the
Trustee will resolve ambiguities to accomplish such result and will to the
extent necessary rectify any drafting errors or seek clarification to the
structure without Certificateholder approval (but with guidance of Counsel) to
accomplish such intention.
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ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms.
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 each Class
of Adjustable Rate 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 C
Certificates, the calendar month preceding the month in which such
Distribution Date occurs. All calculations of interest on the Adjustable Rate
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 C 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 Certificates: The Class A-1, Class A-2, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, and Class B Certificates.
Adjustable Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable in
accordance with the terms of the related Mortgage Note (for the avoidance of
doubt, excluding any Credit Comeback Loans).
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 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) that were due on the related Due Date and not received by the
Master Servicer as of the close of business on the related Determination Date;
provided, however, with respect to each REO Property that has not been
liquidated, that the net monthly rental income (if any) from such REO Property
deposited in the Certificate Account for such Distribution Date pursuant to
Section 3.12 may be used to offset such advance for the related REO Property.
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
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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 Mortgagor 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 Balances of the
Subordinate Certificates pursuant to this Agreement, which shall equal the
amount, if any, by which, the aggregate 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 an independent fee appraiser at the
time of the origination of the related Mortgage Loan, or the sales price of
the Mortgaged Property at the time of such origination, whichever is less, or
with respect to any Mortgage Loan originated in connection with a refinancing,
the appraised value of the Mortgaged Property based upon the appraisal made at
the time of such refinancing.
Bankruptcy Code: Title 11 of the United States Code.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Adjustable Rate 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 States of New York or California
are authorized or obligated by law or executive order to be closed.
Cap Contract: The transaction evidenced by the Confirmation (as
assigned to the Trustee pursuant to the Cap Contract Assignment Agreement), a
form of which is attached hereto as Exhibit Q.
Cap Contract Assignment Agreement: The Assignment Agreement dated as
of the Closing Date among the Seller, the Trustee and the Cap Contract
Counterparty, the form of which is attached hereto as Exhibit S.
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Cap Contract Counterparty: Bear Xxxxxxx Financial Products Inc. and
its successors.
Cap Contract Termination Date: With respect to the Cap Contract, the
Distribution Date in December 2009.
Carryover Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.08 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-4". Funds in the Carryover Reserve Fund shall be
held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.
Certificate: Any one of the certificates of any Class executed and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-8, Exhibit B, Exhibit C and Exhibit D.
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, Servicing LP, in trust for registered holders of CWABS, Inc.,
Asset-Backed Certificates, Series 2003-4". Funds in the Certificate Account
shall be held in trust for the Certificateholders for the uses and purposes
set forth in this Agreement.
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 C Certificates) and as of any Distribution Date, the Initial Certificate
Principal Balance of such Certificate less the sum of (i) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
4.04, and (ii) with respect to any Subordinate Certificates, any Applied
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates pursuant to Section 4.04. References herein to the Certificate Principal
Balance of a Class of Certificates shall mean the Certificate Principal
Balances of all Certificates in such Class. The Class C Certificates do not
have a Certificate Principal Balance. With respect to any Certificate (other
than the Class C Certificates) of a Class and any Distribution Date, the
portion of the Certificate Principal Balance of such Class represented by such
Certificate equal to the product of the Percentage Interest evidenced by such
Certificate and the Certificate Principal Balance of such Class.
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 Book-Entry 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
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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 Certificates: Collectively, the Class A-1 Certificates and
the Class A-2 Certificates.
Class A Principal Distribution Amount: For any Distribution Date,
the excess of (i) the aggregate Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date, over (ii) the lesser
of (A) 76.00% of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date and (B) the aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution Date minus the OC Floor.
Class A-1 Certificate: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class A-2 Certificate: Any Certificate designated as a "Class A-2
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.
Class A-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 B Certificate: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to distributions as set forth herein.
Class B Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (A) the aggregate Certificate
Principal Balance of the Class A-1 and Class A-2 Certificates (after taking
into account distributions of the Class A Principal Distribution Amount for
such Distribution Date), (B) the Certificate Principal Balance of the Class
M-1 Certificates (after taking into account distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Certificate Principal Balance of the Class M-3
Certificates (after taking into account distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Certificate
Principal Balance of the Class M-4 Certificates (after taking into account
distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Certificate Principal Balance of the
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Class M-5 Certificates (after taking into account distribution of the Class
M-5 Principal Distribution Amount on such Distribution Date), and (G) the
Certificate Principal Balance of the Class B Certificates immediately prior to
such Distribution Date over (ii) the lesser of (x) 98.50% of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date minus the OC Floor; provided, however, that if the Class B
Certificates are the only Class of Certificates outstanding on such
Distribution Date, the Class B Certificates will be entitled to receive the
entire Principal Distribution Amount until the Certificate Principal Balance
of the Class B Certificates is reduced to zero.
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit C hereto,
representing the right to distributions as set forth herein.
Class C Distributable Amount: As defined in the Preliminary
Statement.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (A) the aggregate Certificate
Principal Balances of the Class A-1 and Class A-2 Certificates (after taking
into account distributions of the Class A Principal Distribution Amount for
such Distribution Date) and (B) the Certificate Principal Balance of the Class
M-1 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (x) 85.00% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date minus the OC Floor;
provided, however, that if the Class M-1 Certificates are the only Class of
Certificates outstanding on such Distribution Date, the Class M-1 Certificates
will be entitled to receive the entire Principal Distribution Amount until the
Certificate Principal Balance of the Class M-1 Certificates is reduced to
zero.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (A) the aggregate Certificate
Principal Balances of the Class A-1 and Class A-2 Certificates (after taking
into account distributions of the Class A Principal Distribution Amount for
such Distribution Date), (B) the Certificate Principal Balance of the Class
M-1 Certificates (after taking into account distribution of the Class M-1
Principal Distribution Amount on such Distribution Date) and (C) the
Certificate Principal Balance of the Class M-2 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 87.50% of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date minus the OC Floor; provided, however that if the Class M-2
Certificates are the only Class of Certificates outstanding on such
Distribution Date, the Class M-2 Certificates
8
will be entitled to receive the entire Principal Distribution Amount until the
Certificate Principal Balance of the Class M-2 Certificates is reduced to
zero.
Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (A) the aggregate Certificate
Principal Balances of the Class A-1 and Class A-2 Certificates (after taking
into account distributions of the Class A Principal Distribution Amount for
such Distribution Date), (B) the Certificate Principal Balance of the Class
M-1 Certificates (after taking into account distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (D) the Certificate Principal Balance of the Class M-3
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 92.50% of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date and (y) the aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution Date minus the OC Floor; provided,
however that if the Class M-3 Certificates are the only Class of Certificates
outstanding on such Distribution Date, the Class M-3 Certificates will be
entitled to receive the entire Principal Distribution Amount until the
Certificate Principal Balance of the Class M-3 Certificates is reduced to
zero.
Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (A) the aggregate Certificate
Principal Balances of the Class A-1 and Class A-2 Certificates (after taking
into account distributions of the Class A Principal Distribution Amount for
such Distribution Date), (B) the Certificate Principal Balance of the Class
M-1 Certificates (after taking into account distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Certificate Principal Balance of the Class M-3
Certificates (after taking into account distribution of the Class M-3
Principal Distribution Amount on such Distribution Date) and (E) the
Certificate Principal Balance of the Class M-4 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 94.50% of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date minus the OC Floor; provided, however that if the Class M-4
Certificates are the only Class of Certificates outstanding on such
Distribution Date, the Class M-4 Certificates will be entitled to receive the
entire Principal Distribution Amount until the Certificate Principal Balance
of the Class M-4 Certificates is reduced to zero.
9
Class M-5 Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (A) the aggregate Certificate
Principal Balances of the Class A-1 and Class A-2 Certificates (after taking
into account distributions of the Class A Principal Distribution Amount for
such Distribution Date), (B) the Certificate Principal Balance of the Class
M-1 Certificates (after taking into account distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Certificate
Principal Balance of the Class M-2 Certificates (after taking into account
distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Certificate Principal Balance of the Class M-3
Certificates (after taking into account distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Certificate
Principal Balance of the Class M-4 Certificates (after taking into account
distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date) and (F) the Certificate Principal Balance of the Class M-5
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 96.50% of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date and (y) the aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution Date minus the OC Floor; provided,
however that if the Class M-5 Certificates are the only Class of Certificates
outstanding on such Distribution Date, the Class M-5 Certificates will be
entitled to receive the entire Principal Distribution Amount until the
Certificate Principal Balance of the Class M-5 Certificates is reduced to
zero.
Class P Principal Distribution Date: The first Distribution Date
that occurs after the end of the latest Prepayment Charge Period for all
Mortgage Loans that have a Prepayment Charge Period.
Closing Date: July 31, 2003.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Combined Loan-to-Value Ratio: The fraction, expressed as a
percentage, the numerator of which is the sum of (x) the original principal
balance of the related Mortgage Loan and (y) the outstanding principal balance
at the date of origination of the Mortgage Loan of any senior mortgage loan
or, in the case of any open-ended senior Mortgage Loan, the maximum available
line of credit with respect to such Mortgage Loan, regardless of any lesser
amount actually outstanding at the date of origination of the Mortgage Loan,
and the denominator of which is the Appraised Value of the related Mortgaged
Property.
Compensating Interest: With respect to the Mortgage Loans and any
Distribution Date, an amount equal to the lesser of (x) one-half of the
Servicing Fee for such Mortgage Loans for the related Due Period and (y) the
aggregate Prepayment Interest Shortfalls for such Mortgage Loans for such
Distribution Date.
10
Confirmation: The Confirmation dated July 23, 2003 evidencing a
transaction between the Cap Contract Counterparty and the Seller.
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.
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.
Covered Mortgage Loan: A mortgage loan listed on the Mortgage Loan
Schedule as being covered by the Mortgage Insurance Policy.
Credit Comeback Excess Amount: With respect to the Credit Comeback
Loans and any Master Servicer Advance Date, the portion of the sum of the
following (without duplication) attributable to the excess, if any, of the
actual mortgage rate on each Credit Comeback Loan and the Mortgage Rate on
such Credit Comeback Loan: (i) all scheduled interest collected during the
related Due Period with respect to the Credit Comeback Loans, (ii) all
Advances relating to interest with respect to the Credit Comeback Loans, (iii)
all Compensating Interest with respect to the Credit Comeback Loans and (iv)
Liquidation Proceeds with respect to the Credit Comeback Loans collected
during the related Due Period (to the extent such Liquidation Proceeds relate
to interest), less all Nonrecoverable Advances relating to interest reimbursed
during the related Due Period.
Credit Comeback Loan: Any Mortgage Loan for which the related
Mortgage Rate is subject to reduction for good payment history of Scheduled
Payments by the related Mortgagor.
Cumulative Loss Trigger Event: With respect to a Distribution Date
after the Stepdown Date occurs if the aggregate amount of Trigger Event
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
August 2006-- July 2007 ..............................2.00%
August 2007-- July 2008 ..............................3.25%
August 2008-- July 2009 ..............................3.50%
August 2009 and thereafter ......................... 4.00%
11
Current Interest: With respect to each Class of Adjustable Rate
Certificates and each Distribution Date, the interest accrued at the
applicable Pass-Through Rate for the applicable Accrual Period on the
Certificate Principal Balance of such Class immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a
trustee in bankruptcy.
Cut-off Date: In the case of any Mortgage Loan, the later of (x)
July 1, 2003 and (y) the date of origination of such Mortgage Loan.
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 received 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.
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.
Definitive Certificates: As defined in Section 5.06.
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 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 thirty days after the Closing Date. To the
extent that Countrywide Home Loans, Inc. shall be in possession of any
Mortgage Files with respect to any Delay Delivery Loan, until delivery to of
such Mortgage File to the Co-Trustee as provided in Section 2.01, Countrywide
Home Loans, Inc. shall hold such files as agent and in trust for the
Co-Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by
a Replacement Mortgage Loan.
12
Delinquency Trigger Event: With respect to a Distribution Date after
the Stepdown Date exists if (x) the product of: (1) 1.71 times (2) the Rolling
Sixty-Day Delinquency Rate for the Outstanding Mortgage Loans, equals or
exceeds (y) the Required Percentage for such Distribution Date.
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, if not the foregoing, the Percentage Interest appearing on the face
thereof, as applicable.
Depositor: CWABS, Inc., a Delaware corporation, or its successor in
interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Book-Entry Certificates,
the agreement among the Depositor, the Trustee and the initial Depository,
dated as of the Closing Date, substantially in the form of Exhibit O.
Depository Participant: A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the 15th
day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(c) in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-4". 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.
13
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 August 2003.
Due Date: With respect to any Mortgage Loan and Due Period, the due
date for scheduled payments of interest and/or principal on that Mortgage Loan
occurring in such Due Period as provided in the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the calendar month
in which such Distribution Date occurs and ending on the first day in 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 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
without reduction or withdrawal of their then current ratings of the
Certificates as evidenced by a letter from each Rating Agency to the Trustee.
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, Class P
Certificates, Class C Certificates and Certificates of any Class that ceases
to satisfy the applicable rating requirement under the Underwriter's
Exemption.
Escrow Account: As defined in Section 3.06.
Event of Default: As defined in Section 7.01 hereof.
14
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)(viii), and (ii) the amount remaining after the distribution of
principal to Certificateholders for such Distribution Date pursuant to Section
4.04(b)(1)(H) or 4.04(b)(2)(H).
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, (ii) the
Trustee Fee Rate and (iii) with respect to a Covered Mortgage Loan, the
applicable Mortgage Insurance Premium Rate.
Extra Principal Distribution Amount: With respect to any
Distribution Date, the lesser of (1) (x) the Overcollateralization Deficiency
Amount for such Distribution Date and (y) Excess Cashflow for such
Distribution Date.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Five-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage
Rate that is fixed for 60 months after origination thereof before such
Mortgage Rate becomes subject to adjustment.
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 and any Credit Comeback Loans, including in each case
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, as
most recently announced as of a date 45 days prior to such Adjustment Date or,
if the Index ceases to be published in The Wall Street Journal or becomes
unavailable for any reason, then
15
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 Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i) principal of the Mortgage Loans due
on or after the Cut-off Date and received by the Master Servicer before the
Closing Date and not applied in computing the Cut-off Date Principal Balance
thereof and (ii) interest on the Mortgage Loans due on and after the Cut-off
Date and received by the Master Servicer before the Closing Date.
Initial Certificate Principal Balance: With respect to any
Certificate (other than the Class C 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 Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including the Mortgage Insurance Policy, and
including all riders and endorsements thereto in effect with respect to such
Mortgage Loan, including any replacement policy or policies for any Insurance
Policy.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Master Servicer or the trustee under the deed of trust and
are not applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Master
Servicer would follow in servicing mortgage loans held for its own account, in
each case other than any amount included in such Insurance Proceeds in respect
of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Interest Carry Forward Amount: With respect to each Class of
Adjustable Rate Certificates and each Distribution Date, the excess of (i) the
Current Interest for such Class with respect to prior Distribution Dates over
(ii) the amount actually distributed to such Class with respect to interest on
such prior Distribution Dates.
Interest Determination Date: With respect to the first Accrual
Period for the Adjustable Rate Certificates, July 29, 2003. With respect to
any Accrual Period for the Adjustable Rate Certificates thereafter, the second
LIBOR Business Day preceding the commencement of such Accrual Period.
Interest Funds: With respect to any Distribution Date, the Interest
Remittance Amount for such Distribution Date, less the portion of the Trustee
Fee for such Distribution Date, less the portion of the Mortgage Insurance
Premium for such Distribution Date.
16
Interest Remittance Amount: With respect to the Mortgage Loans and
any Master Servicer Advance Date, (x) the sum, without duplication, of (i) all
scheduled interest collected during the related Due Period (for the avoidance
of doubt, other than Credit Comeback Excess Amounts) with respect to the
Mortgage Loans less the related Servicing Fee, (ii) all interest on
prepayments, other than Prepayment Interest Excess, (iii) all related Advances
relating to interest with respect to the Mortgage Loans, (iv) all related
Compensating Interest with respect to the Mortgage Loans, (v) Liquidation
Proceeds with respect to the Mortgage Loans collected during the related Due
Period (to the extent such Liquidation Proceeds relate to interest) and (vi)
the Seller Shortfall Interest Requirement, less (y) all reimbursements to the
Master Servicer during the related Due Period for Advances of interest
previously made.
