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 March 1, 2002
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ASSET-BACKED CERTIFICATES, SERIES 2002-1
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Table of Contents
Page
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ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms................................................3
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
Section 2.01 Conveyance of Mortgage Loans................................38
Section 2.02 Acceptance by Trustee of the Mortgage Loans.................44
Section 2.03 Representations, Warranties and Covenants of the Master
Servicer and the Seller.....................................49
Section 2.04 Representations and Warranties of the Depositor.............61
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases...............................62
Section 2.06 Authentication and Delivery of Certificates.................63
Section 2.07 Covenants of the Master Servicer............................63
Section 2.08 Seller Loss Coverage Obligation.............................64
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans...................65
Section 3.02 Subservicing; Enforcement of the Obligations of
Master Servicer.............................................66
Section 3.03 Rights of the Depositor, the Trustee in Respect of the
Master Servicer.............................................67
Section 3.04 Trustee to Act as Master Servicer...........................67
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account; Pre-Funding Account; Seller Shortfall
Interest Requirement........................................67
Section 3.06 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.............................................71
Section 3.07 Access to Certain Documentation and Information Regarding
the Mortgage Loans..........................................71
Section 3.08 Permitted Withdrawals from the Certificate Account,
Distribution Account and the Carryover Reserve Fund.........72
Section 3.09 [Reserved.].................................................74
Section 3.10 Maintenance of Hazard Insurance.............................74
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements...75
Section 3.12 Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds and Realized Losses;
Repurchase of Certain Mortgage Loans........................76
Section 3.13 Co-Trustee to Cooperate; Release of Mortgage Files..........79
Section 3.14 Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee.........................80
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Section 3.15 Servicing Compensation......................................81
Section 3.16 Access to Certain Documentation.............................81
Section 3.17 Annual Statement as to Compliance...........................81
Section 3.18 Annual Independent Public Accountants' Servicing Statement;
Financial Statements........................................82
Section 3.19 The Cap Contract............................................82
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances....................................................83
Section 4.02 Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls..............................83
Section 4.03 [Reserved]..................................................84
Section 4.04 Distributions...............................................84
Section 4.05 Monthly Statements to Certificateholders....................87
Section 4.06 [Reserved]..................................................90
Section 4.07 [Reserved]..................................................90
Section 4.08 Carryover Reserve Fund......................................90
Section 4.09 [Reserved]..................................................91
ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates............................................92
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates....................................92
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...........95
Section 5.04 Persons Deemed Owners.......................................96
Section 5.05 Access to List of Certificateholders' Names and Addresses...96
Section 5.06 Book-Entry Certificates.....................................96
Section 5.07 Notices to Depository.......................................97
Section 5.08 Definitive Certificates.....................................97
Section 5.09 Maintenance of Office or Agency.............................98
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01 Respective Liabilities of the Depositor, the Master
Servicer and the Seller.....................................99
Section 6.02 Merger or Consolidation of the Depositor, the Master
Servicer or the Seller......................................99
Section 6.03 Limitation on Liability of the Depositor, the Seller, the
Master Servicer and Others..................................99
Section 6.04 Limitation on Resignation of Master Servicer...............100
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.............100
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ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of Default..........................................101
Section 7.02 Trustee to Act; Appointment of Successor...................102
Section 7.03 Notification to Certificateholders.........................104
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of Trustee..........................................105
Section 8.02 Certain Matters Affecting the Trustee......................106
Section 8.03 Trustee Not Liable for Mortgage Loans......................107
Section 8.04 Trustee May Own Certificates...............................107
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.........107
Section 8.06 Eligibility Requirements for Trustee.......................108
Section 8.07 Resignation and Removal of Trustee.........................108
Section 8.08 Successor Trustee..........................................109
Section 8.09 Merger or Consolidation of Trustee.........................109
Section 8.10 Appointment of Co-Trustee or Separate Trustee..............110
Section 8.11 Tax Matters................................................111
Section 8.12 Co-Trustee.................................................113
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans.............................................117
Section 9.02 Final Distribution on the Certificates.....................117
Section 9.03 Additional Termination Requirements........................119
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment..................................................120
Section 10.02 Recordation of Agreement; Counterparts.....................121
Section 10.03 Governing Law..............................................121
Section 10.04 Intention of Parties.......................................122
Section 10.05 Notices....................................................122
Section 10.06 Severability of Provisions.................................123
Section 10.07 Assignment.................................................123
Section 10.08 Limitation on Rights of Certificateholders.................123
Section 10.09 Inspection and Audit Rights................................124
Section 10.10 Certificates Nonassessable and Fully Paid..................125
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EXHIBITS
EXHIBIT A Forms of Certificates
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class A-IO 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 B-1 Certificate
EXHIBIT A-6 Form of Class B-2 Certificate
EXHIBIT B [Reserved]
EXHIBIT C [Reserved]
EXHIBIT D Form of Class A-R Certificate
EXHIBIT E Form of Tax Matters Person Certificate
EXHIBIT F Mortgage Loan Schedules
EXHIBIT F-1 List of Mortgage Loans
EXHIBIT F-2 Initial Mortgage Loans for which All or a
Portion of a Related Mortgage File is not
Delivered to the Co-Trustee on or prior
to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Form of Delay Delivery Certification
EXHIBIT G-4 Form of Initial Certification of Trustee
(Subsequent Mortgage Loans)
EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I Transfer Affidavit
EXHIBIT J Form of Transferor Certificate for Class A-R
Certificates
EXHIBIT K [Reserved]
EXHIBIT L [Reserved]
EXHIBIT M Request for Release (for Co-Trustee)
EXHIBIT N Request for Release (for Mortgage Loans Paid in
Full, Repurchased or Replaced)
EXHIBIT O Copy of Depositary Agreement
EXHIBIT P Form of Mortgage Note and Mortgage
EXHIBIT Q Form of Subsequent Transfer Agreement
EXHIBIT R Form of Cap Contract
EXHIBIT S Form of Cap Contract Assignment Agreement
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POOLING AND SERVICING AGREEMENT, dated as of March 1, 2002, by
and among CWABS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller (the "Seller"),
COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership, as master
servicer (the "Master Servicer"), THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee"), and BNY WESTERN TRUST COMPANY, a
California banking corporation, as co-trustee (the "Co-Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. As provided herein, the Trustee will
elect that the Trust Fund (except for the Cap Contract, the Carryover Reserve
Fund and the Pre-Funding Account) be treated for federal income tax purposes as
comprising two real estate mortgage investment conduits (each a "REMIC" or, in
the alternative, the "Lower Tier REMIC" and the "Upper Tier REMIC,"
respectively). The Lower Tier REMIC will hold as assets all property of the
Trust Fund (other than the Cap Contract, the Carryover Reserve Fund and the
Pre-Funding Account) and will be evidenced by (i) the Lower Tier REMIC Regular
Interests, which will be uncertificated and will represent the "REMIC regular
interests" in the Lower Tier REMIC, and (ii) the Class LT-A-R Interest, which
will represent the "REMIC residual interest" in the Lower Tier REMIC. The Upper
Tier REMIC will hold as assets the Lower Tier REMIC Regular Interests and will
be evidenced by the Certificates, each of which (other than the Class A-R
Certificate) will represent ownership of one or more "REMIC regular interests"
in the Upper Tier REMIC. The Class A-R Certificate will represent ownership of
the sole class of "REMIC residual interest" in each of the Lower Tier REMIC and
the Upper Tier REMIC. The latest possible maturity date of all REMIC regular
interests created herein shall be the Latest Possible Maturity Date.
The following table specifies the class designation, interest rate, and
principal amount for each class of Lower Tier REMIC Interest:
(Continued on next page)
Lower Tier REMIC Interests
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------------------------- ---------------------- ----------------------- --------------------------------------------
Lower Tier REMIC Class Initial Class
Designation Principal Balance Class Interest Rate Corresponding Class of Certificates
----------- ----------------- ------------------- -------------
------------------------- ---------------------- ----------------------- --------------------------------------------
LT-A $427,800,000 (1) Class A
(2) Class A-IO
------------------------- ---------------------- ----------------------- --------------------------------------------
LT-$100 (2) $100 (1) Class A-R
Class A-IO
------------------------- ---------------------- ----------------------- --------------------------------------------
LT-A-R (2) (3) (1) Class A-R
Class A-IO
------------------------- ---------------------- ----------------------- --------------------------------------------
LT-M-1(2) $8,510,000 (1) Class M-1
Class A-IO
------------------------- ---------------------- ----------------------- --------------------------------------------
LT-M-2(2) $8,050,000 (1) Class M-2
A-IO
------------------------- ---------------------- ----------------------- --------------------------------------------
LT-B-1(2) $6,900,000 (1) Class B-1
Class A-IO
------------------------- ---------------------- ----------------------- --------------------------------------------
LT-B-2(2) $8,740,000 (1) Class B-2
Class A-IO
------------------------- ---------------------- ----------------------- --------------------------------------------
(1) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for these Lower Tier REMIC Interests is a per annum rate equal
to the Net Rate Cap.
(2) The Class A-IO Certificates are entitled to receive on each Distribution
Date a specified portion of the interest payable on each Lower Tier REMIC
Interest (other than the LT-A-R Interest). Specifically, for each Accrual
Period, the Class A-IO Certificates are entitled to interest accruals on each
Lower Tier REMIC Interest in excess of the interest paid on such Lower Tier
REMIC Interest's corresponding, non-IO Certificate.
(3) The LT-A-R Interest will be the sole class of residual interest in the Lower
Tier REMIC. It does not have an interest rate or a principal balance.
On each Distribution Date, the Trustee shall allocate the losses on,
and distribute the interest and principal on the Mortgage Loans to the Lower
Tier REMIC Interests in the same manner that such items are allocated to or
distributed among the Corresponding Classes of Certificates.
The following table sets forth characteristics of the
Certificates in the Upper Tier REMIC, each of which Certificates, except for the
Class A-R Certificates, is hereby designated as a "regular interest" in the
Upper Tier REMIC.
Original Certificate
Class Principal Balance(1) Pass-Through Rate
------------------------------------------- ----------------------------------------- --------------------
A $ 427,800,000 (2)
A-IO $ 460,000,000(3) (2)
A-R $ 100 (2)
M-1 $ 8,510,000 (2)
M-2 $ 8,050,000 (2)
B-1 $ 6,900,000 (2)
B-2 $ 8,740,000 (2)
(1) This amount is subject to a permitted variance in the aggregate of plus
or minus 10%.
(2) The Certificates will accrue interest at the related Pass-Through Rates
identified in this Agreement.
(3) This is a notional amount. No principal will be paid on the Class A-IO
Certificates.
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer, the Seller, the Trustee and the
Co-Trustee agree as follows:
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ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms.
In addition to those defined terms defined in Section 1.02, whenever
used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
Accrual Period: With respect to the Class A-IO Certificates and any
Distribution Date, the calendar month immediately preceding such Distribution
Date. With respect to the Offered Certificates (except for the Class A-IO
Certificates) and any Distribution Date, the period commencing on the
immediately preceding Distribution Date (or, in the case of the first
Distribution Date, the Closing Date) and ending on the day immediately preceding
such Distribution Date. All calculations of interest on the Class A-IO
Certificates will be made on the basis of a 360-day year consisting of twelve
30-day months, and all calculations of interest on the Offered Certificates
(except for the Class A-IO 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.
Adjustable Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable for the
life of the related Mortgage, including any Mortgage Loans delivered in
replacement thereof.
Adjusted Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the Maximum Mortgage Rate less the Expense Fee Rate. With respect
to each Fixed Rate Mortgage Loan, the Adjusted Net Mortgage Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
less the Expense Fee Rate.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
Advance: The aggregate of the advances required to be made by the
Master Servicer with respect to any Distribution Date pursuant to Section 4.01,
the amount of any such advances being equal to the aggregate of payments of
principal and interest (net of the Servicing Fees) on the Mortgage Loans that
were due on the related Due Date and not received as of the close of business on
the related Determination Date; provided, however, with respect to each REO
Property that has not been liquidated, that the net monthly rental income (if
any) from such REO Property deposited in the Certificate Account for such
Distribution Date pursuant to Section 3.12 may be used to offset such advance
for the related REO Property.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
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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 on
or after the date on which the Seller Loss Coverage Amount has been reduced to
zero, the sum of the Realized Losses with respect to the Mortgage Loans which
are to be applied in reduction of the Certificate Principal Balance of the
Subordinate Certificates pursuant to this Agreement, which shall equal the
amount, if any, by which, Certificate Principal Balance of all Certificates
(after all distributions of principal on such Distribution Date) exceeds the
Stated Principal Balance of the Mortgage Loans for such Distribution Date.
Appraised Value: The appraised value of the Mortgaged Property based
upon the appraisal made for the Seller by a fee appraiser at the time of the
origination of the related Mortgage Loan, or the sales price of the Mortgaged
Property at the time of such origination, whichever is less, or with respect to
any Mortgage Loan originated in connection with a refinancing, the appraised
value of the Mortgaged Property based upon the appraisal made at the time of
such refinancing.
Bankruptcy Code: Title 11 of the United States Code.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Regular Certificates constitutes a Class of Book-Entry
Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the City of New York, New York or the city
in which the Corporate Trust Office of the Trustee is located are authorized or
obligated by law or executive order to be closed.
Cap Contract: Collectively, the transaction evidenced by the
Confirmation And Agreement (as assigned to the Trustee pursuant to the Cap
Contract Assignment Agreement), a form of which is attached hereto as Exhibit R.
Cap Contract Assignment Agreement: The Assignment Agreement 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.
Cap Contract Counterparty: Bear Xxxxxxx Financial Products Inc.