Investment Letter: As defined in Section 5.02(b).
Latest Possible Maturity Date: The Distribution Date in November
2033.
LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by
applicable law governing the real property subject to the related Mortgage and
any security agreements and as to which the Master Servicer has certified (in
accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such
liquidation.
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.
Majority Holder: The Holders of Certificates evidencing at least 51%
of the Voting Rights allocated to such Class of Certificates.
Margin: With respect to any Distribution Date and Class of
Adjustable Rate Certificates, the per annum rate indicated in the following
table:
----------------------- ---------------------- ----------------------
Class Margin (1) Margin (2)
----------------------- ---------------------- ----------------------
A-1 0.130% 0.260%
----------------------- ---------------------- ----------------------
A-2 0.330% 0.660%
----------------------- ---------------------- ----------------------
M-1 0.680% 1.020%
----------------------- ---------------------- ----------------------
17
----------------------- ---------------------- ----------------------
M-2 0.920% 1.380%
----------------------- ---------------------- ----------------------
M-3 1.750% 2.625%
----------------------- ---------------------- ----------------------
M-4 2.200% 3.300%
----------------------- ---------------------- ----------------------
M-5 3.250% 4.875%
----------------------- ---------------------- ----------------------
B 3.500% 5.250%
----------------------- ---------------------- ----------------------
(1) For any Distribution Date occurring on or prior to the Optional
Termination Date.
(2) For any Distribution Date occurring after the Optional Termination
Date.
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, the
Business Day immediately preceding such Distribution Date.
Master Servicer Prepayment Charge Payment Amount: The amounts (i)
payable by the Master Servicer in respect of any Prepayment Charges waived
other than in accordance with the standard set forth in the first sentence of
Section 3.20(a), or (ii) collected from the Master Servicer in respect of a
remedy for the breach of the representation made by the Seller set forth in
Section 3.20(c).
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.
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.
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 Payment: With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is
payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation
and/or Debt Service Reduction with respect to such Mortgage Loan and (ii) any
reduction in the amount of interest collectible from the related Mortgagor
pursuant to the Relief Act; (b) without giving effect to any extension granted
or agreed to by the Master Servicer pursuant to Section 3.05(a); and (c) on
the assumption that all other amounts, if any, due under such Mortgage Loan
are paid when due.
18
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc. and its successors.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on or first priority ownership interest, or creating a second lien
on or second priority ownership interest, as applicable, in an estate in fee
simple in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents
delivered to the Co-Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Insurance Policy: The mortgage insurance policy issued by
the Mortgage Insurer with respect to certain mortgage loans identified in the
Mortgage Loan Schedule.
Mortgage Insurance Premium: The premium payable on the Mortgage
Insurance Policy on each Distribution Date.
Mortgage Insurance Premium Rate: With respect to a Covered Mortgage
Loan and any Distribution Date, the per annum rate as specified in Section 6
of the loan commitment letter dated July 31, 2003 between Radian and the
Master Servicer.
Mortgage Insurer: Radian or any Replacement Mortgage Insurer, as
applicable.
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 in 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;
(vii) the first payment date of the Mortgage Loan;
(viii) the Scheduled Payment in effect as of the
Cut-off Date;
19
(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 such Mortgage
Loan is a Credit Comeback Loan;
(xiii) the purpose of the Mortgage Loan;
(xiv) the rate for the Mortgage Insurance
Premium, if applicable; and
(xv) a code indicating whether the Mortgage
Loan is a Simple Interest Mortgage Loan; and
(xvi) 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; and
(g) the Gross Margin.
Such schedule shall also set forth the total of the amounts described under
(vi) above for all of the Mortgage Loans.
Mortgage Loans: Such of the Mortgage Loans transferred and assigned
to the Trustee pursuant to the provisions hereof as from time to time are held
as 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 that was intended by the parties hereto to be transferred to
the Trust Fund as indicated by such Mortgage Loan Schedule which is in fact
not so transferred for any reason, including a breach of the representation
contained in Section 2.02 hereof, shall continue to be a Mortgage Loan
hereunder until the Purchase Price with respect thereto has been paid to the
Trust Fund.
20
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; provided, however, the Mortgage Rate for each Credit
Comeback Loan shall be treated for all purposes of payments on the
Certificates, including the calculation of the Pass-Through Rates and the Net
Rate Cap, as reduced by 0.375% on the Due Date following the end of each of
the first four annual periods after the origination date, irrespective of
whether the Mortgagor qualifies for the reduction by having a good payment
history.
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: For any Class of Adjustable Rate Certificates
and any Distribution Date on which the Pass-Through Rate for such Class is
based upon the applicable Net Rate Cap, the sum of (A) the excess of (i) the
amount of interest that such Class would otherwise have accrued for such
Distribution Date had the Pass-Through Rate for such Class not been determined
based on the applicable Net Rate Cap, over (ii) the amount of interest accrued
on such Class at the applicable Net Rate Cap for such Distribution Date and
(B) the Net Rate Carryover for such Class for all previous Distribution Dates
not previously paid pursuant to Section 4.04, together with interest thereon
at the then applicable Pass-Through Rate for such Class, without giving effect
to the applicable Net Rate Cap.
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.
Non-United States Person : 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, 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
21
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.
OC Floor: For any Distribution Date, 0.50% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date.
Officer's Certificate: A certificate (i) in the case of the
Depositor, signed by the Chairman of the Board, the Vice Chairman of the
Board, the President, a Managing Director, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or
one of the Assistant Treasurers or Assistant Secretaries of the Depositor,
(ii) in the case of the Master Servicer, signed by the President, an Executive
Vice President, a Vice President, an Assistant Vice President, the Treasurer,
or one of the Assistant Treasurers or Assistant Secretaries of Countrywide GP,
Inc., its general partner or (iii) if provided for in this Agreement, signed
by a Servicing Officer, as the case may be, and delivered to the Depositor and
the Trustee, as the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period for the
Adjustable Rate Certificates, the rate determined by the Trustee on the
related Interest Determination Date on the basis of the rate for U.S. dollar
deposits for one month that appears on Telerate Screen Page 3750 as of 11:00
a.m. (London time) on such Interest Determination Date; provided that the
parties hereto acknowledge that One-Month LIBOR calculated for the first
Accrual Period for the Adjustable Rate Certificates shall equal 1.100% 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 for the Adjustable Rate Certificates 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 for the Adjustable Rate Certificates.
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: The first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to 10% of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date.
22
Original Value: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on
the lower of an appraisal satisfactory to the Master Servicer or the sales
price of such property or, in the case of a refinancing, on an appraisal
satisfactory to the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of
which other Certificates have been executed and delivered by the
Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the
subject of a Principal Prepayment in full, and that did not become a
Liquidated Loan, prior to the end of the related Prepayment Period.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization
Target Amount exceeds the Overcollateralized Amount on such Distribution Date
(after giving effect to distributions in respect of the Principal Remittance
Amount on such Distribution Date).
Overcollateralization Target Amount: (a) With respect to each
Distribution Date prior to the November 2003 Distribution Date, zero, (b) with
respect to each Distribution Date on or after the November 2003 Distribution
Date and before the Stepdown Date, an amount equal to 0.75% of the Cut-off
Date Pool Principal Balance and (c) for any Distribution Date on or after the
Stepdown Date, 1.50% of the Stated Principal Balances of the Mortgage Loans in
the Mortgage Pool for the current Distribution Date; provided that if a
Trigger Event is in effect on any Distribution Date, the Overcollateralization
Target Amount will be the Overcollateralization Target Amount as in effect for
the prior Distribution Date; provided further that, in the case of clauses (b)
and (c) only, the Overcollateralization Target Amount will at no time be less
than the OC Floor.
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 Balance of the Class A-1, Class A-2, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, and Class B Certificates as of such
Distribution Date (after giving effect to distributions in respect of the
Principal Remittance Amount on such 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.
23
Pass-Through Rate: With respect to any Distribution Date and each
Class of Adjustable Rate Certificates the lesser of (x) One-Month LIBOR for
the related Accrual Period plus the Margin for such Class and Distribution
Date and (y) the Net Rate Cap for such Class and Distribution Date.
Percentage Interest: With respect to any Adjustable Rate
Certificate, a fraction, expressed as a percentage, the numerator of which is
the Certificate Principal Balance represented by such Certificate and the
denominator of which is the aggregate Certificate Principal Balance of the
related Class. With respect to the Class C, Class P 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 two 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) 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;
(iv) 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;
24
(v) 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 (iv) above;
(vi) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of 115% of
the face amount thereof) bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States or any state thereof which, at the time of such investment,
have one of the two highest long term ratings of each Rating Agency
(except (x) if the Rating Agency is Moody's, such rating shall be
the highest commercial paper rating of S&P for any such securities)
and (y), or such lower rating as each Rating Agency has confirmed in
writing will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by such Rating Agency;
(vii) 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;
(viii) 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
(ix) 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 (vi) 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
25
(other than money market funds) treated as equity interests for Federal 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
any REMIC formed hereunder 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: The aggregate of the Stated Principal
Balances of the Mortgage Loans.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the Certificates.
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan
26
within the related Prepayment Charge Period in accordance with the terms
thereof (other than any Master Servicer Prepayment Charge Payment Amount).
Prepayment Charge Period: with respect to any to any Mortgage Loan,
the period of time during which a Prepayment Charge may be imposed.
Prepayment Interest Excess: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment during
the portion of the related Prepayment Period occurring from the Due Date for
such Mortgage Loan occurring in such Prepayment Period and the end of such
Prepayment Period, 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 the portion of the related Prepayment Period occurring from the
beginning of such Prepayment Period to the Due Date for such Mortgage Loan
occurring in such Prepayment Period (other than a Principal Prepayment in full
resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03,
2.04, 3.12 or 9.01 hereof), the amount, if any, by which (i) one month's
interest at the applicable Net Mortgage Rate on the Stated Principal Balance
of such Mortgage Loan immediately prior to such prepayment (or liquidation) or
in the case of a partial Principal Prepayment on the amount of such prepayment
(or liquidation proceeds) exceeds (ii) the amount of interest paid or
collected in connection with such Principal Prepayment or such liquidation
proceeds.
Prepayment Period: As to any Distribution Date, the 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 July 1, 2003) and ending on
the close of business on the fifteenth day of the month in which such
Distribution Date occurs.
Prime Rate: The prime commercial lending rate of The Bank of New
York, as publicly announced to be in effect from time to time. The Prime Rate
shall be adjusted automatically, without notice, on the effective date of any
change in such prime commercial lending rate. The Prime Rate is not
necessarily The Bank of New York's lowest rate of interest.
Principal Distribution Amount: With respect to each Distribution
Date the sum of (i) the Principal Remittance Amount for such Distribution Date
and (ii) 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.
27
Principal Reduction: For any Distribution Date, the sum of the
Principal Remittance Amount and any Realized Losses from the Mortgage Loans.
Principal Reductions shall consist proportionately of principal allocations
comprising the Principal Remittance Amount and Realized Losses, and the REMIC
1 Interest allocated a principal payment shall receive such payment on such
Distribution Date and shall have its principal balance reduced by an
allocation of Realized Losses.
Principal Remittance Amount: With respect to the Mortgage Loans and
any Distribution Date, (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 1:00 p.m. Pacific time on 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 with respect to such Distribution Date, (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 reimbursable pursuant to Section 6.03 and reimbursed during
the related Due Period.
Principal Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 3.08 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-4". Funds in the Principal Reserve Fund shall be
held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.
Private Certificates: The Class C and Class P Certificates.
Prospectus Supplement: The Prospectus Supplement dated July 21,
2003, relating to the public offering of the certain Classes of Certificates
offered thereby.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to be
(1) repurchased by the Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) repurchased
by the Depositor pursuant to Section 2.04 hereof, or (y) that the Master
Servicer has a right to purchase pursuant to Section 3.12 hereof, an amount
equal to the sum of (i) 100% of the unpaid principal balance (or, if such
purchase or repurchase, as the case may be, is effected by the Master
Servicer, the Stated Principal Balance) of the Mortgage Loan as of the date of
such purchase, (ii) accrued interest thereon at the applicable Mortgage Rate
(or, if such purchase or repurchase, as the case may be, is effected by the
Master
28
Servicer, at the Net Mortgage Rate) and (iii) any costs, expenses and
damages incurred by the Trust Fund resulting from any violation of any
predatory or abusive lending law in connection with such Mortgage Loan 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.
Radian: Radian Guaranty Inc., a Pennsylvania corporation, and its
successors.
Rating Agency: 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 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
Adjustable Rate 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 C and Class P
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 aggregate Certificate Principal Balance of the Adjustable Rate
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
29
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 aggregate Certificate Principal Balance of the Adjustable Rate
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, the Seller or the Master Servicer and (iii) which have
been designated as such by the Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificate: Any Certificate other than the Class A-R
Certificates.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Report: A report prepared by the Master Servicer and
delivered to the Trustee in accordance with Section 4.04.
REO Property: A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit N,
(i) have a Stated Principal Balance, after deduction of the principal portion
of the Scheduled Payment due in the month of substitution, not in excess of,
and not less than 90% of the Stated Principal Balance of the Deleted Mortgage
Loan; (ii) 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; (c) have
the same Index and Periodic Rate Cap as 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) be accruing interest at a 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) 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
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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)
comply with each representation and warranty set forth in Section 2.03 and
(xii) be covered by a Mortgage Insurance Policy the Deleted Mortgage Loan was
covered by if the Deleted Mortgage Loan was covered by the Mortgage Insurance
Policy.
Representing Party: As defined in Section 2.03(c).
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, including with respect to the Covered Mortgage Loans, the
Mortgage Insurance Policy.
Required Percentage: With respect to a Distribution Date after the
Stepdown Date, the fraction (expressed as a percentage) (1) the numerator of
which is the excess of (a) the aggregate Stated Principal Balance of the
Mortgage Loans for the preceding Distribution Date over (b) (i) before the
Certificate Principal Balances of the Class A-1 and Class A-2 Certificates
have been reduced to zero, the sum of the Certificate Principal Balances of
the Class A-1 and Class A-2 Certificates, or (ii) after the Certificate
Principal Balances of the Class A-1 and Class A-2 Certificates have been
reduced to zero, the Certificate Principal Balance of the most senior Class of
Certificates outstanding as of the preceding Master Servicer Advance Date and
(2) the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans for the preceding Distribution Date.
Required 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.
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.
Rolling Sixty-Day Delinquency Rate: With respect to any Distribution
Date, is the average of the Sixty-Day Delinquency Rates for such Distribution
Date and the two immediately preceding Distribution Dates; provided, however,
that for the Distribution Date in August 2003, the Rolling Sixty-Day
Delinquency Rate for such Distribution Date shall equal the Sixty-Day
Delinquency Rate for such Distribution Date; provided further that for the
Distribution Date in September 2003, the Rolling Sixty-Day Delinquency Rate
for such Distribution Date shall equal the average of the Sixty-Day
Delinquency Rates for such Distribution Date and the immediately preceding
Distribution Date.
Rule 144A: Rule 144A under the Securities Act.
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Rule 144A Letter: As defined in Section 5.02(b).
S&P: Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and its successors.
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.
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: With respect to the Master
Servicer Advance Date in August 2003, the product of: (1) the excess of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-Off
Date, over the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-Off Date that have a scheduled payment of interest due in the related
Due Period, and (2) a fraction, the numerator of which is the weighted average
Net Mortgage Rate of the Mortgage Loans (weighted on the basis of the Stated
Principal Balances thereof for such Distribution Date) and the denominator of
which is 12.
Senior Certificates: The Class A-1, Class A-2 and Class A-R
Certificates.
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 for the preceding Distribution
Date 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.
Sixty-Day Delinquency Rate: With respect to any Distribution Date, a
fraction, expressed as a percentage, the numerator of which is the aggregate
Stated Principal Balance for such Distribution Date of all Mortgage Loans 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, bankruptcy and REO Properties) and the denominator of which is
the aggregate Stated Principal Balance for such Distribution Date of all
Mortgage Loans.
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 other 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 each date following the Due Period in which such Mortgage Loan becomes
a Liquidated Loan. References herein to the Stated Principal Balance of the
Mortgage Loans at any time shall mean the aggregate Stated Principal Balance
of all Mortgage Loans in the Trust Fund as of such time.