Cap Contract Notional Balance: For each Distribution Date identified
below, the corresponding amount identified below:
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Month of Payment Cap Contract Notional Month of Payment Cap Contract Notional
Date Balances($) Date Balances($)
------------------------ ----------------------------- ------------------------- -------------------------
April 2002............. 230,000,000.00 March 2007............. 29,942,508.90
May 2002............... 228,754,463.96 April 2007............. 29,411,602.58
June 2002.............. 227,150,298.87 May 2007............... 28,889,758.67
July 2002.............. 225,188,083.16 June 2007.............. 28,376,825.29
August 2002............ 222,870,030.37 July 2007.............. 27,872,653.08
September 2002......... 220,200,022.81 August 2007............ 27,377,095.17
October 2002........... 217,183,634.22 September 2007......... 26,890,007.11
November 2002.......... 213,831,178.90 October 2007........... 26,411,246.84
December 2002.......... 210,175,065.52 November 2007.......... 25,940,674.71
January 2003........... 206,547,866.94 December 2007.......... 25,478,153.33
February 2003.......... 202,981,782.03 January 2008........... 25,023,547.63
March 2003............. 199,475,793.49 February 2008.......... 24,576,724.76
April 2003............. 196,028,900.85 March 2008............. 24,137,554.09
May 2003............... 192,640,120.18 April 2008............. 23,705,907.17
June 2003.............. 189,308,483.85 May 2008............... 23,281,657.66
July 2003.............. 186,033,040.19 June 2008.............. 22,864,681.33
August 2003............ 182,812,853.32 July 2008.............. 22,454,856.02
September 2003......... 179,647,002.81 August 2008............ 22,052,061.60
October 2003........... 176,534,583.48 September 2008......... 21,656,179.92
November 2003.......... 173,474,705.11 October 2008........... 21,267,094.82
December 2003.......... 170,466,492.22 November 2008.......... 20,884,692.06
January 2004........... 167,509,083.82 December 2008.......... 20,508,859.28
February 2004.......... 164,601,633.16 January 2009........... 20,139,486.02
March 2004............. 121,307,480.63 February 2009.......... 19,776,463.64
April 2004............. 119,199,965.94 March 2009............. 19,419,685.31
May 2004............... 117,128,076.74 April 2009............. 19,069,045.97
June 2004.............. 115,091,219.00 May 2009............... 18,724,442.32
July 2004.............. 113,088,808.49 June 2009.............. 18,385,772.77
August 2004............ 111,120,270.68 July 2009.............. 18,052,937.43
September 2004......... 109,185,040.55 August 2009............ 17,725,838.05
October 2004........... 107,282,562.40 September 2009......... 17,404,378.05
November 2004.......... 105,412,289.78 October 2009........... 17,088,462.42
December 2004.......... 103,573,685.27 November 2009.......... 16,777,997.75
January 2005........... 101,766,220.34 December 2009.......... 16,472,892.19
February 2005.......... 99,989,375.21 January 2010........... 16,173,055.42
March 2005............. 65,495,092.50 February 2010.......... 15,878,398.60
April 2005............. 64,350,338.83 March 2010............. 15,588,834.40
May 2005............... 63,224,992.90 April 2010............. 15,304,276.93
June 2005.............. 62,118,730.58 May 2010............... 15,024,641.72
July 2005.............. 61,031,233.13 June 2010.............. 14,749,845.74
August 2005............ 59,962,187.08 July 2010.............. 14,479,807.30
September 2005......... 58,911,284.18 August 2010............ 14,214,446.10
October 2005........... 57,878,221.24 September 2010......... 13,953,683.17
November 2005.......... 56,862,700.15 October 2010........... 13,697,440.86
December 2005.......... 55,864,427.69 November 2010.......... 13,445,642.82
January 2006........... 54,883,115.54 December 2010.......... 13,198,213.95
February 2006.......... 53,918,480.14 January 2011........... 12,955,080.42
March 2006............. 37,079,169.84 February 2011.......... 12,716,169.63
April 2006............. 36,426,690.15 March 2011............. 12,481,410.19
May 2006............... 35,785,308.24 April 2011............. 12,250,731.89
June 2006.............. 35,154,838.46 May 2011............... 12,024,065.71
July 2006.............. 34,535,098.25 June 2011.............. 11,801,343.76
August 2006............ 33,925,908.06 July 2011.............. 11,582,499.31
September 2006......... 33,327,091.33 August 2011............ 11,367,466.71
October 2006........... 32,738,474.42 September 2011......... 11,156,181.44
November 2006.......... 32,159,886.57 October 2011........... 10,948,580.02
December 2006.......... 31,591,159.87 November 2011.......... 10,744,600.06
January 2007........... 31,032,129.17 December 2011.......... 10,544,180.20
February 2007.......... 30,482,632.08
Cap Contract Termination Date: The Distribution Date in December 2011.
-----------------------------
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Carryover Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.08 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2002-1". 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-6, Exhibit D and Exhibit E.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of the Certificateholders and designated "Countrywide Home
Loans, Inc. in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2002-1". 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 any
Class A-IO Certificates) and as of any Distribution Date, the Initial
Certificate Principal Balance of such Certificate less the sum of (i) all
amounts distributed with respect to such Certificate in reduction of the
Certificate Principal Balance thereof on previous Distribution Dates pursuant to
Section 4.04, and (ii) with respect to any Subordinate Certificates, any Applied
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates pursuant to Section 4.04. References herein to the Certificate Principal
Balance of a Class of Certificates shall mean the Certificate Principal Balances
of all Certificates in such Class. The Class A-IO Certificates shall have no
Certificate Principal Balance, and any reference to the Certificate Principal
Balance of the Certificates shall not include the Class A-IO Notional Amount.
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Class of Regular Certificates, except that
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or any affiliate of the
Depositor shall be deemed not to be Outstanding and the Voting Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Voting Interests necessary to effect such consent has been
obtained; provided that if any such Person (including the Depositor) owns 100%
of the Voting Interests evidenced by a Class of Certificates, such Certificates
shall be deemed to be Outstanding for purposes of any provision hereof (other
than the second sentence of Section 10.01 hereof) that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of
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the Depositor in determining which Certificates are registered in the name of
an affiliate of the Depositor.
Class: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.
Class A Certificate: Any Certificate designated as a "Class A
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class A Certificate Principal Balance: As of any date of determination,
the Certificate Principal Balance of the Class A Certificates.
Class A Current Interest: For any Distribution Date, the interest
accrued on the Class A Certificate Principal Balance during the related Accrual
Period at the Class A Pass-Through Rate plus any amount previously distributed
with respect to interest for such Class that is recovered as a voidable
preference by a trustee in bankruptcy.
Class A Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class A Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class A Certificates with
respect to interest on such prior Distribution Dates.
Class A Interest Carryover Amount: For any Distribution Date on which
the Pass-Through Rate for the Class A Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class A
Certificates would otherwise be entitled to receive on such Distribution Date
had such rate been calculated as the sum of One-Month LIBOR and the applicable
Class A Margin for such Distribution Date, up to the Maximum Rate, over (ii) the
amount of interest payable on the Class A Certificates at the Net Rate Cap for
such Distribution Date and (B) the Class A Interest Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class A Pass-Through Rate (without giving
effect to the Net Rate Cap up to the Maximum Rate).
Class A Margin: For any Distribution Date on or prior to the Optional
Termination Date, 0.280% per annum and, for any Distribution Date after the
Optional Termination Date, 0.560% per annum.
Class A Pass-Through Rate: For the first Distribution Date, 2.18% per
annum. For any Distribution Date thereafter, the lesser of (i) One-Month LIBOR
plus the Class A Margin, and (ii) the Net Rate Cap for such Distribution Date.
Class A Principal Distribution Amount: With respect to any Distribution
Date, the excess of (A) the Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date over (B) 86.00% of the
Stated Principal Balances of the Mortgage Loans for such Distribution Date.
Class A-IO Certificates: Any Certificate designated as a "Class A-IO
Certificate" on the face thereof, in the form of Exhibit A-2 hereto.
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Class A-IO Current Interest: For any Distribution Date, the interest
accrued on the Class A-IO Notional Amount during the related Accrual Period at
the Class A-IO Pass-Through Rate plus any amount previously distributed with
respect to interest for such Class that is recovered as a voidable preference by
a trustee in bankruptcy.
Class A-IO Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class A-IO Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class A-IO
Certificates with respect to interest on such prior Distribution Dates.
Class A-IO Notional Amount: An amount equal to the Stated Principal
Balance of the Mortgage Loans, plus the Pre-Funded Amount, less any Subsequent
Transfer Date Aggregate Transfer Amounts.
Class A-IO Pass-Through Rate: With respect to any Distribution Date,
the excess of (i) the weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans (weighted on the basis of the Stated Principal Balances thereof)
over (ii) the weighted average Pass-Through Rate of the Class A, Class M-1,
Class M-2,Class B-1 and Class B-2 Certificates (weighted on the basis of the
respective Certificate Principal Balances thereof and adjusted in each case to
an effective rate reflecting the calculation of interest on the basis of a
360-day year that consists of twelve 30-day months). Solely for federal income
tax purposes, the Class A-IO Pass Through Rate will be calculated by
substituting for clause (ii) in the preceding sentence, the weighted average of
the pass through rates of REMIC 1 XX-X, XX-X-0, XX-X-0, XX-X-0 and LT-B-2 with
the pass through rate in respect of each such Interest subject to a cap equal to
the Pass Through Rate in respect of its Corresponding Upper Tier REMIC Class, as
provided in the Preliminary Statement herein.
Class A-R Certificate: Any one of the Class A-R Certificates executed
and authenticated by the Trustee in substantially the form set forth in Exhibits
D and E hereto.
Class A-R Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class A-R Certificates.
Class A-R Current Interest: For any Distribution Date, the interest
accrued on the Class A-R Certificate Principal Balance during the related
Accrual Period at the Class A-R Pass-Through Rate plus any amount previously
distributed with respect to interest for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.
Class A-R Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class A-R Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class A-R Certificates
with respect to interest on such prior Distribution Dates.
Class A-R Interest Carryover Amount: For any Distribution Date on which
the Pass-Through Rate for the Class A-R Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class A-R
Certificates would otherwise be entitled to
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receive on such Distribution Date had such rate been calculated as the
sum of One-Month LIBOR and the applicable Class A-R Margin for such Distribution
Date, up to the Maximum Rate, over (ii) the amount of interest payable on the
Class A-R Certificates at the Net Rate Cap for such Distribution Date and (B)
the Class A-R Interest Carryover Amount for all previous Distribution Dates not
previously paid pursuant to Section 4.04, together with interest thereon at the
Class A-R Pass-Through Rate (without giving effect to the Net Rate Cap up to the
Maximum Rate).
Class A-R Margin: For any Distribution Date, 0.280% per annum.
Class A-R Pass-Through Rate: For the first Distribution Date, 2.18% per
annum. For any Distribution Date thereafter, the lesser of (i) One-Month LIBOR
plus the Class A-R Margin, and (ii) the Net Rate Cap for such Distribution Date.
Class A-R Principal Distribution Amount: With respect to any
Distribution Date, the excess of (A) the Certificate Principal Balance of the
Class A-R Certificates immediately prior to such Distribution Date over (B)
$100.
Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.
Class B-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class B-1 Certificates.
Class B-1 Current Interest: For any Distribution Date, the interest
accrued on the Class B-1 Certificate Principal Balance during the related
Accrual Period at the Class B-1 Pass-Through Rate plus any amount previously
distributed with respect to interest for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.
Class B-1 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class B-1 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class B-1 Certificates
with respect to interest on such prior Distribution Dates.
Class B-1 Interest Carryover Amount: For any Distribution Date on which
the Pass-Through Rate for the Class B-1 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class B-1
Certificates would otherwise be entitled to receive on such Distribution Date
had such rate been calculated as the sum of One-Month LIBOR and the applicable
Class B-1 Margin for such Distribution Date, up to the Maximum Rate, over (ii)
the amount of interest payable on the Class B-1 Certificates at the Net Rate Cap
for such Distribution Date and (B) the Class B-1 Interest Carryover Amount for
all previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class B-1 Pass-Through Rate (without
giving effect to the Net Rate Cap up to the Maximum Rate).
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Class B-1 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 1.650% per annum and, for any Distribution Date after the
Optional Termination Date, 2.475% per annum.
Class B-1 Pass-Through Rate: For the first Distribution Date, 3.35% per
annum. For any Distribution Date thereafter, the lesser of (i) One-Month LIBOR
plus the Class B-1 Margin, and (ii) the Net Rate Cap for such Distribution Date.
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class A Certificate
Principal Balance (after taking into account distribution of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), and
(D) the Class B-1 Certificate Principal Balance immediately prior to such
Distribution Date over (ii) 96.20% of the aggregate Stated Principal Balances
for such Distribution Date of the Mortgage Loans.
Class B-2 Certificate: Any Certificate designated as a "Class B-2
Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.
Class B-2 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class B-2 Certificates.
Class B-2 Current Interest: For any Distribution Date, the interest
accrued on the Class B-2 Certificate Principal Balance during the related
Accrual Period at the Class B-2 Pass-Through Rate plus any amount previously
distributed with respect to interest for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.
Class B-2 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class B-2 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class B-2 Certificates
with respect to interest on such prior Distribution Dates.
Class B-2 Interest Carryover Amount: For any Distribution Date on which
the Pass-Through Rate for the Class B-2 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class B-2
Certificates would otherwise be entitled to receive on such Distribution Date
had such rate been calculated as the sum of One-Month LIBOR and the applicable
Class B-2 Margin for such Distribution Date, up to the Maximum Rate, over (ii)
the amount of interest payable on the Class B-2 Certificates at the Net Rate Cap
for such Distribution Date and (B) the Class B-2 Interest Carryover Amount for
all previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class B-2 Pass-Through Rate (without
giving effect to the Net Rate Cap up to the Maximum Rate).