Stepdown Date: The earlier to occur of (i) the Distribution Date on
which the Certificate Principal Balances of the Class A Certificates are
reduced to zero, and (ii) the later to occur of (x) the Distribution Date in
August 2006 and (y) the first Distribution Date on which the aggregate
Certificate Principal Balance of the Class A Certificates (after calculating
anticipated distributions on such Distribution Date) is less than or equal to
76.00% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
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Subordinate Certificates: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class B Certificates.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(c).
Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(c), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation Section 1.860F-4(d) and
temporary Treasury regulation Section 301.6231(a)(7)-1T. Initially, this
person shall be the Trustee.
Tax Matters Person Certificate: With respect to the Master REMIC,
REMIC 1 and Subsidiary REMIC, the Class A-R Certificate with a Denomination of
$0.05.
Terminator: As defined in Section 9.01.
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.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: A Trigger Event shall be in effect with respect to
any Distribution Date after the Stepdown Date if either a Delinquency Trigger
Event or a Cumulative Loss Trigger Event exists as of such Distribution Date.
Trigger Event Realized Loss: With respect to a Distribution Date
after the Stepdown Date, the excess of the Stated Principal Balance of a
defaulted Mortgage Loan over the Liquidation Proceeds allocated to principal
that have been received with respect to that Mortgage Loan on or at any time
prior to the last day of the related Due Period
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans (excluding any entitlement to Credit Comeback Excess
Amounts) 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
34
not required to be deposited in the Certificate Account pursuant to Section
3.05(b)(2); (ii) the Certificate Account, the Distribution Account, the
Principal Reserve Fund, the Carryover 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 the 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.
Trustee Advance Rate: With respect to any Advance made by the
Trustee pursuant to Section 4.01(d), a per annum rate of interest determined
as of the date of such Advance equal to the Prime Rate in effect on such date
plus 5.00%.
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.
Trustee Fee Rate: With respect to each Mortgage Loan, the per annum
rate agreed upon in writing on or prior to the Closing Date by the Trustee and
the Depositor, which is 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 2002-41,
67 Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.
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.
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 C
and Class P 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 C and Class P Certificates. Voting Rights will be
allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests.
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Section 1.02 Certain Interpretive Provisions.
All terms defined in this Agreement shall have the defined meanings
when used in any certificate, agreement or other document delivered pursuant
hereto unless otherwise defined therein. For purposes of this Agreement and
all such certificates and other documents, unless the context otherwise
requires: (a) accounting terms not otherwise defined in this Agreement, and
accounting terms partly defined in this Agreement to the extent not defined,
shall have the respective meanings given to them under generally accepted
accounting principles; (b) terms defined in Articles 8 and 9 of the UCC and
not otherwise defined in this Agreement are used as defined in those Articles;
(c) the words "hereof," "herein" and "hereunder" and words of similar import
refer to this Agreement (or the certificate, agreement or other document in
which they are used) as a whole and not to any particular provision of this
Agreement (or such certificate, agreement or document); (d) references to any
Section, Schedule or Exhibit are references to Sections, Schedules and
Exhibits in or to this Agreement, and references to any paragraph, subsection,
clause or other subdivision within any Section or definition refer to such
paragraph, subsection, clause or other subdivision of such Section or
definition; (e) the term "including" means "including without limitation"; (f)
references to any law or regulation refer to that law or regulation as amended
from time to time and include any successor law or regulation; (g) references
to any agreement refer to that agreement as amended from time to time; and (h)
references to any Person include that Person's permitted successors and
assigns.
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 interest rate cap transaction evidenced by the
Confirmation, and to cause all of its obligations in respect of 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.
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(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).
(d) [Reserved]
(e) [Reserved]
(f) [Reserved]
(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 2003-4, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the
Pooling and Servicing Agreement dated as of July 1, 2003, without
recourse" (each such assignment, when duly and validly completed, to
be in recordable form and sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which such
assignment relates);
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(iv) the original recorded assignment or assignments of
the Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any;
and
(vi) the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all riders
thereto or, in the event such original title policy has not been
received from the insurer, such original or duplicate original
lender's title policy and all riders thereto shall be delivered
within one year of the Closing Date.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at the Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has
done so) that such Mortgage Loans have been assigned by the Seller to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer
files (a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY
THE FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Seller further agrees that it will not, and will not
permit the Master Servicer to, and the Master Servicer agrees that it will
not, alter the codes referenced in this paragraph with respect to any Mortgage
Loan during the term of 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
38
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
required to be delivered by the Depositor or the Master Servicer to the
Co-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 Co-Trustee shall complete the
assignment in the manner specified in clause (iii) of the second paragraph of
this Section 2.01(g) 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(g).
So long as the Co-Trustee or its agent maintains an office in the
State of California, the Co-Trustee or its agent 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
39
Property is located in such State. In the event that the Seller fails to
record an assignment of a Mortgage Loan as herein provided within 90 days of
notice of an event set forth in clause (i), (ii) or (iii) of the above
paragraph, the Master Servicer shall prepare and, if required hereunder, file
such assignments for recordation in the appropriate real property or other
records office. The Seller hereby appoints the Master Servicer (and any
successor servicer hereunder) as its attorney-in-fact with full power and
authority acting in its stead for the purpose of such preparation, execution
and filing.
In the case of Mortgage Loans that become the subject of a Principal
Prepayment between the Closing Date and the Cut-off Date, the Seller shall
deposit or cause to be deposited in the Certificate Account the amount
required to be deposited therein with respect to such payment pursuant to
Section 3.05 hereof.
Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date, the Seller shall either (i) deliver to the
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, 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 Loans 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 by Trustee 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
40
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 Loans as 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 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 the Agreement with respect to such Mortgage Loans are in its
possession (except those documents 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
41
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;
(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 Trustee's interest in any Mortgage Loan released pursuant hereto. If
pursuant to the foregoing provisions
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the Seller repurchases a Mortgage Loan that is a MERS Mortgage Loan, the
Master Servicer shall cause MERS to execute and deliver an assignment of the
Mortgage in recordable form to transfer the Mortgage from MERS to the Seller
and shall cause such Mortgage to be removed from registration on the MERS(R)
System in accordance with MERS' rules and regulations.
The 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) above shall constitute the sole remedy
respecting such defect available to the Trustee, the Co-Trustee, the Depositor
and any Certificateholder against the Seller.
It is understood and agreed that the obligation of the Seller to
substitute for or to purchase, pursuant to Section 2.02(a), any Mortgage Loan
whose Mortgage File contains any document or documents that does not meet the
requirements of clauses (i)-(iv) and (vi) above and which defect is not
corrected or cured by the Seller within 90 days from the date it was notified
of such defect, shall constitute the sole remedy respecting such defect
available to the Trustee, the Co-Trustee, the Depositor and any
Certificateholder against the Seller.
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 and the Trustee as follows, as of the date hereof with respect to
the Mortgage Loans:
(1) 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.
(2) 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
43
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.
(3) 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.
(4) The Master Servicer is an approved servicer of
conventional mortgage loans for Xxxxxx Xxx and 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.
(5) 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.
(6) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the 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.
(7) 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.
44
(b) The Seller hereby represents and warrants to the Depositor 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
in the Trust Fund are measured by the Cut-off Date Principal Balance of the
Mortgage Loans in the Trust Fund):
(1) 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.
(2) 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.
(3) The execution and delivery of this Agreement by the
Seller, the sale of the Mortgage Loans by the Seller under this
Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Seller and will not (A) result in a material breach of any term or
provision of the charter or by-laws of the Seller or (B) materially
conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which the Seller is a
party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to the
Seller of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Seller; and the
Seller is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair the Seller's
ability to perform or meet any of its obligations under this
Agreement.
(4) The Seller is an approved seller of conventional
mortgage loans for Xxxxxx Mae and 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.
45
(5) 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.
(6) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the 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.
(7) 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.
(8) 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.
(9) None of the Mortgage Loans are delinquent in payment
of principal and interest.
(10) No Mortgage Loan that is secured by a first lien on
the related Mortgaged Property had a Loan-to-Value Ratio at
origination in excess of 100.00% and no Mortgage Loan that is
secured by a second lien on the related Mortgaged Property had a
Combined Loan-to-Value Ratio at origination in excess of 100%.
(11) Each Mortgage Loan is secured by a valid and
enforceable first or second lien on the related Mortgaged Property,
in each case 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, and (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. Approximately
3.34% of the Mortgage Loans are secured by second liens on the
related Mortgaged Properties.
(12) Immediately prior to the assignment of each Mortgage
Loan to the Depositor, the Seller had good title to, and was the
sole owner of, such Mortgage Loan free and clear of any pledge,
lien, encumbrance or security interest and had full right and
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to this
Agreement.
(13) There is no delinquent tax or assessment lien
against any Mortgaged Property.
46
(14) 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.
(15) 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 (18) below.
(16) As of the Closing Date, to the best of the Seller's
knowledge, each Mortgaged Property is free of material damage and is
in good repair.
(17) 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.
(18) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date
Principal Balance of each such Mortgage Loan or a commitment
(binder) to issue the same was effective on the date of the
origination of each Mortgage Loan, each such policy is valid and
remains in full force and effect, and each such policy was issued by
a title insurer qualified to do business in the jurisdiction where
the Mortgaged Property is located and acceptable to Xxxxxx Mae and
Xxxxxxx Mac and is in a form acceptable to Xxxxxx Mae and 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 (11) above; to the best of the Seller's knowledge, no
claims have been made under such mortgage title insurance policy and
no prior holder of the related Mortgage, including the Seller, has
done, by act or omission, anything that would impair the coverage of
such mortgage title insurance policy.
(19) No Mortgage Loan was the subject of a Principal
Prepayment in full between the Closing Date and the Cut-off Date.
(20) 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.
(21) 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
47
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.
(22) 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.
(23) 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.
(24) 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.
(25) 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.
(26) Each Mortgage Note and each Mortgage is acceptable in
form to Xxxxxx Mae and Xxxxxxx Mac.
(27) 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
(28) The origination, underwriting, servicing and
collection practices with respect to each Mortgage Loan have been in
all respects legal, proper, prudent and
48
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.
(29) There is no pledged account or other security other
than real estate securing the Mortgagor's obligations.
(30) No Mortgage Loan has a shared appreciation feature,
or other contingent interest feature.
(31) Each Mortgage Loan contains a customary "due on
sale" clause.
(32) No less than approximately 77.75% of the Mortgage
Loans are secured by single family detached dwellings. No more than
approximately 1.40% of the Mortgage Loans are secured by two- to
four-family dwellings. No more than approximately 2.54% of the
Mortgage Loans are secured by condominium units. No more than
approximately 1.15% of the Mortgage Loans are secured by
manufactured housing. No more than approximately 17.00% of the
Mortgage Loans are secured by PUDs.
(33) Each Mortgage Loan was originated on or after
January 31, 2002.
(34) Each Mortgage Loan that is an Adjustable Rate
Mortgage Loan, other than a Two-Year Hybrid Mortgage Loan, a
Three-Year Hybrid Mortgage Loan or Five-Year Hybrid Mortgage Loan,
had an initial Adjustment Date no later than July 1, 2006; each
Two-Year Hybrid Mortgage Loan had an initial Adjustment Date no
later than July 1, 2005; and each Three-Year Hybrid Mortgage Loan
had an initial Adjustment Date no later than July 1, 2006.
(35) Approximately 80.45% of the Mortgage Loans provide
for a prepayment penalty.
(36) On the basis of representations made by the
Mortgagors in their loan applications, no more than approximately
1.67% of the Mortgage Loans, are secured by investor properties, and
no less than approximately 97.56% of the Mortgage Loans, are secured
by owner-occupied Mortgaged Properties that are primary residences.
(37) 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 (38)
below contain a standard
49
mortgagee clause naming the Seller or the original mortgagee, and its
successors in interest, as mortgagee, and the Seller has received no
notice that any premiums due and payable thereon have not been paid;
the Mortgage obligates the Mortgagor thereunder to maintain all such
insurance, including flood insurance, at the Mortgagor's cost and
expense, and upon the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to obtain and maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from
the Mortgagor.
(38) 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.
(39) 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.
(40) 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.
(41) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in PUDs. To the best of the Seller's knowledge, no
improvement to a Mortgaged Property includes a cooperative or a
mobile home or constitutes other than real property under state law.
(42) Each Mortgage Loan is being serviced by the Master
Servicer.
(43) 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.
(44) 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
50
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.
(45) The Mortgage Loans originated by the Seller were
underwritten in all material respects in accordance with the
Seller's underwriting guidelines for credit blemished quality
mortgage loans or, with respect to Mortgage Loans purchased by the
Seller were underwritten in all material respects in accordance with
customary and prudent underwriting guidelines generally used by
originators of credit blemished quality mortgage loans.
(46) 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
Mae and Xxxxxxx Mac.
(47) 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.
(48) The Mortgage Rates borne by the Mortgage Loans as of
the Cut-off Date ranged from 4.875% per annum to 13.990% per annum
and the weighted average Mortgage Rate as of the Cut-off Date was
7.503% per annum.
(49) All of the Mortgage Loans in the Mortgage Pool with
Loan-to-Value Ratios that are 65% or greater are Covered Mortgage
Loans. Each Covered Mortgage Loan will be covered by the Mortgage
Insurance Policy until the Loan-to-Value Ratio of such Covered
Mortgage Loan is 60% or less.
(50) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the Master
Servicer's portfolio at the Closing Date as to which the
representations and warranties made as to the Mortgage Loans set
forth in this Section 2.03(b) can be made. No selection was made in
a manner that would adversely affect the interests of
Certificateholders.
(51) The Gross Margins on the Adjustable Rate Mortgage
Loans range from approximately 2.250% to 12.950%, and the weighted
average Gross Margin was approximately 6.935%.
51
(52) Each of the Mortgage Loans in the Mortgage Pool has a
Due Date on or before August 1, 2003.
(53) The Mortgage Loans, individually and in the
aggregate, conform in all material respects to the descriptions
thereof in the Prospectus Supplement.
(54) 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.
(55) 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.
(56) 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 Section 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.
(57) 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. Section 1602(aa).
(58) 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, 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;
(59) 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 principal determining factor in approving such
credit extension. Such underwriting
52
methodology confirmed that at the time of origination
(application/approval) the borrower had a reasonable ability to
make timely payments on the Mortgage Loan;
(60) 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;
(61) 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;
(62) 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;
(63) 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;
(64) 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;
(65) Each Mortgage Loan has a fully assignable life of
loan tax service contract which may be assigned without the payment
of any fee;
(66) 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;
53
(67) Each Mortgage Loan at the time it was originated and
as of the Closing Date complied in all material respects with
applicable local, state and federal laws, including, but not limited
to, all predatory and abusive lending laws; and
(68) None of the Mortgage Loans are "high cost mortgages"
or "high cost mortgage loans" under applicable state law.
(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 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 or 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 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
54
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 deficiencies described in the preceding sentence
(such amount, the "Substitution Adjustment Amount") shall be forwarded by the
Seller to the Master Servicer and deposited by the Master Servicer into the
Certificate Account not later than the Determination Date for the Distribution
Date relating to the Prepayment Period during which the related Mortgage Loan
became required to be purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage Loan,
the Purchase Price therefor shall be deposited in the Certificate Account
pursuant to Section 3.05 on the Determination Date for the Distribution Date
in the month following the month during which such Seller became obligated to
repurchase or replace such Mortgage Loan and upon such deposit of the Purchase
Price, the delivery of the Opinion of Counsel required by Section 2.05, if
any, and the receipt of a Request for Release in the form of Exhibit N hereto,
the 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
55
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 this
Section 2.03 shall survive delivery of the respective Mortgage Files to the
Co-Trustee for the benefit of the Certificateholders with respect to each
Mortgage Loan.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master Servicer
and the Trustee as follows, as of the date hereof:
(1) 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.
(2) The Depositor has the full corporate power and
authority to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement and has
duly authorized, by all necessary corporate action on its part, the
execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and
binding obligation of the Depositor, enforceable against the
Depositor in accordance with its terms, subject, as to
enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and (ii) general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at law.
(3) 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 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.
(4) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect
56
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.
(5) 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, as applicable, and
following the transfer of the Mortgage Loans to it by the Seller, the
Depositor had good title to the Mortgage Loans, and the related Mortgage Notes
were subject to no offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and warranties
set forth in the two immediately preceding paragraphs shall survive delivery
of the Mortgage Files to the 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 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
any REMIC formed hereunder 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.