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Class B-2 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 2.100% per annum and, for any Distribution Date after the
Optional Termination Date, 3.150% per annum.
Class B-2 Pass-Through Rate: For the first Distribution Date, 4.00% per
annum. For any Distribution Date thereafter, the lesser of (i) One-Month LIBOR
plus the Class B-2 Margin, and (ii) the Net Rate Cap for such Distribution Date.
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class A Certificate
Principal Balance (after taking into account distribution of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), (D)
the Class B-1 Certificate Principal Balance (after taking into account
distribution of the Class B-1 Principal Distribution Amount on such Distribution
Date) and (E) the Class B-2 Certificate Principal Balance immediately prior to
such Distribution Date over (ii) the Stated Principal Balances for such
Distribution Date of the Mortgage Loans, provided, however, that after the Class
A Certificate Principal Balance, the Class M-1 Certificate Principal Balance,
the Class M-2 Certificate Principal Balance and the Class B-1 Certificate
Principal Balance have been reduced to zero, the Class B-2 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
Class M-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-1 Certificates.
Class M-1 Current Interest: For any Distribution Date, the interest
accrued on the Class M-1 Certificate Principal Balance during the related
Accrual Period at the Class M-1 Pass-Through Rate plus any amount previously
distributed with respect to interest for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.
Class M-1 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-1 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-1 Certificates
with respect to interest.
Class M-1 Interest Carryover Amount: For any Distribution Date on which
the Pass-Through Rate for the Class M-1 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class M-1
Certificates would otherwise be entitled to receive on such Distribution Date
had such rate been calculated as the sum of One-Month LIBOR and the applicable
Class M-1 Margin for such Distribution Date, up to the Maximum Rate, over (ii)
the amount of interest payable on the Class M-1 Certificates at the Net Rate Cap
for such Distribution Date and (B) the Class M-1 Interest Carryover Amount for
all previous
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Distribution Dates not previously paid pursuant to Section 4.04, together with
interest thereon at the Class M-1 Pass-Through Rate (without giving effect to
the Net Rate Cap up to the Maximum Rate).
Class M-1 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 0.680% per annum and, for any Distribution Date after the
Optional Termination Date, 1.020% per annum.
Class M-1 Pass-Through Rate: For the first Distribution Date, 2.58% per
annum. For any Distribution Date thereafter, the lesser of (i) One-Month LIBOR
plus the Class M-1 Margin, and (ii) the Net Rate Cap for such Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (A) the Class A Certificate
Principal Balance (after taking into account distribution of the Class A
Principal Distribution Amount on such Distribution Date) and (B) the Class M-1
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) 89.70% of the Stated Principal Balances for such Distribution Date of the
Mortgage Loans.
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 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class M-2 Certificates.
Class M-2 Current Interest: For any Distribution Date, the interest
accrued on the Class M-2 Certificate Principal Balance during the related
Accrual Period at the Class M-2 Pass-Through Rate plus any amount previously
distributed with respect to interest for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.
Class M-2 Interest Carry Forward Amount: For any Distribution Date, the
excess of (a) the Class M-2 Current Interest with respect to prior Distribution
Dates over (b) the amount actually distributed to the Class M-2 Certificates
with respect to interest on such prior Distribution Dates.
Class M-2 Interest Carryover Amount: For any Distribution Date on which
the Pass-Through Rate for the Class M-2 Certificates is based upon the Net Rate
Cap, the sum of (A) the excess of (i) the amount of interest the Class M-2
Certificates would otherwise be entitled to receive on such Distribution Date
had such rate been calculated as the sum of One-Month LIBOR and the applicable
Class M-2 Margin for such Distribution Date, up to the Maximum Rate, over (ii)
the amount of interest payable on the Class M-2 Certificates at the Net Rate Cap
for such Distribution Date and (B) the Class M-2 Interest Carryover Amount for
all previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Class M-2 Pass-Through Rate (without
giving effect to the Net Rate Cap up to the Maximum Rate).
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Class M-2 Margin: For any Distribution Date on or prior to the Optional
Termination Date, 1.100% per annum and, for any Distribution Date after the
Optional Termination Date, 1.650% per annum.
Class M-2 Pass-Through Rate: For the first Distribution Date, 3.00% per
annum. For any Distribution Date thereafter, the lesser of (i) One-Month LIBOR
plus the Class M-2 Margin, and (ii) the Net Rate Cap for such Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Class A Certificate
Principal Balance (after taking into account distribution of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date) and (C) the
Class M-2 Certificate Principal Balance immediately prior to such Distribution
Date over (ii) 93.20% of the aggregate Stated Principal Balances for such
Distribution Date of the Mortgage Loans.
Closing Date: March 27, 2002.
Co-Trustee: BNY Western Trust Company, a California banking
corporation, not in its individual capacity, but solely in its capacity as
co-trustee for the benefit of the Certificateholders under this Agreement, and
any successor thereto, and any corporation or national banking association
resulting from or surviving any consolidation or merger to which it or its
successors may be a party.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Combined Loan-to-Value Ratio: The fraction, expressed as a percentage,
the numerator of which is the sum of (x) the original principal balance of the
related Mortgage Loan and (y) the outstanding principal balance at the date of
origination of the Mortgage Loan of any senior mortgage loan, and the
denominator of which is the Appraised Value of the related Mortgaged Property.
Compensating Interest: With respect to any Mortgage Loan, an amount
equal to one-half of the Servicing Fee, to be applied to the interest portion of
a Prepayment Interest Shortfall on such Mortgage Loan pursuant to Section 4.02
hereof.
Confirmation And Agreement: The Confirmation and Agreement dated March
18, 2002 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 0 Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (Attention: Corporate Trust MBS Administration), telephone: (212)
000-0000, facsimile: (000) 000-0000.
Covered Mortgage Loan: A mortgage loan listed on the Mortgage Loan
Schedule as being covered by the Mortgage Insurance Policy.
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Credit Comeback Excess Amount: With respect to a Credit Comeback Loan
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 a 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.
Current Interest: With respect to (i) the Class A Certificates, the
Class A Current Interest, (ii) the Class A-IO Certificates, the Class A-IO
Current Interest, (iii) the Class A-R Certificates, the Class A-R Current
Interest, (iv) the Class M-1 Certificates, the Class M-1 Current Interest, (v)
the Class M-2 Certificates, the Class M-2 Current Interest (vi) the Class B-1
Certificates, the Class B-1 Current Interest and (vii) the Class B-2
Certificates, the Class B-2 Current Interest.
Cut-off Date: In the case of any Initial Mortgage Loan, the later of
(x) March 1, 2002 and (y) the date of origination of such Mortgage Loan (the
"Initial Cut-off Date"), and in the case of any Subsequent Mortgage Loan, the
later of (x) the first day of the month of the related Subsequent Transfer Date
and (y) the date of origination of such Subsequent Mortgage Loan (the related
"Subsequent Cut-off Date"). When used with respect to any Mortgage Loans "the
Cut-off Date" shall mean the related Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all payments of principal due on or prior to the Cut-off Date,
whether or not received, and all Principal Prepayments received on or prior to
the Cut-off Date, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.