57
(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(c) with
respect to substitutions are satisfied, a Replacement Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within
90 days of such discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty contained in Section 2.03. The Trustee
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto
in the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty contained
in Section 2.03.
Section 2.06 Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement to the
best of its ability, to the end that the interests of the Holders of the
Certificates may be adequately and effectively protected.
Section 2.07 Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor 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.
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, including
taking all required and appropriate actions under the Mortgage Insurance
Policy on behalf of the Co-Trustee, other than the payment of the Mortgage
Insurance Premium
58
and obtaining the approval of the related Mortgage Insurer with respect to the
appointment of a successor servicer. 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 Trustee 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 Trustee 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 (i) cause any REMIC formed hereunder to
fail to qualify as a REMIC, (ii) result in the imposition of any tax under
section 860(a) or 860(d) of the Code or (iii) cause any Covered Mortgage Loan
to not be covered by the Mortgage Insurance Policy unless the Loan-to-Value
Ratio is less than 65%, but in any case the Master Servicer shall not act 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 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
59
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.
In addition, the Master Servicer shall administer the Mortgage
Insurance Policy on behalf of itself, the Seller, the Depositor, and the
Trustee for the benefit of the Certificateholders, when it is necessary to
make claims and receive payments under the Mortgage Insurance Policy. In
connection with its activities as Master Servicer of the Mortgage Loans, the
Master Servicer agrees to present, on behalf of itself, the Trustee and the
Certificateholders, claims to the insurer under any primary insurance policies
and, in this regard, to take any reasonable action necessary to permit
recovery under any primary insurance policies respecting defaulted Mortgage
Loans. Any amounts collected by the Master Servicer under any primary
insurance policies shall be deposited in the Certificate Account.
The Master Servicer shall take whatever action is appropriate to
maximize the amounts payable under the Mortgage Insurance Policy and to
service the Covered Mortgage Loans in the manner required by the Mortgage
Insurance Policy. The Master Servicer shall prepare and submit all claims
eligible for submission under the Mortgage Insurance Policy and shall perform
all of the obligations of the insured under the Mortgage Insurance Policy. If
the Mortgage Insurance Policy is terminated for any reason, or if on any given
date the rating of the Mortgage Insurer's claims-paying ability is downgraded
below (i) "BBB" from S&P, or its successor in interest, or (ii) "Baa2" from
Xxxxx'x, or its successor in interest, the Master Servicer will use its best
efforts to obtain a comparable policy from an insurer that is acceptable to the
Rating Agencies. The replacement policy will provide coverage equal to the then
remaining coverage of the Mortgage Insurance Policy, if available. However, if
the premium cost of a replacement policy exceeds the premium cost of the
Mortgage Insurance Policy, the coverage amount of the replacement policy will
be reduced so that its premium cost will not exceed the premium cost of the
Mortgage Insurance Policy. In the event the Master Servicer has actual
knowledge that on any given date the rating of the Mortgage Insurer's claims-
paying ability has been downgraded below "AA-" from S&P, the Master Servicer
shall notify S&P of the downgrade.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Monthly Payments or Stated Principal Balances that were made
by the Master Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Master Servicer, upon discovery
or receipt of notice thereof, immediately shall deliver to the Trustee for
deposit in the Distribution Account from its own funds the amount of any such
shortfall and shall indemnify and hold harmless the Trust Fund, the Trustee,
the Depositor and any successor master servicer in respect of any such
liability. Such indemnities shall survive the termination or discharge of this
Agreement. Notwithstanding the foregoing, this Section 3.01 shall not limit
the ability of the Master Servicer to seek recovery of any such amounts from
the related Mortgagor under the terms of the related Mortgage Note, as
permitted by law and shall not be an expense of the Trust.
60
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 (i)
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder and (ii)
that such subservicing agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the ratings on any Class of Certificates,
as evidenced by a letter to that effect delivered by each Rating Agency to the
Depositor. The Master Servicer shall deliver to the Trustee copies of all
Sub-Servicing Agreements, and any amendments or modifications thereof,
promptly upon the Master Servicer's execution and delivery of such
instruments. The Master Servicer shall be entitled to terminate any
Subservicing Agreement and the rights and obligations of any Subservicer
pursuant to any Subservicing Agreement in accordance with the terms and
conditions of such Subservicing Agreement. 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.
Section 3.03 Rights of the Depositor, the Seller, the
Certificateholders and the Trustee in Respect
of the Master Servicer.
None of the Trustee, the Seller, the Certificateholders 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. The Master Servicer
shall afford (and any Subservicing Agreement shall provide that each
Subservicer shall afford) the Depositor and the Trustee, upon reasonable
notice, during normal business hours, access to all records maintained by the
Master Servicer (and any such Subservicer) in respect of the Master Servicer's
rights and obligations hereunder and access to officers of the Master Servicer
(and those of any such Subservicer) responsible for such obligations. Upon
request, the Master Servicer shall furnish to the Depositor and the Trustee
its (and any such Subservicer's) most recent financial statements and such
other information
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relating to the Master Servicer's capacity to perform its obligations under
this Agreement that it possesses. To the extent such information is not
otherwise available to the public, the Depositor and the Trustee shall not
disseminate any information obtained pursuant to the preceding two sentences
without the Masters Servicer's (or any such Subservicer's) written consent,
except as required pursuant to this Agreement or to the extent that it is
necessary to do so (i) in working with legal counsel, auditors, taxing
authorities or other governmental agencies, rating agencies or reinsurers or
(ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction
or decree of any court or governmental authority having jurisdiction over the
Depositor, the Trustee or the Trust Fund, and in either case, the Depositor or
the Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under
this Agreement or exercise the rights of the Master Servicer under this
Agreement; provided by virtue of such performance by the Depositor of its
designee. The Depositor shall not have any responsibility or liability for any
action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement 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.
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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, subject to Section 3.20, any
Prepayment Charge or penalty interest in connection with the prepayment of a
Mortgage Loan and (ii) extend the due dates for payments due on a Mortgage
Note for a period not greater 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:
(1) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
(2) all payments on account of interest on the Mortgage
Loans (net of the related Servicing Fee permitted under Section 3.15
to the extent not previously paid to or withheld by the Master
Servicer);
(3) all Insurance Proceeds;
(4) 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;
(5) all Compensating Interest;
(6) any amount required to be deposited by the Master
Servicer pursuant to Section 3.05(e) in connection with any losses
on Permitted Investments;
(7) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.10 hereof;
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(8) the Purchase Price and any Substitution Adjustment
Amount;
(9) all Advances made by the Master Servicer or the
Trustee pursuant to Section 4.01;
(10) all Prepayment Charges and Master Servicer
Prepayment Charge Payment Amounts; and
(11) 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 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:
(1) the aggregate amount remitted by the Master Servicer
pursuant to the second paragraph of Section 3.08(a); and
(2) any amount required to be deposited by the Master
Servicer pursuant to Section 3.05(e) in connection with any losses
on Permitted Investments.
The foregoing requirements for remittance by the Master Servicer and
deposit by the Trustee into the Distribution Account shall be exclusive. In
the event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time direct the Trustee to withdraw such amount from the
Distribution Account, any provision herein to the contrary notwithstanding.
Such direction may be accomplished by delivering a written notice to the
Trustee that describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 3.08. In no event shall
the Trustee incur liability for withdrawals from the Distribution Account at
the direction of the Master Servicer.
(d) [Reserved].
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(e) Each institution that maintains the Certificate Account
or the Distribution Account shall invest the funds in each such account, as
directed by the Master Servicer, in Permitted Investments, which shall mature
not later than (x) in the case of the Certificate Account, the second Business
Day next preceding the related Distribution Account Deposit Date (except that
if such Permitted Investment is an obligation of the institution that
maintains such Certificate Account, then such Permitted Investment shall
mature not later than the Business Day next preceding such Distribution
Account Deposit Date) and (y) in the case of the Distribution Account, 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, 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 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.
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 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 or the Distribution Account and made in accordance
with this Section 3.05.
(f) The Master Servicer shall give at least 30 days advance
notice to the Trustee, the Seller each Rating Agency 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 or the Carryover Reserve
Fund prior to any change thereof.
(g) Except as otherwise expressly provided in this Agreement,
if any default occurs under any Permitted Investment, the Trustee may and,
subject to Section 8.01 and 8.02(4), at the request of the Holders of
Certificates representing more than 50% of the Voting Rights, shall take any
action appropriate to enforce payment or performance, including the
institution and prosecution of appropriate proceedings.
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.
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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. Upon request, the Master Servicer shall furnish to the
Trustee its most recent publicly available financial statements and any other
information relating to its capacity to perform its obligations under this
Agreement.
Upon reasonable advance notice in writing if required by federal
regulation, the Master Servicer will provide to each Certificateholder or
Certificate Owner that is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation
regarding the Mortgage Loans sufficient to permit such Certificateholder or
Certificate Owner 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 or Certificate Owner for actual expenses incurred by
the Master Servicer in providing such reports and access.
Section 3.08 Permitted Withdrawals from the Certificate
Account, Distribution Account, Carryover Reserve Fund
and the Principal 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 to the Master Servicer, those
other amounts set forth in Section 3.15;
(ii) to reimburse each of the Master Servicer and the
Trustee 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
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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 pay to the Seller any Credit Comeback Excess
Amount;
(iv) to reimburse each of the Master Servicer and the
Trustee for any Nonrecoverable Advance previously made;
(v) to reimburse the Master Servicer from Insurance
Proceeds for Insured Expenses covered by the related Insurance
Policy;
(vi) to pay the Master Servicer any unpaid Servicing Fees
and to reimburse it for any unreimbursed Servicing Advances, the
Master Servicer's right to reimbursement of Servicing Advances
pursuant to this subclause (vi) with respect to any Mortgage Loan
being limited to amounts received on particular Mortgage Loan(s)
(including, for this purpose, Liquidation Proceeds and purchase and
repurchase proceeds) that represent late recoveries of the payments
for which such advances were made pursuant to Section 3.01 or
Section 3.06;
(vii) to pay to the Seller, the Depositor or the Master
Servicer, as applicable, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.12, all amounts received thereon
and not taken into account in determining the related Stated
Principal Balance of such repurchased Mortgage Loan;
(viii) to reimburse the Seller, the Master Servicer or the
Depositor for expenses incurred by any of them in connection with
the Mortgage Loans or Certificates and reimbursable pursuant to
Section 6.03 hereof; provided that such amount shall only be
withdrawn following the withdrawal from the Certificate Account for
deposit into the Distribution Account pursuant to the following
paragraph;
(ix) to withdraw pursuant to Section 3.05 any amount
deposited in the Certificate Account and not required to be
deposited therein; and
(x) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 1:00 p.m. Pacific time on the
Distribution Account Deposit Date, the Master Servicer shall withdraw from the
Certificate Account and remit to the Trustee the Interest Remittance Amount
and Principal Remittance Amount, and the Trustee shall deposit such amount in
the Distribution Account
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
$527.66. Funds on deposit in the Principal Reserve Fund shall
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not be invested. The Principal Reserve Fund shall be treated as an "outside
reserve fund" under applicable Treasury regulations and shall not be part of
any REMIC created under this Agreement. Amounts on deposit in the Principal
Reserve Fund shall not be invested.
On the Business Day before the August 2003 Distribution Date, the
Trustee shall transfer $427.66 from the Principal Reserve Fund to the
Distribution Account the funds on deposit in the Principal Reserve Fund and
shall distribute such amount to the Certificates on the Distribution Date
pursuant to Section 4.04(b).
On the Business Day before the Class P Principal Distribution Date,
the Trustee shall transfer from the Principal Reserve Fund to the Distribution
Account $100.00 and shall distribute such amount to the Class P Certificates
on the Class P Principal Distribution Date. The Trustee shall then terminate
the Principal Reserve Fund.
The Master Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to subclauses (i), (ii),
(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 the Trustee the Trustee Fee on each
Distribution Date;
(ii) 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;
(iii) to pay to the Co-Trustee, for payment to the
Mortgage Insurer as provided below, the Mortgage Insurance Premium;
(iv) to withdraw pursuant to Section 3.05 any amount
deposited in the Distribution Account and not required to be
deposited therein;
(v) to reimburse the Trustee for any unreimbursed
Advances made by it pursuant to Section 4.01(d) hereof, such right
of reimbursement pursuant to this subclause (v) being limited to (x)
amounts received on the related Mortgage Loan(s) in respect of which
any such Advance was made and (y) amounts not otherwise reimbursed
to the Trustee pursuant to Section 3.08(a)(ii) hereof;
(vi) to reimburse the Trustee for any Nonrecoverable
Advance previously made by the Trustee pursuant to Section 4.01(d)
hereof, such right of
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reimbursement pursuant to this subclause (vi) being limited to
amounts not otherwise reimbursed to the Trustee pursuant to Section
3.08(a)(iv) hereof; and
(vii) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
The Co-Trustee shall pay the applicable Mortgage Insurance Premium
to the Mortgage Insurer in accordance with the following wiring instructions:
Bank Name First Union National Bank, N.A.
Bank Address Xxxxxxxxxxxx, XX 00000
XXX# - XXX Xxxxxxxxxxxxx #000000000
XXX# - Fed Wire Transactions #031201467
Account # 2030000861563
Account Name Radian Guaranty
Reference: 03-998045
(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:
(1) to withdraw pursuant to Section 3.05 any amount
deposited in the Carryover Reserve Fund and not required to be
deposited therein; and
(2) 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
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benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the
related Mortgagor or out of Liquidation Proceeds to the extent permitted by
Section 3.08 hereof. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property is located at the
time of origination of the Mortgage Loan in a federally designated special
flood hazard area and such area is participating in the national flood
insurance program, the Master Servicer shall cause flood insurance to be
maintained with respect to such Mortgage Loan. Such flood insurance shall be
in an amount equal to the lesser of (i) the original principal balance of the
related Mortgage Loan, (ii) the replacement value of the improvements that are
part of such Mortgaged Property, or (iii) the maximum amount of such insurance
available for the related Mortgaged Property under the Flood Disaster
Protection Act of 1973, as amended.
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11(a),
when any property subject to a Mortgage has been or is about to be conveyed by
the Mortgagor, the Master Servicer shall to the extent that it has knowledge
of such conveyance, enforce any due-on-sale clause contained in any Mortgage
Note or Mortgage, to the extent permitted under applicable law and
governmental regulations, but only to the extent that such enforcement will
not adversely affect or jeopardize coverage under any Required Insurance
Policy. Notwithstanding the foregoing, the Master Servicer is not required to
exercise such rights with respect to a Mortgage Loan if the Person to whom the
related Mortgaged Property has been conveyed or is proposed to be conveyed
satisfies the terms and conditions contained in the Mortgage Note and Mortgage
related thereto and the consent of the mortgagee under such Mortgage Note or
Mortgage is not otherwise so required under such Mortgage Note or Mortgage as
a condition to such transfer. In the event that the Master Servicer is
prohibited by law from enforcing any such due-on-sale clause, or if coverage
under any Required Insurance Policy would be adversely affected, or if
nonenforcement is otherwise permitted hereunder, the Master Servicer is
authorized, subject to Section 3.11(b), to take or enter into an assumption
and modification agreement from or with the person to whom such property has
been or is about to be conveyed, pursuant to which such person becomes liable
under the Mortgage Note and, unless prohibited by applicable state law, the
Mortgagor remains liable thereon, provided that the Mortgage Loan shall
continue to be covered (if so covered before the Master Servicer enters such
agreement) by the applicable Required Insurance Policies. The Master Servicer,
subject to Section 3.11(b), is also authorized with the prior approval of the
insurers under any Required Insurance Policies to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as Mortgagor and
becomes liable under the Mortgage Note. The Master Servicer shall notify the
Trustee that any such substitution, modification or assumption agreement has
been completed by forwarding to the Co-Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
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(b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.11(a) hereof, in any
case in which a Mortgaged Property has been conveyed to a Person by a
Mortgagor, and such Person is to enter into an assumption agreement or
modification agreement or supplement to the Mortgage Note or Mortgage that
requires the signature of the Trustee, or if an instrument of release signed
by the Trustee is required releasing the Mortgagor from liability on the
Mortgage Loan, the Master Servicer shall prepare and deliver or cause to be
prepared and delivered to the Trustee for signature and shall direct, in
writing, the Trustee to execute the assumption agreement with the Person to
whom the Mortgaged Property is to be conveyed and such modification agreement
or supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding assumptions
or the transfer of the Mortgaged Property to such Person. In connection with
any such assumption, no material term of the Mortgage Note (including, but not
limited to, the Mortgage Rate, the amount of the Scheduled Payment, 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
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
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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 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 any REMIC formed hereunder to
fail to qualify as a REMIC at any time that any Certificates are outstanding,
and the Trust Fund may continue to hold such Mortgaged Property (subject to
any conditions contained in such Opinion of Counsel) after the expiration of
such three-year period. Notwithstanding any other provision of this Agreement,
no Mortgaged Property acquired by the Trust Fund shall be rented (or allowed
to continue to be rented) or otherwise used for the production of income by or
on behalf of the Trust Fund in such a manner or pursuant to any terms that
would (i) cause such Mortgaged Property to fail to qualify as "foreclosure
property" within the meaning of section 860G(a)(8) of the Code or (ii) subject
the Trust Fund to the imposition of any federal, state or local income taxes
on the income earned from such Mortgaged Property under section 860G(c) of the
Code or otherwise, unless the
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Master Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure would exceed the costs and expenses of
bringing such a proceeding. The income earned from the management of any
Mortgaged Properties acquired through foreclosure or other judicial
proceeding, net of reimbursement to the Master Servicer for expenses incurred
(including any property or other taxes) in connection with such management and
net of unreimbursed Servicing Fees, Advances, Servicing Advances and any
management fee paid or to be paid with respect to the management of such
Mortgaged Property, shall be applied to the payment of principal of, and
interest on, the related defaulted Mortgage Loans (with interest accruing as
though such Mortgage Loans were still current) and all such income shall be
deemed, for all purposes in this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes and shall be deposited
into the Certificate Account. To the extent the income received during a
Prepayment Period is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan,
net of any payment to the Master Servicer as provided above, shall be
deposited in the Certificate Account on the next succeeding Determination Date
following receipt thereof for distribution on the related Distribution Date,
except that any Excess Proceeds shall be retained by the Master Servicer as
additional servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds or any income from
an REO Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(vi) 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) [Reserved]
(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 deposited in the Certificate Account. Any purchase of a
Mortgage Loan pursuant to this Section 3.12(c) shall be accomplished by
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remittance to the Master Servicer for deposit in the Certificate Account of
the Purchase Price. The Trustee, upon receipt of certification from the Master
Servicer of such deposit and a Request for Release from the Master Servicer in
the form of Exhibit N hereto, shall release or cause to be released to the
purchaser of such Mortgage Loan the related Mortgage File and shall execute
and deliver such instruments of transfer or assignment prepared by the
purchaser of such Mortgage Loan, in each case without recourse, as shall be
necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the purchaser of such Mortgage Loan shall succeed
to all the Trustee's right, title and interest in and to such Mortgage Loan
and all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The purchaser of such Mortgage Loan
shall thereupon own such Mortgage Loan, and all security and documents, free
of any further obligation to the Trustee or the Certificateholders with
respect thereto.
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 N
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 legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the
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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, the Distribution Account, the Carryover Reserve Fund or
in any Escrow Account (as defined in Section 3.06), or any funds that
otherwise are or may become due or payable to the Trustee for the benefit of
the Certificateholders, to any claim, lien, security interest, judgment, levy,
writ of attachment or other encumbrance, or assert by legal action or
otherwise any claim or right of set off against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that
the Master Servicer shall be entitled to set off against and deduct from any
such funds any amounts that are properly due and payable to the Master
Servicer under this Agreement.
Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer
shall be entitled to retain or withdraw from the Certificate Account out of
each payment of interest on a Mortgage Loan included in the Trust Fund an
amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.
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Additional servicing compensation in the form of any 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
Certificate Owners and the examiners and supervisory agents of the OTS, the
FDIC and such other authorities, access to the documentation regarding the
Mortgage Loans required by applicable regulations of the OTS and the FDIC.
Such access shall be afforded without charge, but only upon reasonable and
prior written request and during normal business hours at the offices of the
Master Servicer designated by it. Nothing in this Section shall limit the
obligation of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Master Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
Section 3.17 Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the Trustee
on or before the 80th day after the end of the Master Servicer's fiscal year,
commencing with its 2003 fiscal year, an Officer's Certificate stating, as to
the signer thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of the performance of the Master
Servicer under this Agreement has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Master Servicer has fulfilled all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such officer and
the nature and status thereof and (iii) to the best of such officer's
knowledge, each Subservicer has fulfilled all its obligations under its
Subservicing Agreement throughout such year, or, if there has been a default
in the fulfillment of any such obligation specifying each such default known
to such officer and the nature and status thereof. The Trustee shall forward a
copy of each such statement to each Rating Agency. Copies of such statement
shall be provided by the Trustee to any Certificateholder upon request at the
Master Servicer's expense, provided such statement is delivered by the Master
Servicer to the Trustee.
Section 3.18 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before the later of (i) the 80th day after the end of the
Master Servicer's fiscal year, commencing with its 2003 fiscal year or (ii)
within 30 days of the issuance of the annual audited financial statements
beginning with the audit for the period ending in 2003, the
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Master Servicer at its expense shall cause a nationally recognized firm of
independent public accountants (who may also render other services to the
Master Servicer, the Seller or any affiliate thereof) that is a member of the
American Institute of Certified Public Accountants to furnish a report to the
Trustee, the Depositor and the Seller in compliance with the Uniform Single
Attestation Program for Mortgage Bankers. Copies of such report shall be
provided by the Trustee to any Certificateholder upon request at the Master
Servicer's expense, provided such report is delivered by the Master Servicer
to the Trustee. Upon written request, the Master Servicer shall provide to the
Certificateholders its publicly available annual financial statements (or the
Master Servicer's parent company's publicly available annual financial
statements, as applicable), if any, promptly after they become available.
Section 3.19 The Cap Contract.
The Seller shall assign all of its right, title and interest in and
to the interest rate cap transaction evidenced by the Cap Contract to, and
shall cause all of its obligations in respect of 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 assets 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
Carryover Reserve Fund.
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 Carryover Reserve Fund to pay Net Rate Carryover for
the applicable Classes of Certificates as provided in Section 4.04(b) on the
Distribution Dates following such termination to and including the Cap
Contract Termination Date, but shall not be available for distribution to the
Class C Certificates pursuant to Section 4.08(c) or to the Seller pursuant to
Section 4.08(c) until such Cap Contract Termination Date. On the Cap Contract
Termination Date for the Cap Contract, after all other distributions on such
date, if any such amounts in respect of early termination of the Cap Contract
remain in the Carryover Reserve Fund, such amounts shall be distributed by the
Trustee to the Class C Certificates.
Section 3.20 Prepayment Charges.
(a) Notwithstanding anything in this Agreement to the
contrary, in the event of a Principal Prepayment in full or in part of a
Mortgage Loan, the Master Servicer may not waive any Prepayment Charge or
portion thereof required by the terms of the related Mortgage Note unless (i)
the Master Servicer determines that such waiver would maximize recovery of
Liquidation Proceeds for such Mortgage Loan, taking into account the value of
such Prepayment
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Charge, or (ii) (A) the enforceability thereof is limited (1) by bankruptcy,
insolvency, moratorium, receivership, or other similar law relating to
creditors' rights generally or (2) due to acceleration in connection with a
foreclosure or other involuntary payment, or (B) the enforceability is
otherwise limited or prohibited by applicable law. In the event of a Principal
Prepayment in full or in part with respect to any Mortgage Loan, the Master
Servicer shall deliver to the Trustee an Officer's Certificate substantially
in the form of Exhibit T no later than the third Business Day following the
immediately succeeding Determination Date with a copy to the Class P
Certificateholders. If the Master Servicer has waived or does not collect all
or a portion of a Prepayment Charge relating to a Principal Prepayment in full
or in part due to any action or omission of the Master Servicer, other than as
provided above, the Master Servicer shall deliver to the Trustee, together
with the Principal Prepayment in full or in part, the amount of such
Prepayment Charge (or such portion thereof as had been waived) for deposit
into the Certificate Account (not later than 1:00 p.m. Pacific time on the
immediately succeeding Master Servicer Advance Date, in the case of such
Prepayment Charge) for distribution in accordance with the terms of this
Agreement.
(b) Upon discovery by the Master Servicer or a Responsible
Officer of the Trustee of a breach of the foregoing subsection (a), the party
discovering the breach shall give prompt written notice to the other parties.
(c) Each Prepayment Charge is permissible and enforceable in
accordance with its terms under applicable state law, except as the
enforceability thereof is limited due to acceleration in connection with a
foreclosure or other involuntary payment.
(d) Upon discovery by the Master Servicer or a Responsible
Officer of the Trustee of a breach of the foregoing clause (c) that materially
and adversely affects right of the Holders of the Class P Certificates to any
Prepayment Charge, the party discovering the breach shall give prompt written
notice to the other parties. Within 60 days of the earlier of discovery by the
Master Servicer or receipt of notice by the Master Servicer of breach, the
Master Servicer shall cure the breach in all material respects or shall pay
into the Certificate Account the amount of the Prepayment Charge that would
otherwise be due from the Mortgagor, less any amount representing such
Prepayment Charge previously collected and paid by the Master Servicer into
the Certificate Account.
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance Reports.
(a) Within two Business Days after each Determination Date,
the Master Servicer shall deliver to the Trustee by telecopy or electronic
mail (or by such other means as the Master Servicer and the Trustee, as the
case may be, may agree from time to time) a Remittance Report with respect to
the related Distribution Date. The Trustee shall not be responsible to
recompute, recalculate or verify any information provided to it by the Master
Servicer.
(b) 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.
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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 Trustee will provide notice to the Master Servicer by
telecopy by the close of business on any Master Servicer Advance Date in the
event that the amount remitted by the Master Servicer to the Trustee on the
Distribution Account Deposit Date is less than the Advances required to be
made by the Master Servicer for such Distribution Date. 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.
(c) In lieu of making all or a portion of such Advance from
its own funds, the Master Servicer may (i) cause to be made an appropriate
entry in its records relating to the Certificate Account that any Amount Held
for Future Distributions has been used by the Master Servicer in discharge of
its obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required
to be distributed pursuant to this Agreement. The Master Servicer shall be
entitled to be reimbursed from the Certificate Account for all Advances of its
own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Mortgage Loan shall continue
until such Mortgage Loan is paid in full or the related Mortgaged Property or
related REO Property has been liquidated or until the purchase or repurchase
thereof (or substitution therefor) from the Trustee pursuant to any applicable
provision of this Agreement, except as otherwise provided in this Section
4.01.
(d) If the Master Servicer determines that it will be unable
to comply with its obligation to make the Advances as and when described in
paragraphs (b) and (c) immediately above, it shall use its best efforts to
give written notice thereof to the Trustee (each such notice a "Trustee
Advance Notice"; and such notice may be given by telecopy), not later than
3:00 P.M., New York time, on the Business Day immediately preceding the
related Master Servicer Advance Date, specifying the amount that it will be
unable to deposit (each such amount an "Advance Deficiency") and certifying
that such Advance Deficiency constitutes an Advance hereunder and is not a
Nonrecoverable Advance. If the Trustee receives a Trustee Advance Notice on or
before 3:30 P.M., New York time on a Master Servicer Advance Date, the Trustee
shall, not later than 3:00 P.M., New York time, on the related Distribution
Date, deposit in the Distribution Account an amount equal to the Advance
Deficiency identified in such Advance Notice unless it is prohibited from so
doing by applicable law. Notwithstanding the foregoing, the Trustee shall not
be required to make such deposit if the Trustee shall have received written
notification from the Master Servicer that the Master Servicer has deposited
or caused to be deposited in the Certificate Account an amount equal to such
Advance Deficiency. All Advances made by the Trustee pursuant to this Section
4.01(d) shall accrue interest on behalf of the Trustee at the Trustee Advance
Rate from and including the date such Advances are made to but excluding the
date of repayment, with such interest being an obligation of the Master
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Servicer and not the Trust Fund. The Master Servicer shall reimburse the
Trustee for the amount of any Advance made by the Trustee pursuant to this
Section 4.01(d) together with accrued interest, not later than 6:00 P.M., New
York time on the Business Day following the related Distribution Date. In the
event that the Master Servicer does not reimburse the Trustee in accordance
with the requirements of the preceding sentence, the Trustee shall immediately
(i) terminate all of the rights and obligations of the Master Servicer under
this Agreement in accordance with Section 7.01 and (ii) subject to the
limitations set forth in Section 3.04, assume all of the rights and
obligations of the Master Servicer hereunder.
(e) The Master Servicer shall, not later than the close of
business on the second Business Day immediately preceding each Distribution
Date, deliver to the Trustee a report (in form and substance reasonably
satisfactory to the Trustee) that indicates (i) the Mortgage Loans with
respect to which the Master Servicer has determined that the related Scheduled
Payments should be advanced and (ii) the amount of the related Scheduled
Payments. The Master Servicer shall deliver to the Trustee on the related
Master Servicer Advance Date an Officer's Certificate of a Servicing Officer
indicating the amount of any proposed Advance determined by the Master
Servicer to be a Nonrecoverable Advance.
Section 4.02 Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Master Servicer shall remit any related Compensating
Interest as part of the related Interest Remittance Amount as provided in this
Agreement. The Master Servicer shall not be entitled to any recovery or
reimbursement for Compensating Interest from the Depositor, the Trustee, the
Seller, the Trust Fund or the Certificateholders.
Section 4.03 [Reserved]
Section 4.04 Distributions.
(a) On each Distribution Date, the Interest Funds for such
Distribution Date shall be allocated by the Trustee from the Distribution
Account in the following order of priority:
(i) concurrently to each Class of Class A-1 and Class
A-2 Certificates, the Current Interest and Interest Carryforward
Amount for each such Class and such Distribution Date, pro rata,
based on their respective entitlements;
(ii) to the Class M-1 Certificates, the Current Interest
for such Class and Distribution Date;
(iii) to the Class M-2 Certificates, the Current Interest
for such Class and Distribution Date;
(iv) to the Class M-3 Certificates, the Current Interest
for such Class and Distribution Date;
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(v) to the Class M-4 Certificates, the Current Interest
for such Class and Distribution Date;
(vi) to the Class M-5 Certificates, the Current Interest
for such Class and Distribution Date;
(vii) to the Class B Certificates, the Current Interest
for such Class and Distribution Date; and
(viii) any remainder, as part of the Excess Cashflow.
(b) 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:
(1) with respect to any Distribution Date prior to the
Stepdown Date or on which a Trigger Event is in effect: from the
Principal Distribution Amount, sequentially:
(A) to the Class A Certificates, sequentially in
the following order:
(i) to the Class A-R Certificates until the
Certificate Principal Balance thereof is reduced to zero;
(ii) to the Class A-1 Certificates, until the
Certificate Principal Balance thereof is reduced to zero, and
(iii) to the Class A-2 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
provided, that notwithstanding the foregoing order of
priority, on any Distribution Date on which the aggregate
Certificate Principal Balance of the Class A Certificates is
greater than the Stated Principal Balances of all Mortgage
Loans in the Mortgage Pool any Principal Distribution Amount
that is to be distributed to the Class A-1 and Class A-2
Certificates will be distributed pro rata (based on
Certificate Principal Balances thereof) and not
sequentially; and
(B) to the Class M-1 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(C) to the Class M-2 Certificates, until the
Certificate Principal Balance thereof is reduced to zero
(D) to the Class M-3 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(E) to the Class M-4 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
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(F) to the Class M-5 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(G) to the Class B Certificates, until the
Certificate Principal Balance thereof is reduced to zero; and
(H) any remainder, as part of the Excess Cashflow.