Definitive Certificates: As defined in Section 5.06.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal,
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which valuation or reduction results from an order of such court that
is final and non-appealable in a proceeding under the Bankruptcy Code.
Delay Delivery Mortgage Loans: (i) The Initial 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, and (ii) all Subsequent Mortgage
Loans. The Depositor shall deliver (or cause delivery of) the Mortgage Files to
the Co-Trustee: (A) with respect to at least 50% of the Initial Mortgage Loans,
not later than the Closing Date, (B) with respect to at least an additional 40%
of the Initial Mortgage Loans, not later than 20 days after the Closing Date,
and not later than 20 days after the relevant Subsequent Transfer Date with
respect to at least 90% of the Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date, and (C) with respect to the remaining 10% of the
Mortgage Loans, not later than thirty days after the Closing Date, and not later
than thirty days after the relevant Subsequent Transfer Date with respect to the
remaining 10% of the Subsequent Mortgage Loans conveyed on the related
Subsequent Transfer 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 Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of business
on the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or the
"Initial Notional Amount of this Certificate" or, if neither of the foregoing,
the Percentage Interest appearing on the face thereof.
Depositor: CWABS, Inc., a Delaware corporation, or its successor in
interest.
Depository: The initial Depository shall be The Depository Trust
Company ("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
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Xxxxxxxxxx Xxxxxxxxx: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
O.
Depository Participant: A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the 15th day
of the month of such Distribution Date or, if such 15th day is not a Business
Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and designated "The Bank of New York,
in trust for registered holders of CWABS, Inc., Asset-Backed Certificates,
Series 2002-1". Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, 1:00
p.m. Pacific time on the Business Day immediately preceding such Distribution
Date.
Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such 25th day is not a Business Day,
the next succeeding Business Day, commencing in April 2002.
Due Date: With respect to any Mortgage Loan and Due Period, the due
date for scheduled payments of interest and/or principal on that Mortgage Loan
occurring in such Due Period as provided in the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs and ending on the Due Date 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
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account or accounts maintained with the corporate trust department
of a federal or state chartered depository institution or trust company having
capital and surplus of not less than $50,000,000, acting in its fiduciary
capacity or (iv) any other account acceptable to the Rating Agencies. Eligible
Accounts may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.
Eligible Repurchase Month: As defined in Section 3.12(c) hereof.
Enhancement Payment: With respect to any Distribution Date on or prior
to the Distribution Date on which the Seller Loss Coverage Amount is reduced to
zero, the amount of Realized Losses with respect to Mortgage Loans, provided,
however, that with respect to the Distribution Date on which the amount of
Realized Losses are greater than the Seller Loss Coverage Amount, the
Enhancement Payment for such Distribution Date shall be the Seller Loss Coverage
Amount.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the applicable requirements of the
Underwriter's Exemption.
ERISA-Restricted Certificates: The Class A-R Certificates, and, until
they have been the subject of an ERISA-Qualifying Underwriting, the Class A-IO
Certificates; and any class of Certificates that does not satisfy the applicable
rating requirement under the Underwriter's Exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess 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.
Excluded Carryover Amount: The sum of (i) for (x) any Distribution Date
prior to the Cap Contract Termination Date on which the amounts received on the
Cap Contract for such Distribution Date are insufficient to cover the Net Rate
Carryover for such Distribution Date and on which the Cap Contract Notional
Balance is less than the aggregate Stated Principal Balances of Fixed Rate
Mortgage Loans, the amount of the Net Rate Carryover (if any) for such
Distribution Date that would have been covered by the Cap Contract had such Cap
Contract Notional Balance been equal to such aggregate Stated Principal Balances
of Fixed Rate Mortgage Loans and (y) any other Distribution Date, zero, plus
(ii) the amount of any unpaid Excluded Carryover Amounts from prior Distribution
Dates.
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 Mortgage
Insurance Premium Rate.
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Xxxxxx Mae: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
Fixed Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life of
the related Mortgage and any Credit Comeback Loans, including in each case any
Mortgage Loans delivered in replacement thereof.
Foreclosure Restricted Mortgage Loan: As defined in Section 3.12(d)
hereof.
Foreclosure Restricted Property: As defined in Section 3.12(d) hereof.
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.
Funding Period: The period from and after the Closing Date to and
including May 31, 2002.
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 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 Initial Mortgage Loans due on
or after the Initial 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 Initial Mortgage Loans due on and after the
Initial Cut-off Date and received by the Master Servicer before the Closing
Date.
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Initial Certificate Principal Balance: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date.
Initial Cut-off Date: As defined in the definition of Cut-off Date.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trustee on the
Closing Date pursuant to this Agreement as identified on the Mortgage Loan
Schedule delivered to the Trustee on the Closing Date.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate in
effect prior to the Initial Adjustment Date.
Initial Seller Loss Coverage Amount: 1.90% of the initial aggregate
Certificate Principal Balance of the Certificates.
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
Policies.
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 (i) the Class A-1
Certificates, the Class A-1 Interest Carry Forward Amount, (ii) the Class A-R
Certificates, the Class A-R Interest Carry Forward Amount, (iii) the Class A-IO
Certificates, the Class A-IO Interest Carry Forward Amount, (iv) the Class M-1
Certificates, the Class M-1 Interest Carry Forward Amount, (v) the Class M-2
Certificates, the Class M-2 Interest Carry Forward Amount, (vi) the Class B-1
Certificates, the Class B-1 Interest Carry Forward Amount and (vii) the Class
B-2 Certificates, the Class B-2 Interest Carry Forward Amount.
Interest Determination Date: With respect to the Certificates (other
than the Class A-IO Certificates) for the first Accrual Period, March 25, 2002.
With respect to the Certificates (other than the Class A-IO Certificates) for
any Accrual Period thereafter, the second LIBOR Business Day preceding the
commencement of such Accrual Period.
Interest Funds: The Interest Remittance Amount plus any amounts
received under the Cap Contract, less the aggregate Mortgage Insurance Premium
and Trustee Fee for the Mortgage Loans.
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Interest Rate Cap Agreement: An interest rate cap contract referred to
in the last paragraph of Section 8.11 and all related provisions of this
Agreement.
Interest Remittance Amount: With respect to the Mortgage Loans and any
Master Servicer Advance Date, the sum, without duplication, of (i) all scheduled
interest collected during the related Due Period with respect to the Mortgage
Loans less the related Servicing Fee, (ii) all related Advances relating to
interest with respect to the Mortgage Loans, (iii) all Compensating Interest
with respect to the Mortgage Loans, (iv) Liquidation Proceeds with respect to
the Mortgage Loans collected during the related Due Period (to the extent such
Liquidation Proceeds relate to interest) and (v) for the Master Servicer Advance
Date in April, May or June 2002, the Seller Shortfall Interest Requirement for
the related Master Servicer Advance Date (if any), less all Nonrecoverable
Advances relating to interest reimbursed during the related Due Period.