(2) with respect to each Distribution Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect
from the Principal Distribution Amount, sequentially:
(A) to the Class A Certificates, the Class A
Principal Distribution Amount, sequentially in the following
order:
(i) to the Class A-1 Certificates, until the
Certificate Principal Balance thereof is reduced to zero, and,
(ii) to the Class A-2 Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
provided, that notwithstanding the foregoing order of
priority, on any Distribution Date on which the aggregate
Certificate Principal Balance of the Class A Certificates is
greater than the Stated Principal Balances of all Mortgage
Loans in the Mortgage Pool any Class A Principal
Distribution Amount that is to be distributed to the Class
A-1 and Class A-2 Certificates will be distributed pro rata
(based on Certificate Principal Balances thereof) and not
sequentially; and
(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 M-3 Certificates, the Class M-3
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero;
(E) to the Class M-4 Certificates, the Class M-4
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero;
(F) to the Class M-5 Certificates, the Class M-5
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero;
(G) to the Class B Certificates, the Class B
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero; and
(H) any remainder, as part of the Excess Cashflow;
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(c) With respect to any Distribution Date, any Excess Cashflow
will be paid to the Classes of Certificates in the following order of priority,
in each case to the extent of amounts remaining:
(1) to the Certificateholders 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(b)
above;
(2) to the Class M-1 Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(3) to the Class M-1 Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and
Distribution Date;
(4) to the Class M-2 Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(5) to the Class M-2 Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and
Distribution Date;
(6) to the Class M-3 Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(7) to the Class M-3 Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and
Distribution Date;
(8) to the Class M-4 Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(9) to the Class M-4 Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and
Distribution Date;
(10) to the Class M-5 Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(11) to the Class M-5 Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and
Distribution Date;
(12) to the Class B Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(13) to the Class B Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and
Distribution Date;
(14) to the Carryover Reserve Fund and from the Carryover
Reserve Fund to the Class A-1 Certificates, Class A-2 Certificates,
Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates , Class M-4 Certificates, Class M-5 Certificates
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and Class B Certificates (after application of amounts received
under the Cap Contract to cover Net Rate Carryover), pro rata based
on the Certificate Principal Balances thereof, to the extent needed
to pay any Net Rate Carryover for each such Class; provided that any
Excess Cashflow remaining after such allocation to pay Net Rate
Carryover based on the Certificate Principal Balances of the
Certificates will be distributed to the Class A-1 Certificates, the
Class A-2 Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class
M-5 Certificates and Class B Certificates with respect to which
there remains any unpaid Net Rate Carryover (after the distribution
based on Certificate Principal Balances), pro rata, based on the
amount of such unpaid Net Rate Carryover;
(15) to the Carryover Reserve Fund, in an amount equal to
the Required Secondary Carryover Reserve Fund Deposit (after giving
effect to other deposits and withdrawals therefrom on such
Distribution Date without regard to any excess Cap Contract
proceeds);
(16) to the Class C Certificateholders, the Class C
Distributable Amount for such Distribution Date; provided that if
such Distribution Date is the Distribution Date immediately
following the expiration of the latest Prepayment Charge term or any
Distribution Date thereafter, then any such remaining amounts will
be distributed first, to the holders of the Class P Certificates,
until the Certificate Principal Balance thereof has been reduced to
zero; and second, to the holders of the Class C Certificates, the
Class C Distributable Amount for such Distribution Date; and
(17) to the Class A-R Certificates.
(d) On each Distribution Date on or prior to the Cap Contract
Termination Date, amounts received by the Trustee in respect of the Cap
Contract for such Distribution Date will be withdrawn from the Carryover
Reserve Fund and distributed;
(1) concurrently to each Class of Adjustable Rate
Certificates, pro rata, based on the Certificate Principal Balances
thereof, to the extent needed to pay any Net Rate Carryover for each
such Class; provided that any amounts remaining after such
allocation to pay Net Rate Carryover based on the Certificate
Principal Balances of the Adjustable Rate Certificates will be
distributed to each Class of Adjustable Rate Certificates with
respect to which there remains any unpaid Net Rate Carryover (after
the distribution based on Certificate Principal Balances), pro rata,
based on the amount of such unpaid Net Rate Carryover,;
(2) any remaining amounts to make any Required Secondary
Carryover Reserve Fund Deposit (after all other deposits and
withdrawals from the Carryover Reserve Fund on such Distribution
Date, including the use of any available Excess Cashflow to make
such Required Secondary Carryover Reserve Fund Deposit); and
(3) any remaining amounts to the Class C Certificateholders,
unless the Cap Contract is subject to early termination, in which
case any early termination
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payments received on the Cap Contract shall be deposited by the
Trustee in the Carryover Reserve Fund to cover any Net Rate Cap
Carryover on the Certificates entitled thereto on future
Distribution Dates until the Cap Contract Termination Date.
(e) To the extent that a Class of Adjustable Rate
Certificates receives interest in excess of the Net Rate Cap, such interest
shall be deemed to have been paid to the Carryover Reserve Fund and then paid
by the Carryover Reserve Fund to those Certificateholders. For purposes of the
Code, amounts deemed deposited in the Carryover Reserve Fund shall be deemed
to have first been distributed to the Class C Certificateholders.
(f) On each Distribution Date, all Prepayment Charges
(including amounts deposited in connection with the full or partial waiver of
such Prepayment Charges pursuant to Section 3.20) shall be allocated to the
Class P Certificates. On the Class P Principal Distribution Date, the Trustee
shall make the $100.00 distribution to the Class P Certificates as specified
in Section 3.08.
(g) On each Distribution Date, the Trustee shall allocate the
Applied Realized Loss Amount to reduce the Certificate Principal Balances of
the Subordinate Certificates in the following order of priority:
(1) to the Class B Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(2) to the Class M-5 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(3) to the Class M-4 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(4) to the Class M-3 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(5) to the Class M-2 Certificates until the Certificate
Principal Balance thereof is reduced to zero; and
(6) to the Class M-1 Certificates until the Certificate
Principal Balance thereof is reduced to zero.
Subject to Section 9.02 hereof respecting the final distribution, on
each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a
bank or other entity having appropriate facilities therefor, if (i) such
Holder has so notified the Trustee at least 5 Business Days prior to the
related Record Date and (ii) such Holder shall hold Regular Certificates with
an aggregate initial Certificate Principal Balance 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
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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 second Business Day
following each Determination 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 (including, without limitation, the actual mortgage rate for
each Credit Comeback Loan) 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 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:
(1) 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;
(2) the amount of such distribution to Holders of each
Class allocable to interest;
(3) any Interest Carry Forward Amount for each Class;
(4) 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;
(5) the aggregate of the Stated Principal Balance of the
Mortgage Loans for the Mortgage Pool;
(6) the related amount of the Servicing Fees paid to or
retained by the Master Servicer for the related Due Period;
(7) the Pass-Through Rate for each Class of Certificates
with respect to the current Accrual Period;
(8) the Net Rate Carryover paid on any Class of
Certificates on such Distribution Date and any Net Rate Carryover
remaining on any Class of Certificates on such Distribution Date;
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(9) the amount of Advances included in the distribution
on such Distribution Date;
(10) the amount of Applied Realized Loss Amounts applied
to the Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, M-4 Certificates, Class M-5 Certificates and Class B
Certificates for such Distribution Date;
(11) the cumulative amount of Applied Realized Loss
Amounts applied to the Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, M-4 Certificates, Class M-5
Certificates and Class B Certificates to date;
(12) 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;
(13) 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 and the date of
acquisition thereof;
(14) 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;
(15) the aggregate Stated Principal Balances of all
Liquidated Loans;
(16) with respect to any Liquidated Loan, the loan number
and Stated Principal Balance relating thereto;
(17) whether a Trigger Event has occurred;
(18) the amount of the distribution made to the Holders
of the Class P Certificates;
(19) the aggregate amount of Mortgage Loans in which
respect of which the Master Servicer has submitted claims under the
Mortgage Insurance Policy and the aggregate amount of such claims;
(20) the aggregate amount of claims paid by the Mortgage
Insurer, and the aggregate amount of claims which have not been paid
by the Mortgage Insurer;
(21) the amount, if any, received under the Cap Contract
for such Distribution Date;
(22) [Reserved]; and
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(23) all payments made by the Master Servicer in respect
of Prepayment Interest Shortfalls 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 a Certificateholder, a statement
containing the information set forth in clauses (a)(1), (a)(2) and (a)(6) 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:
(1) 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;
(2) 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;
(3) The applicable Prepayment Assumption and any
interest rate assumptions used in determining the projected
principal and interest cash flows described above;
(4) 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;
(5) 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;
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(6) The amount and timing of any non-interest expenses
of the related REMIC; and
(7) 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 (1), (2), (3) and (4) above
shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06 [Reserved]
Section 4.07 [Reserved]
Section 4.08 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the
Certificates, the Carryover Reserve Fund and shall deposit $10,000 therein.
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) On each Distribution Date, the Trustee shall deposit all
amounts received pursuant to the Cap Contract in the Carryover Reserve Fund.
The Trustee shall make withdrawals from the Carryover Reserve Fund to make
distributions pursuant to Section 4.04(b) hereof. Funds withdrawn from the
Carryover Reserve Fund may not be applied pursuant to any other subsection of
Section 4.04 other than as expressly provided for in this Section 4.08(b).
(c) Any amounts received on the Cap Contract with respect to
a Distribution Date and remaining after the distributions required pursuant to
Section 4.04(d)(1) through (3) and (ii), first, shall be used to make any
Required Secondary Carryover Reserve Fund Deposit (after all other deposits
and withdrawals from the Carryover Reserve Fund on such Distribution Date,
including the use of any available Excess Cashflow to make such Required
Secondary Carryover Reserve Fund Deposit), and second, shall be distributed to
the Class C Certificates; provided, however, that if the Cap Contract is
subject to early termination, early termination payments received on such Cap
Contract shall be deposited by the Trustee in the Carryover Reserve Fund and
withdrawn from the Carryover Reserve Fund to pay any Net Rate Carryover for
the applicable Classes of Certificates as provided in Section 4.04(d)(1)
through (3) on the Distribution Dates following such termination to and
including the Cap Contract Termination Date, but such early termination
payments shall not be available for distribution to the Class C Certificates
on future Distribution Dates until the Cap Contract Termination Date.
(d) Funds in the Carryover Reserve Fund may be invested in
Permitted Investments at the direction of the Majority Holder of the Class C
Certificates, which Permitted Investments shall mature not late than 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 the Carryover Reserve Fund, then
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such Permitted Investment shall mature not later than such Distribution Date)
and shall not be sold or disposed of prior to maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. 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. Any net investment earnings on such amounts shall be
payable to the Holders of the Class C Certificates in accordance with their
Percentage Interests. 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 Carryover Reserve
Fund and made in accordance with this Section 4.08. The Carryover Reserve Fund
will not constitute an asset of any REMIC created hereunder. The Class C
Certificates shall evidence ownership of the Carryover Reserve Fund for
federal tax purposes.
ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto
as Exhibits A-1 through A-8, B, C, 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 Multiples in Original Certificate
Class Minimum Denomination Excess of Minimum Principal Balance
------------------------------- ---------------------------- ---------------------------- ----------------------------
A-1 $20,000 $1,000 $81,000,000
A-2 $20,000 $1,000 $164,838,000
M-1 $20,000 $1,000 $12,465,000
M-2 $20,000 $1,000 $3,462,000
M-3 $20,000 $1,000 $6,925,000
M-4 $20,000 $1,000 $2,770,000
M-5 $20,000 $1,000 $2,770,000
B $20,000 $1,000 $2,770,000
A-R $99.95(1) N/A $100
C N/A N/A 100%
P $100 N/A $100
(1) The Tax Matters Person Certificate related to the Class A-R Certificates 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
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such Certificate a certificate of authentication substantially in the form set
forth as attached hereto executed by the Trustee by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication. On the Closing Date, the Trustee shall
authenticate the Certificates to be issued at the written direction of the
Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c)
below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration
of Transfer of any Certificate, the Trustee shall 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
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"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 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, 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 Residual Certificate,
such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I-1), to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan or arrangement subject
to Section 4975 of the Code, or a Person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement, or (ii) in
the case of an ERISA-Restricted Certificate that has been the subject of an
ERISA-Qualifying Underwriting, if the purchaser is an insurance company, a
representation that the purchaser is an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general
account" (as such term is defined in section V(e) of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of
such Certificates are covered under Sections I and III of PTCE 95-60 or (iii)
in the case of any ERISA-Restricted Certificate presented for registration in
the name of an employee benefit plan or arrangement subject to ERISA, or a
plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or
arrangement or any other person acting on behalf of any such plan or
arrangement, an Opinion of Counsel satisfactory to the Trustee, upon which the
Trustee and the Master Servicer may rely, to the effect that the purchase or
holding of such ERISA-Restricted Certificate will not result in a non-exempt
prohibited transaction under ERISA or the Code and will not subject the
Trustee or the Master Servicer to any obligation in addition to those
expressly undertaken in this Agreement, which Opinion of Counsel shall not be
an expense of the Trustee or the Master Servicer. For purposes of clauses (i)
and (ii) of the preceding sentence, such representation shall be deemed to
have been made to the Trustee by the transferee's acceptance of an
ERISA-Restricted Certificate (or the acceptance by a Certificate Owner of the
beneficial interest in any such Class of ERISA-Restricted Certificates) unless
the Trustee shall have received from the
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transferee an alternative representation acceptable in form and substance to
the Master Servicer and the Depositor. Notwithstanding anything else to the
contrary herein, any purported transfer of an ERISA-Restricted Certificate to
or on behalf of an employee benefit plan or arrangement subject to Section 406
of ERISA or a plan or arrangement subject to Section 4975 of the Code without
the delivery to the Trustee and the Master Servicer of an Opinion of Counsel
satisfactory to the Trustee and the Master Servicer meeting the requirements
of clause (iii) of the first sentence of this paragraph as described above
shall be void and of no effect. The Trustee shall be under no liability to any
Person for any registration of transfer of any ERISA-Restricted Certificate
that is in fact not permitted by this Section 5.02(b) or for making any
payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the Trustee, with respect to the transfer of such Classes of
Certificates, required delivery of such certificates and other documentation
or evidence as are expressly required by the terms of this Agreement and
examined such certificates and other documentation or evidence to determine
compliance as to form with the express requirements hereof. The Trustee shall
be entitled, but not obligated, to recover from any Holder of any
ERISA-Restricted Certificate that was in fact an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan or arrangement subject
to Section 4975 of the Code or a Person acting on behalf of any such plan or
arrangement at the time it became a Holder or, at such subsequent time as it
became such a plan or arrangement or Person acting on behalf of such a plan or
arrangement, all payments made on such ERISA-Restricted Certificate at and
after either such time. Any such payments so recovered by the Trustee shall be
paid and delivered by the Trustee to the last preceding Holder of such
Certificate that is not such a plan or arrangement or Person acting on behalf
of a plan or arrangement.
(c) Each Person who has or who acquires any Ownership
Interest in a Class A-R Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions, and the rights of each Person acquiring any Ownership
Interest in a Class A-R Certificate are expressly subject to the following
provisions:
(1) 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.
(2) No Ownership Interest in a Class A-R Certificate may
be registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class A-R Certificate
unless, the Trustee shall have been furnished with an affidavit (a
"Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit I-1.
(3) 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
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Person, if it has actual knowledge that such Person is not a
Permitted Transferee or that such Transfer Affidavit is false.
(4) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions
of this Section 5.02(c) shall be absolutely null and void and shall
vest no rights in the purported Transferee. If any purported
transferee shall become a Holder of a Class A-R Certificate in
violation of the provisions of this Section 5.02(c), then the last
preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer
of such Class A-R Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Class
A-R Certificate that is in fact not permitted by Section 5.02(b) and
this Section 5.02(c) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so
long as the Transfer was registered after receipt of the related
Transfer Affidavit and Transferor Certificate. The Trustee shall be
entitled but not obligated to recover from any Holder of a Class A-R
Certificate that was in fact not a Permitted Transferee at the time
it became a Holder or, at such subsequent time as it became other
than a Permitted Transferee, all payments made on such Class A-R
Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee
to the last preceding Permitted Transferee of such Certificate.
(5) 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 any REMIC formed 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 affidavits,
certifications and opinions referred to above in this section 5.02 shall not
be an expense of the Trust Fund, the Trustee, the Depositor, the Seller or the
Master Servicer.
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Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and of the ownership thereof and (b) there is
delivered to the Master Servicer and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like Class, tenor and Percentage Interest. In connection
with the issuance of any new Certificate under this Section 5.03, the Trustee
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any replacement Certificate issued pursuant to this Section 5.03 shall
constitute complete and indefeasible evidence of ownership in the Trust Fund,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time. All Certificates surrendered to the
Trustee under the terms of this Section 5.03 shall be canceled and destroyed
by the Trustee in accordance with its standard procedures without liability on
its part.
Section 5.04 Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master
Servicer or the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and none of the Master Servicer or the Trustee or 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 or Certificate Owners (a)
request such information in writing from the Trustee, (b) state that such
Certificateholders or Certificate Owners desire to communicate with other
Certificateholders or Certificate Owners with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders or Certificate Owners propose to
transmit or if the Depositor or Master Servicer shall request such information
in writing from the Trustee, then the Trustee shall, within ten Business Days
after the receipt of such request, provide the Depositor, the Master Servicer
or such Certificateholders or Certificate Owners 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 or Certificate
Owner, by receiving and holding a Certificate, agree that the Trustee shall
not be held accountable by reason of the disclosure of any such information as
to the list of the Certificateholders hereunder, regardless of the source from
which such information was derived.
Section 5.06 Book-Entry Certificates.
The Book-Entry Certificates, upon original issuance, shall be issued
in the form of one typewritten Certificate (or more than one, if required by
the Depository) for each Class of
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such Certificates, to be delivered to the Depository by or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate
Owner of such Certificates will receive a definitive certificate representing
such Certificate Owner's interest in such Certificates, except as provided in
Section 5.08. Unless and until definitive, fully registered Certificates
("Definitive Certificates") have been issued to the Certificate Owners of such
Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor, the Seller, the Master Servicer and the
Trustee may deal with the Depository and the Depository Participants for all
purposes (including the making of distributions) as the authorized
representative of the respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued pursuant to Section 5.08, the
Depository will make book-entry transfers among the Depository Participants
and receive and transmit distributions of principal and interest on the
related Certificates to such Depository Participants;
(e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants; and
(g) to the extent 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.
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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.
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.
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Section 6.02 Merger or Consolidation of the Depositor, the
Master Servicer or the Seller.
The Depositor will keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of
the United States or under the laws of one of the states thereof and will
obtain and preserve its qualification or registration to do business as a
foreign partnership in each jurisdiction in which such qualification or
registration is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Depositor, the Master Servicer or the
Seller may be merged or consolidated, or any Person resulting from any merger
or consolidation to which the Depositor, the Master Servicer or the Seller
shall be a party, or any person succeeding to the business of the Depositor,
the Master Servicer or the Seller, shall be the successor of the Depositor,
the Master Servicer or the Seller, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided that
the successor or surviving Person to the Master Servicer shall be qualified to
service mortgage loans on behalf of Xxxxxx Xxx and Xxxxxxx Mac.
Section 6.03 Limitation on Liability of the Depositor, the Seller,
the Master Servicer and Others.
None of the Depositor, the Seller or the Master Servicer or any of
the directors, officers, employees or agents of the Depositor, the Seller or
the Master Servicer shall be under any liability to the Trustee (except as
provided in Section 8.05), the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided that this
provision shall not protect the Depositor, the Seller, the Master Servicer or
any such Person against any breach of representations or warranties made by it
herein or protect the Depositor, 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
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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 (i) upon determination that its duties hereunder
are no longer permissible under applicable law or (ii) upon appointment of a
successor servicer that is reasonably acceptable to the Trustee and the
written confirmation from each Rating Agency (which confirmation shall be
furnished to the Depositor and the Trustee) that such resignation will not
cause such Rating Agency to reduce the then current rating of the
Certificates. Any such determination pursuant to clause (i) of the preceding
sentence permitting the resignation of the Master Servicer shall be evidenced
by an Opinion of Counsel to such effect delivered to the Trustee. No
resignation of the Master Servicer shall become effective until the Trustee
shall have assumed the Master Servicer's responsibilities, duties, liabilities
(other than those liabilities arising prior to the appointment of such
successor) and obligations under this Agreement.
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 and Xxxxxxx Mac
for persons performing servicing for mortgage loans purchased by Xxxxxx Mae
and Xxxxxxx Mac. In the event that any such policy or bond ceases to be in
effect, the Master Servicer shall use its reasonable best efforts to obtain a
comparable replacement policy or bond from an insurer or issuer, meeting the
requirements set forth above as of the date of such replacement.
The Master Servicer shall provide the Trustee (upon such party's
reasonable request) with copies of any such insurance policies and fidelity
bond. The Master Servicer shall be deemed to have complied with this provision
if an Affiliate of the Master Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Master Servicer.
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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:
(1) 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(b) or (c) hereof, for one Business Day, after the date
on which written notice of such failure shall have been given to the
Master Servicer by the Trustee or the Depositor, or to the Trustee
and the Master Servicer by the Holders of Certificates evidencing
not less than 25% of the Voting Rights evidenced by the
Certificates; or
(2) 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
(3) 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
(4) 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
(5) 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; or
(6) the Master Servicer shall fail to reimburse in full
the Trustee not later than 6:00 P.M., New York time on the Business
Day following the related
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Distribution Date Date for any Advance made by the Trustee pursuant
to Section 4.01(d) together with accrued and unpaid interest.
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 of
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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 been approved
by the Mortgage Insurer if required, 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 and indemnities 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, 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
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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 Co-Trustee
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, 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.
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:
(1) 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
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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;
(2) 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;
(3) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of the
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; and
(4) without in any way limiting the provisions of this
Section 8.01 or Section 8.02 hereof, the Trustee shall be entitled
to rely conclusively on the information delivered to it by the
Master Servicer in a Trustee Advance Notice in determining whether
or not it is required to make an Advance under Section 4.01(d),
shall have no responsibility to ascertain or confirm any information
contained in any Trustee Advance Notice, and shall have no
obligation to make any Advance under Section 4.01(d) in the absence
of a Trustee Advance Notice.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(1) 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;
(2) 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;
(3) 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;
(4) 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
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to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing so to do by the Holders of
each Class of Certificates evidencing not less than 25% of the
Voting Rights of such Class; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee not reasonably
assured to the Trustee by such Certificateholders, the Trustee may
require reasonable indemnity against such expense, or liability from
such Certificateholders as a condition to taking any such action;
(5) 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;
(6) 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;
(7) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than as issuer of the investment security);
(8) 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
(9) 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, as applicable, shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof
at the trial or other proceeding relating thereto, and any such suit, action
or proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
Section 8.03 Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Trustee's execution and authentication of the
Certificates. The
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Trustee shall not be accountable for the use or application by the Depositor
or the Master Servicer of any funds paid to the Depositor or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from
the Certificate Account by the Depositor or the Master Servicer.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must
engage persons not regularly in its employ to perform acts or services on
behalf of the Trust Fund, which acts or services are not in the ordinary
course of the duties of a trustee, paying agent or certificate registrar, in
the absence of a breach or default by any party hereto, the reasonable
compensation, expenses and disbursements of such persons, except any such
expense, disbursement or advance as may arise from its negligence, bad faith
or willful misconduct). The Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Master Servicer and held
harmless against any loss, liability or expense (i) incurred in connection
with any legal action relating to 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
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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 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.
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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 ratings of the
Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to
mail such notice within 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
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 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
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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:
(1) 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, 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;
(2) No trustee hereunder shall be held personally liable
by reason of any act or omission of any other trustee hereunder; and
(3) 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 each REMIC created
pursuant to the Preliminary Statement qualifies as, a "real estate mortgage
investment conduit" as defined in and in accordance with the
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REMIC Provisions. In furtherance of such intention, the Trustee covenants and
agrees that it shall act as agent (and the Trustee is hereby appointed to act
as agent) on behalf of the Trust Fund and that in such capacity it shall: (a)
prepare and file, or cause to be prepared and filed, in a timely manner, a
U.S. Real Estate Mortgage Investment Conduit Income Tax Returns (Form 1066 or
any successor form adopted by the Internal Revenue Service) and prepare and
file or cause to be prepared and filed with the Internal Revenue Service and
applicable state or local tax authorities income tax or information returns
for each taxable year with respect to each REMIC created hereunder containing
such information and at the times and in the manner as may be required by the
Code or state or local tax laws, regulations, or rules, and furnish or cause
to be furnished to Certificateholders the schedules, statements or information
at such times and in such manner as may be required thereby; (b) within thirty
days of the Closing Date, furnish or cause to be furnished to the Internal
Revenue Service, on Forms 8811 or as otherwise may be required by the Code,
the name, title, address, and telephone number of the person that the Holders
of the Certificates may contact for tax information relating thereto, together
with such additional information as may be required by such Form, and update
such information at the time or times in the manner required by the Code for
the Trust Fund; (c) make or cause to be made elections, 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
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governmental taxing agency, extend any statute of limitations relating to any
tax item of the Trust Fund, and otherwise act on behalf of any REMIC created
hereunder in relation to any tax matter involving any such REMIC.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows
of the Certificates and the Mortgage Loans. Thereafter, the Depositor shall
provide to the Trustee promptly upon written request therefor, any such
additional information or data that the Trustee may, from time to time,
request in order to enable the Trustee to perform its duties as set forth
herein. The Depositor hereby indemnifies the Trustee for any losses,
liabilities, damages, claims or expenses of the Trustee arising from any
errors or miscalculations of the Trustee that result from any failure of the
Depositor to provide, or to cause to be provided, accurate information or data
to the Trustee on a timely basis.
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 C Certificates, second, to the Class B Certificates (pro rata), third,
to the Class M-5 Certificates (pro rata), fourth, to the Class M-4
Certificates (pro rata), fifth, to the Class M-3 Certificates (pro rata),
sixth, to the Class M-2 Certificates (pro rata), seventh, to the Class M-1
Certificates (pro rata) and eighth, to all Classes of Class A Certificates
(pro rata). Notwithstanding anything to the contrary contained herein, to the
extent that such tax is payable by the Class A-R Certificates, the Trustee is
hereby authorized to retain on any Distribution Date, from the Holders of the
Class A-R Certificates (and, if necessary, second, from the Holders of the all
other Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such
tax. The Trustee agrees to promptly notify in writing the party liable for any
such tax of the amount thereof and the due date for the payment thereof.
The Trustee shall treat the Carryover Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation 1.860G-2(h) that is
owned by the holders of the Class C Certificates, and that is not an asset of
any REMIC created hereunder. The Trustee shall treat the rights of the holders
of each Class of certificates (other than the Class P and Class A-R
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Certificates) to receive payments from the Carryover Reserve Fund as rights in
an interest rate cap contract written by: (i) the Cap Contract Counterparty in
respect of any Net Rate Carryover funded by the Cap Contract and in respect of
any residual payments from the Cap Contract received by the Class C
Certificates, and (ii) the holders of the Class A-R and Class C Certificates,
as applicable, in respect of any Net Carryover funded by Excess Cashflow.
Thus, each Certificate (other than the Class P and Class A-R Certificates)
shall be treated as representing ownership of not only a Master REMIC regular
interest, 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 in
respect of the Adjustable Rate Certificates has a value of $1,272,000 and that
each other interest rate cap contract has a value of $5,000.
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. In addition, the Co-Trustee shall act as the insured under the
Mortgage Insurance Policy and hereby directs the Master Servicer, on behalf of
the Co-Trustee, to take all actions appropriate or required of the Co-Trustee
under the Mortgage Insurance Policy, other than the payment of the Mortgage
Insurance Premium and obtaining the approval of the Mortgage Insurer with
respect to the appointment of a successor servicer.
(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:
(1) 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
(2) 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.
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(c) Except as otherwise provided in paragraph (b) above:
(1) 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;
(2) 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;
(3) 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;
(4) 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;
(5) 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
(6) 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
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provision of law in regard to the compensation of a trustee of an express
trust) for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Co-Trustee and (ii) to pay or reimburse the Co-Trustee, upon
its request, for all reasonable expenses, disbursements and advances incurred
or made by the Co-Trustee on behalf of the Trust Fund in accordance with any
of the provisions of this Agreement (including, without limitation: (A) the
reasonable compensation and the expenses and disbursements of its counsel, but
only for representation of the Co-Trustee acting in its capacity as Co-Trustee
hereunder and (B) to the extent that the Co-Trustee must engage persons not
regularly in its employ to perform acts or services on behalf of the Trust
Fund, which acts or services are not in the ordinary course of the duties of a
trustee, paying agent or certificate registrar, in the absence of a breach or
default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons, except any such expense, disbursement or
advance as may arise from its negligence, bad faith or willful misconduct).
The Co-Trustee and any director, officer, employee or agent of the Co-Trustee
shall be indemnified by the Master Servicer and held harmless against any
loss, liability or expense (i) incurred in connection with any legal action
relating to this Agreement 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.
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
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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.
Section 8.13 Access to Records of the Trustee.
The Trustee and any Co-Trustee shall afford the Seller, the
Depositor, the Master Servicer and each Certificate Owner upon reasonable
notice during normal business hours access to all records maintained by the
Trustee or Co-Trustee in respect of its duties under this Agreement and access
to officers of the Trustee responsible for performing its duties. Upon
request, the Trustee or Co-Trustee shall furnish the Depositor, the Master
Servicer and any requesting Certificate Owner with its most recent financial
statements. The Trustee shall cooperate fully with the Seller, the Master
Servicer, the Depositor and the Certificate Owner for review and copying any
books, documents, or records requested with respect to the Trustee's and
Co-Trustee's respective duties under this Agreement. The Seller, the
Depositor, the Master Servicer and the Certificate Owner shall not have any
responsibility or liability for any action for failure to act by the Trustee
or Co-Trustee and are not obligated to supervise the performance of the
Trustee under this Agreement or otherwise.
Section 8.14 Suits for Enforcement.
If an Event of Default or other material default by the Master
Servicer or the Depositor under this Agreement occurs and is continuing, at
the direction of the Certificateholders holding not less than 51% of the
Voting Rights, the Trustee shall proceed to protect and enforce its rights and
the rights of the Certificateholders under this Agreement by a suit, action,
or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable, or other remedy, as the Trustee, being advised
by counsel, and subject to the foregoing, shall deem most effectual to protect
and enforce any of the rights of the Trustee and the Certificateholders.
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 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 an 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
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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. Xxxxx, living on the date hereof and (ii) the Latest Possible Maturity
Date.
The right to purchase all Mortgage Loans and REO Properties by 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
ten percent (10%) or less 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 related 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 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 pursuant to clause (a) of
Section 9.01, at least 20 days prior to the date notice is to be mailed to the
affected Certificateholders, such electing party shall notify the Depositor
and the Trustee of the date such electing party intends to terminate and of
the applicable repurchase price of the related Mortgage Loans and REO
Properties.
Notice of any termination, 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
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Business Day prior to the applicable Distribution Date in an amount equal to
the final distribution in respect of the Certificates. Upon such final deposit
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 Mortgage Loans.
Upon presentation and surrender of the 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 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 Terminator exercises its purchase
option, the Trust Fund shall be terminated in accordance with the following
additional requirements, unless the Trustee have been supplied with an Opinion
of Counsel, at the expense of the Terminator, 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
delivered to the Trustee and the Depositor obtained at the expense of the
Terminator;
(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 to the Terminator 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
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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. The Trustee shall attach a statement to the
final federal income tax return for each of any REMIC created hereunder
stating that pursuant to Treasury Regulation Section 1.860F-1, the first day
of the 90-day liquidation period for each the REMIC was the date on which the
Trustee sold the assets of the Trust Fund to the Master Servicer.
(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 Terminator.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor,
the Master Servicer, the Seller the Co-Trustee and the Trustee, without the
consent of any of the Certificateholders to cure any ambiguity, to correct or
supplement any provisions herein, or to make such other provisions with
respect to matters or questions arising under this Agreement, as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Certificateholder; provided that any such amendment shall
be deemed not to 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. Any
amendment described above, made solely to conform this Agreement to the
Prospectus Supplement shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders. Notwithstanding the
foregoing, no amendment that significantly changes the permitted activities of
the trust created by this Agreement may be made without the consent of
Certificateholders representing not less than 51% of the Voting Rights of each
Class of Certificates affected by such amendment.
The Trustee, the Co-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
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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, the Co-Trustee 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 shall (i) reduce in any manner
the amount of, or delay the timing of, payments required to be distributed on
any Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing 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, Trustee
shall not consent to any amendment to this Agreement unless each 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 any REMIC formed
hereunder 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, reasonably 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.
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Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages
are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Master Servicer at its
expense.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one
and the same instrument.
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties.