Latest Possible Maturity Date: The Distribution Date in November 2032.
LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
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 Number and Borrower Identification Mortgage Loan Schedule: With
respect to any Subsequent Transfer Date, the Loan Number and Borrower
Identification Mortgage Loan Schedule delivered in connection with such
Subsequent Transfer Date pursuant to Section 2.01(f). Each Loan Number and
Borrower Identification Mortgage Loan Schedule shall contain the information
specified in the definition of "Mortgage Loan Schedule" with respect to the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, and each
Loan Number and Borrower Identification Mortgage Loan Schedule shall be deemed
to be included in the Mortgage Loan Schedule.
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.
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Master Servicer: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors and assigns, in its capacity as master servicer
hereunder.
Master Servicer Advance Date: As to any Distribution Date, 1:00 p.m.
Pacific time on the Business Day immediately preceding such Distribution Date.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the maximum rate of interest set forth as such in the related Mortgage
Note.
Maximum Rate: The weighted average of the Adjusted Maximum Mortgage
Rates on the Mortgage Loans weighted on the basis of the Stated Principal
Balance thereof and adjusted to an effective rate reflecting the accrual of
interest calculated on the basis of a 360-day year and the actual number of days
elapsed during the related interest accrual period.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R)System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.
MOM Loan: Any Mortgage Loan, as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc. 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
Mortgage Guarantee Insurance Corporation with respect to certain mortgage loans
identified in the Mortgage Loan Schedule.
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Mortgage Insurance Premium: The premium payable on the Mortgage
Insurance Policy on each Distribution Date, plus the amount of any Kentucky or
West Virginia state taxes payable by the Co-Trustee as a result of the payment
of such premium in each case as provided by the Mortgage Insurance Policy.
Mortgage Insurance Premium Rate: With respect to a Covered Mortgage
Loan and any Distribution Date, the per annum rate equal to a quotient
(expressed as a percentage), the numerator of which is equal to the portion of
the Mortgage Insurance Premium payable with respect to such Distribution Date
attributable to such Covered Mortgage Loan times twelve and the denominator of
which is equal to the sum of the Stated Principal Balance of such Covered
Mortgage Loan.
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 (x) Replacement Mortgage Loans pursuant to the
provisions of this Agreement any (y) Subsequent Mortgage Loans pursuant to the
provisions of this Agreement and any Subsequent Transfer Agreement) transferred
to the Trustee as part of the Trust Fund and from time to time subject to this
Agreement, attached hereto as Exhibit F-1, setting forth the following
information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Appraised Value;
(iii) the Initial Mortgage Rate;
(iv) the maturity date;
(v) the original principal balance;
(vi) the Cut-off Date Principal Balance;
(vii) the first payment date of the Mortgage Loan;
(viii) the Scheduled Payment in effect as of the Cut-off Date;
(ix) the Loan-to-Value Ratio or Combined Loan-to-Value Ratio, as
applicable, at origination;
(x) a code indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(xi) a code indicating whether the residential dwelling is
either (a) a detached single family dwelling (b) a condominium unit or
(c) a two- to four-unit residential property;
(xii) if such Mortgage Loan is a Fixed Rate Mortgage Loan, a
code indicating whether such Mortgage Loan is a Credit Comeback Loan;
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(xiii) the rate for the Mortgage Insurance Premium, if applicable;
(ix) with respect to each Adjustable Rate Mortgage Loan;
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Periodic Rate Cap;
(g) the Gross Margin; and
(h) the purpose of the Mortgage Loan.
The Mortgage Loan Schedule shall be deemed to include for all purposes each Loan
Number and Borrower Identification Mortgage Loan Schedule delivered pursuant to
Section 2.01(f) and all the related Subsequent Mortgage Loans and Subsequent
Mortgage Loan information included therein.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions hereof and any Subsequent Transfer
Agreement as from time to time are held as a part of the Trust Fund (including
any REO Property), the mortgage loans so held being identified in the Mortgage
Loan Schedule, notwithstanding foreclosure or other acquisition of title of the
related Mortgaged Property. Any Mortgage Loan subject to repurchase by the
Seller or Master Servicer as provided in this Agreement, shall continue to be a
Mortgage Loan hereunder until the Purchase Price with respect thereto has been
paid to the Trustee.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgage 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 1.50% per annum from the related mortgage rate at origination,
whether or not the Mortgagor actually qualifies for such reduction pursuant to
the terms of the related Mortgage or Mortgage Note.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligors on a Mortgage Note.
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Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
Net Rate Cap: For any Distribution Date, the weighted average Adjusted
Net Mortgage Rate on the Mortgage Loans in the Trust Fund, adjusted to an
effective rate reflecting the calculation of interest on the basis of the actual
number of days elapsed during the Accrual Period and a 360-day year.
Net Rate Carryover: With respect to any Distribution Date, an amount
equal to the sum of (i) the Class A Interest Carryover Amount for such
Distribution Date (if any), (ii) the Class A-R Interest Carryover Amount for
such Distribution Date (if any), (iii) the Class M-1 Interest Carryover Amount
for such Distribution Date (if any), (iv) the Class M-2 Interest Carryover
Amount for such Distribution Date (if any), (v) the Class B-1 Interest Carryover
Amount for such Distribution Date (if any) and (vi) the Class B-2 Interest
Carryover Amount for such Distribution Date (if any); provided that when the
term Net Rate Carryover is used with respect to one Class of Certificates (other
than the Class A-IO Certificates), it shall mean such carryover amount listed in
clauses (i), (ii), (iii), (iv) or (v) as applicable, with the same Class
designation. The Class A-IO Certificates shall not accrue any Net Rate
Carryover.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not or, in the case of a current delinquency, would
not, be ultimately recoverable by the Master Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.
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 or the Master Servicer,
(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, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR calculated for the first Accrual Period shall equal 1.90% per annum. If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, such other
service for displaying One-Month LIBOR or comparable rates as may be reasonably
selected by the Trustee), One-Month LIBOR for the applicable Accrual Period will
be the Reference Bank Rate. If no such quotations can be obtained by the Trustee
and no Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Accrual Period.
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Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or 10.01,
or the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor and the Master Servicer, (ii) not
have any direct financial interest in the Depositor or the Master Servicer or in
any affiliate of either, and (iii) not be connected with the Depositor or the
Master Servicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Optional Termination: The termination of the Trust Fund provided
hereunder pursuant to the purchase of the Mortgage Loans pursuant to the last
sentence of Section 9.01 hereof.
Optional Termination Date: Any Distribution Date on which the Stated
Principal Balance of the Mortgage Loans is equal to or less than 10% of the sum
of the Stated Principal Balance of the Initial Mortgage Loans as of the Initial
Cut-off Date plus the Pre-Funded Amount.
Original Mortgage Loan: The mortgage loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.
Original Value: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal satisfactory to the Master Servicer or the sales price of
such property or, in the case of a refinancing, on an appraisal satisfactory to
the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Loan, prior
to the end of the related Prepayment Period.
Ownership Interest: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
Pass-Through Rate: With respect to the Class A Certificates, the Class
A Pass-Through Rate; with respect to the Class A-IO Certificates, the Class A-IO
Pass-Through Rate; with respect to the Class A-R Certificates, the Class A-R
Pass-Through Rate; with respect to the
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Class M-1 Certificates, the Class M-1 Pass-Through Rate; with respect to the
Class M-2 Certificates, the Class M-2 Pass-Through Rate; with respect to the
Class B-1 Certificates, the Class B-1 Pass-Through Rate; and with respect to
the Class B-2 Certificates, the Class B-2 Pass-Through Rate.
Percentage Interest: With respect to:
(i) any Class, the percentage interest in the undivided beneficial
ownership interest in the related Certificates evidenced by such Class
which shall be equal to the Certificate Principal Balance of such Class
divided by the Certificate Principal Balance of all Certificates of such
Class; and
(ii) any Certificate, the Percentage Interest evidenced thereby of the
related Class shall equal the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of
all Certificates of such Class.
Periodic Rate Cap: As to substantially all Adjustable Rate Mortgage
Loans and the related Mortgage Notes, the provision therein that limits
permissible increases and decreases in the Mortgage Rate on any Adjustment Date
to not more than three percentage points.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the United
States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as each
Rating Agency has confirmed in writing will not result in the downgrading
or withdrawal of the ratings then assigned to the Certificates by such
Rating Agency;
(iii) [Reserved];
(iv) commercial or finance company paper which is then receiving the
highest commercial or finance company paper rating of each Rating Agency,
or such lower rating as each Rating Agency has confirmed in writing will
not result in the downgrading or withdrawal of the ratings then assigned to
the Certificates by such Rating Agency;
(v) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state thereof
and subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long term unsecured
debt obligations of such depository institution or trust company (or in the
case of the principal depository institution in a holding company system,
the commercial paper or long-term unsecured debt obligations of such
holding company, but only if Xxxxx'x is not a Rating Agency) are then rated
one of the two highest long-term and the highest short-term ratings of each
such Rating Agency for such securities, or such lower
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ratings as each Rating Agency has confirmed in writing will not result in
the downgrading or withdrawal of the rating then assigned to the
Certificates by such Rating Agency;
(vi) repurchase obligations with respect to any security described in
clauses (i) and (ii) above, in either case entered into with a depository
institution or trust company (acting as principal) described in clause (v)
above;
(vii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face amount
thereof) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof
which, at the time of such investment, have one of the two highest long
term ratings of each Rating Agency (except (x) if the Rating Agency is
Moody's, such rating shall be the highest commercial paper rating of S&P
for any such securities) and (y), or such lower rating as each Rating
Agency has confirmed in writing will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by such Rating
Agency;
(viii) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable long term rating
by each Rating Agency or such lower rating as each Rating Agency has
confirmed in writing will not result in the downgrading or withdrawal of
the ratings then assigned to the Certificates by such Rating Agency;
(ix) short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the United
States or any state thereof which on the date of acquisition has been rated
by each Rating Agency in their respective highest applicable rating
category or such lower rating as each Rating Agency has confirmed in
writing will not result in the downgrading or withdrawal of the ratings
then assigned to the Certificates by such Rating Agency; and
(x) such other relatively risk free investments having a specified
stated maturity and bearing interest or sold at a discount acceptable to
each Rating Agency as will not result in the downgrading or withdrawal of
the rating then assigned to the Certificates by any Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC (including, without limitation, any
amounts collected by the
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Master Servicer but not yet deposited in the Certificate Account) may be
invested in investments (other than money market funds) treated as equity
interests for Federal income tax purposes, unless the Master Servicer shall
receive an Opinion of Counsel, at the expense of Master Servicer, to the effect
that such investment will not adversely affect the status of any such REMIC as a
REMIC under the Code or result in imposition of a tax on any such REMIC.
Permitted Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.
Permitted Transferee: Any person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Pool Characteristics: The Mortgage Loan characteristics identified
under the heading "Pool Characteristics" beginning on page S-18 of the
Prospectus Supplement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date.
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Pre-Funded Amount: The amount deposited in the Pre-Funding Account on
the Closing Date, which shall equal $49,310,106.64.
Pre-Funding Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and designated "The Bank of New York,
in trust for registered holders of CWABS, Inc., Asset-Backed Certificates,
Series 2002-1." Funds in the Pre-Funding Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement and
shall not be a part of any REMIC created hereunder, provided, however that any
investment income earned from Permitted Investments made with funds in the
Pre-Funding Account will be for the account of the Depositor.
Prepayment Assumption: The applicable rate of prepayment, as described
in the Prospectus Supplement relating to the Certificates (other than the Class
A-IO Certificates).
Prepayment Interest Excess: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment during the
period from the second day through the fifteenth day of the month of such
Distribution Date, any payment of interest received in connection therewith (net
of any applicable Servicing Fee) representing interest accrued for any portion
of such month of receipt.
Prepayment Interest Shortfall: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the period
from the sixteenth day of the month through the last day of the month preceding
such Distribution Date, or in the case of the first Distribution Date, from the
Cut-off Date through and including the last day of the month preceding such
Distribution Date, (other than a Principal Prepayment in full resulting from the
purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 2.04, 3.12 or 9.01
hereof), the amount, if any, by which (i) one month's interest at the applicable
Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan
immediately prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment (or liquidation
proceeds) exceeds (ii) the amount of interest paid or collected in connection
with such Principal Prepayment or such liquidation proceeds.
Prepayment Period: As to any Distribution Date, the time period
beginning with the opening of business on the sixteenth day of the calendar
month preceding the month in which such Distribution Date occurs (or, with
respect to the first Distribution Date, the period from the Cut-off Date) and
ending on the close of business on the fifteenth day of the month in which such
Distribution Date occurs.
Primary Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to (x) the Net Rate Carryover for such
Distribution Date, less (y) any amounts received under the Cap Contract for such
Distribution Date, less (z) the Excluded Carryover Amount for such Distribution
Date.
Principal Distribution Amount: With respect to each Distribution Date,
the sum of (i) the Principal Funds for such Distribution Date and (ii) for the
Distribution Date
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immediately following the end of the Pre-Funding Period, any amounts remaining
in the Pre-Funding Account after the end of the Funding Period (net of any
investment income therefrom).
Principal Funds: The Principal Remittance Amount plus any Enhancement
Payment.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 and 9.01 hereof)
that is received in advance of its scheduled Due Date and is not accompanied by
an amount as to interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance with
the terms of the related Mortgage Note.
Principal Remittance Amount: (a) The sum, without duplication, of: (i)
the scheduled principal collected during the related Due Period or advanced on
or before the related Master Servicer Advance Date, (ii) prepayments collected
in the related Prepayment Period, (iii) the Stated Principal Balance of each
Mortgage Loan that was repurchased by the Seller or the Master Servicer, (iv)
the amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loans is less than the aggregate unpaid principal balance
of any Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan and (v) all Liquidation