It is the express intent of the parties hereto that the conveyance
of the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Depositor, or if for any other
reason this Agreement is held or deemed to create a security interest in such
assets, then (i) this Agreement shall be deemed to be a security agreement
(within the meaning of the Uniform Commercial Code of the State of New York)
with respect to all such assets and security interests and (ii) the conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
pursuant to the terms of this Agreement by the Depositor to the Trustee, for
the benefit of the Certificateholders, of a security interest in all of the
assets that constitute the Trust Fund, whether now owned or hereafter
acquired.
The Depositor for the benefit of the Certificateholders shall, to
the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the assets of the Trust Fund, such security interest would be
deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of the Agreement. The
Depositor shall arrange for filing any Uniform Commercial Code continuation
statements in connection with any security interest granted or assigned to the
Trustee for the benefit of the Certificateholders.
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Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly
provide notice to each Rating Agency with respect to each of the following of
which it has actual knowledge:
(1) Any material change or amendment to this Agreement;
(2) The occurrence of any Event of Default that has not
been cured;
(3) The resignation or termination of the Master Servicer
or the Trustee and the appointment of any successor;
(4) The repurchase or substitution of Mortgage Loans
pursuant to Sections 2.02, 2.03, 2.04 and 3.12; and
(5) The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
(6) Each report to Certificateholders described in
Section 4.05;
(7) Each annual statement as to compliance described in
Section 3.17; and
(8) 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,
facsimile number: (000) 000-0000, Attention: Xxxxx X. Xxxxxxx, or such other
address as may be hereafter furnished to the Seller, the Master Servicer and
the Trustee by the Depositor in writing; (ii) in the case of the Seller,
Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
facsimile number (000) 000-0000, Attention: Xxxxx X. Xxxxxxx, or such other
address as may be hereafter furnished to the Depositor, the Master Servicer
and the Trustee by the Seller in writing; (iii) in the case of the Master
Servicer, Countrywide Home Loans Servicing LP, 0000 Xxxxxxxxx Xxxxx, Xxxxx,
Xxxxx 00000, facsimile number (000) 000-0000, Attention: Xxxx Xxxx or such
other address as may be hereafter furnished to the Depositor, the Seller and
the Trustee by the Master Servicer in writing; (iv) in the case of the
Trustee, The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust MBS Administration, CWABS, Series 2003-4, 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, or such other address as the Co-Trustee may be hereafter furnished
to the Depositor, the Master Servicer and the Trustee; and (vi) in the case of
the Rating Agencies, (x) Xxxxx'x Investors Service, Inc., Attention: ABS
Monitoring Department, 00 Xxxxxx Xxxxxx,
000
Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (y) Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Attention: Mortgage
Surveillance Group, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. Notices
to Certificateholders shall be deemed given when mailed, first postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
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
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themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder or to
enforce any right under this Agreement, except in the manner herein provided
and for the common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 10.08, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 10.09 Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor, the Seller or the Trustee during
the Master Servicer's normal business hours, to examine all the books of
account, records, reports and other papers of the Master Servicer relating to
the Mortgage Loans, to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants selected by the
Depositor, the Seller or the Trustee and to discuss its affairs, finances and
accounts relating to the Mortgage Loans with its officers, employees and
independent public accountants (and by this provision the Master Servicer
hereby authorizes such accountants to discuss with such representative such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any out-of-pocket expense incident to the
exercise by the Depositor, the Seller or the Trustee of any right under this
Section 10.08 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.
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IN WITNESS WHEREOF, the parties hereto 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,
as Trustee
By: /s/ Xxxxxxxx Xxxxxxxxxxx
-----------------------------------------
Name: Xxxxxxxx Xxxxxxxxxxx
Title: Vice President
BNY WESTERN TRUST COMPANY,
as Co-Trustee
By: /s/ Xxxxxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
THE BANK OF NEW YORK
(solely with respect to its obligations under
Section 4.01(d))
By: /s/ Xxxxxxxx Xxxxxxxxxxx
------------------------------------------
Name: Xxxxxxxx Xxxxxxxxxxx
Title: Vice President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 31st day of July, 2003, before me, a notary public in and
for said State, appeared Xxxxx Xxxxxxx, personally known to me on the basis of
satisfactory evidence to be the Executive Vice President of Countrywide Home
Loans, Inc., one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such
corporation and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
--------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 31st day of July, 2003, before me, a notary public in and
for said State, appeared Xxxxx Xxxxxxx, personally known to me on the basis of
satisfactory evidence to be the Senior Vice President of Countrywide GP, Inc.,
the parent company of Countrywide Home Loans Servicing LP, one of the
organizations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such limited partnership and
acknowledged to me that such limited partnership executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
--------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 31st day of July, 2003, before me, a notary public in and
for said State, appeared Xxxxx Xxxxxxx, personally known to me on the basis of
satisfactory evidence to be the Vice President of CWABS, Inc., one of the
corporations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such corporation and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxx
--------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 31st day of July, 2003 before me, a notary
public in and for said State, appeared , 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/ Xxxxx Xxxxxxx
--------------------------------------
Notary Public
[Notarial Seal]
Exhibit A-1
through A-8
[Exhibits A-1 through A-8 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 P Certificate
as delivered.
[See appropriate documents delivered at closing.]
B-1
Exhibit C
Exhibit C is a photocopy
of the Class C 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 (Class A-R)
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: CWABS Asset-Backed Certificates, Series 2003-4
----------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of July 1, 2003 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, the undersigned, as
Trustee, BNY Western Trust Company, as Co-Trustee, 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.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
G-1-1
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the 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: CWABS Asset-Backed Certificates, Series 2003-4
----------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of July 1, 2003 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, the undersigned, as
Trustee, BNY Western Trust Company, as Co-Trustee, 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) original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _______________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller, or, if the original Mortgage Note has been lost or destroyed and
not replaced, an original lost note affidavit from the Seller, stating that
the original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;
(ii) the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage, [and in the case of each Mortgage Loan
that is a MERS Mortgage Loan, the original Mortgage, noting thereon the
presence of the MIN of the Mortgage Loan and language indicating that the
Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence
of recording indicated thereon, or a copy of the Mortgage certified by the
public recording office in which such Mortgage has been recorded];
(iii) the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2003-4, CWABS, Inc., by The Bank of New York, a New York
banking corporation, as trustee under the Pooling and Servicing Agreement
dated as of July 1, 2003, without recourse", or, in the case of each Mortgage
Loan with respect to property located in the State of California that is not a
MERS Mortgage Loan, a duly executed assignment of the Mortgage in blank (each
such assignment, when duly and validly completed, to be in recordable form and
sufficient to effect
G-2-1
the assignment of and transfer to the assignee thereof, under the Mortgage to
which such assignment relates);
(iv) original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage [(noting the
presence of a MIN in the case of each MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, with evidence of
recording thereon if recordation thereof is permissible under applicable law;
and
(vi) the original or duplicate original lender's title policy or
a printout of the electronic equivalent and all riders thereto or, in the
event such original title policy has not been received from the insurer, any
one of an original title binder, an original preliminary title report or an
original title commitment, or a copy thereof certified by the title company,
with the original policy of title insurance to be delivered within one year of
the Closing Date.
In the event that in connection with any Mortgage Loan that is
not a MERS Mortgage Loan the Seller cannot deliver the original recorded
Mortgage or all interim recorded assignments of the Mortgage satisfying the
requirements of clause (ii), (iii) or (iv), as applicable, the Co-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
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 Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:
----------------------------
Name:
Title:
G-2-3
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: CWABS Asset-Backed Certificates, Series 2003-4
----------------------------------------------
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 Pooling and Servicing Agreement
dated as of July 1, 2003 (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as Seller, Countrywide Home
Loans Servicing LP, as Master Servicer, the undersigned, as Trustee, BNY
Western Trust Company, as Co-Trustee] 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) it has received:
(1) 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;
(2) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2003-4, CWABS, Inc., by The Bank of New York, a New York
banking corporation, as trustee under the Pooling and Servicing Agreement
dated as of July 1, 2003, without recourse", or, in the case of each Mortgage
Loan with respect to property located in the State of California that is not a
MERS Mortgage Loan, a duly executed assignment of the Mortgage in blank (each
such assignment, when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which such assignment relates).
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-3-1
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the 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 Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:
-------------------------------
Name:
Title:
G-3-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Seller]
Re: CWABS Asset-Backed Certificates, Series 2003-4
----------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of July 1, 2003 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, the undersigned, as
Trustee, BNY Western Trust Company, as Co-Trustee, the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller, or, if the original Mortgage Note has been lost or destroyed and
not replaced, an original lost note affidavit from the Seller, stating that
the original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, [and in the case of each
Mortgage Loan that is a MERS Mortgage Loan, the original Mortgage, noting
thereon the presence of the MIN of the Mortgage Loan and language indicating
that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with
evidence of recording indicated thereon, or a copy of the Mortgage certified
by the public recording office in which such Mortgage has been recorded];
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2003-4, CWABS, Inc., by The Bank of New York, a New York
banking corporation, as trustee under the Pooling and Servicing Agreement
dated as of July 1, 2003, without recourse", or, in the case of each Mortgage
Loan with respect to property located in the State of California that is not a
MERS Mortgage Loan, a duly executed assignment of the Mortgage in blank (each
such assignment, when duly and validly completed, to be in recordable form and
sufficient to effect
H-1
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
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 Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:
-----------------------------
Name:
Title:
H-3
EXHIBIT I-1
TRANSFER AFFIDAVIT FOR THE CLASS A-R CERTIFICATES
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 July 1, 2003 (the "Agreement"), by and among CWABS, Inc., as depositor
(the "Depositor"), Countrywide Home Loans, Inc., as Seller, Countrywide Home
Loans Servicing LP, as Master Servicer, BNY Western Trust Company, as
Co-Trustee, and The Bank of New York, as Trustee. Capitalized terms used, but
not defined herein or in Exhibit 1 hereto, shall have the meanings ascribed to
such terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee.
2. The Transferee is not an employee benefit plan that is
subject to Title I of ERISA or to section 4975 of the Internal Revenue Code of
1986, nor is it acting on behalf of or with plan assets of any such plan. The
Transferee is, as of the date hereof, and will be, as of the date of the
Transfer, a Permitted Transferee. The Transferee will endeavor to remain a
Permitted Transferee for so long as it retains its Ownership Interest in the
Certificate. The Transferee is acquiring its Ownership Interest in the
Certificate for its own account.
3. The Transferee has been advised of, and understands that (i)
a tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a
tax will be imposed on a "pass-through entity" holding the Certificate if at
any time during the taxable year of the pass-through entity a Person that is
not a Permitted Transferee is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any period
with respect to which the record holder furnishes to the pass-through entity
an affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
I-1-1
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-1 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-1-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ____ day of ______, 20__.
[NAME OF TRANSFEREE]
By:
--------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
______________________
[Assistant] Secretary
Personally appeared before me the above-named _____________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the ____________ of the Transferee, and acknowledged that
he executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this ____ day of _______, 20__.
_____________________________________
NOTARY PUBLIC
My Commission expires the ___ day of
, 20__.
I-1-3
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 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
any REMIC formed hereunder 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, limited liability company,
partnership, joint venture, bank, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency
or political subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
I-I-4
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, 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-1 or Exhibit I-2, respectively.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Class A-R Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Class A-R Certificate and (C)
not to Transfer its Ownership Interest in a Class A-R Certificate, or to
cause the Transfer of an Ownership Interest in a Class A-R Certificate to
any other Person, if it has actual knowledge that such Person is not a
Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Class A-R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder
of a Class A-R Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored
to all rights as Holder thereof retroactive to the date of registration
of Transfer of such Class A-R Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Class A-R
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit and Transferor
Certificate. The Trustee shall be entitled but not obligated to recover
from any Holder of a Class A-R Certificate that was in fact not a
Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class A-R Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
(v) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax
I-1-5
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 any constituent REMIC of any REMIC formed 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.
I-1-6
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 2003-4
---------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class A-R Certificates, we
certify that we have no knowledge that 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 July 1, 2003, among CWABS, Inc., as Depositor, Countrywide Home
Loans, Inc., as Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, BNY Western Trust Company, as Co-Trustee, and The Bank of New York,
as 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 Xx., 0X
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2003-4, 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 July 1, 2003, among CWABS, Inc., as Depositor,
Countrywide Home Loans, Inc., as Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, BNY Western Trust Company, as Co-Trustee, and The Bank of
New York, as 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 Xx., 0X
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2003-4, 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 person with respect thereto, or
taken any other action which would result in a violation of
K-1
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 July 1, 2003, among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller, Countrywide Home Loans Servicing LP, as Master Servicer, BNY
Western Trust Company, as Co-Trustee, and The Bank of New York, as 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 Xx., 0X
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2003-4, 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 action, that would constitute a distribution of the
Certificates under the Securities Act or that
L-1
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 July 1, 2003, among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller, Countrywide Home Loans Servicing LP, as Master Servicer, BNY
Western Trust Company, as Co-Trustee, and The Bank of New York, as Trustee.
Very truly yours,
__________________________________
Name of Transferee
By: _______________________________
Authorized Officer
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:
As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive
officer of the Buyer.
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.
___ 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
L-3
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.
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.
For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer
used the cost of such securities to the Buyer and did not
include any of the securities referred to in the preceding
paragraph, except (i) where the Buyer reports its securities
holdings in its financial statements on the basis of their
market value, and (ii) no current information with respect to
the cost of those securities has been published. If clause (ii)
in the preceding sentence applies, the securities may be valued
at market. Further, in determining such aggregate amount, the
Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the
Buyer in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise
and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
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.
L-4
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.
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).
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).
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
L-6
agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
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.
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 or Adviser
By: ________________________________
Name:
Title:
IF AN ADVISER:
___________________________________
Print Name of Buyer
Date: _____________________________
L-7
EXHIBIT M
[Reserved]
M-1
EXHIBIT N
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full, Repurchased or Replaced]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 2003-4
__________________________________________ 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
[Reserved]
P-1
EXHIBIT Q
FORM OF CAP CONTRACT
[See appropriate document delivered at closing.]
Q-1
EXHIBIT R-1
[Reserved]
X-0
XXXXXXX X-0
[Reserved]
R-2
EXHIBIT S
FORM OF CAP CONTRACT ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT
[see document delivered at closing]
S-1
EXHIBIT T
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
ASSET-BACKED CERTIFICATES,
Series 2003-4
[Date]
Via Facsimile
The Bank of New York,
as Trustee
000 Xxxxxxx Xx., 0X
Xxx Xxxx, Xxx Xxxx 00000
Dear Sir or Madam:
Reference is made to the Pooling and Servicing Agreement, dated as of
July 1, 2003, (the "Pooling and Servicing Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, BNY Western Trust Company, as Co-Trustee,
and The Bank of New York, as Trustee. Capitalized terms used herein shall have
the meanings ascribed to such terms in the Pooling and Servicing Agreement.
__________________ hereby certifies that he/she is a Servicing
Officer, holding the office set forth beneath his/her name and hereby further
certifies as follows:
With respect to the Distribution Date in _________ 20[ ] and each
Mortgage Loan set forth in the attached schedule:
1. A Principal Prepayment in full or in part was received during the
related Prepayment Period;
2. Any Prepayment Charge due under the terms of the Mortgage Note
with respect to such Principal Prepayment was or was not, as indicated on the
attached schedule using "Yes" or "No", received from the Mortgagor and
deposited in the Certificate Account;
3. As to each Mortgage Loan set forth on the attached schedule for
which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:
(i) the Master Servicer's determination that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking
into account the value of such Prepayment Charge, or
T-1
(ii)(A) the enforceability thereof is limited (1) by bankruptcy,
insolvency, moratorium, receivership, or other similar law relating to
creditors' rights generally or (2) due to acceleration in connection with
a foreclosure or other involuntary payment, or (B) the enforceability is
otherwise limited or prohibited by applicable law; and
4. We certify that all amounts due in connection with the waiver of a
Prepayment Charge inconsistent with clause 3 above which are required to be
deposited by the Servicer pursuant to Section 3.20 of the Pooling and
Servicing Agreement, have been or will be so deposited.
COUNTRYWIDE HOME LOANS
SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: ________________________________
Name:
Title:
T-2
SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
DURING THE RELATED PREPAYMENT PERIOD
------------------------------------------------------------------------------
Loan Number Clause 2: Yes/No Clause 3: (i) or (ii)
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T-3
SCHEDULE I
[Reserved]
S-I-1
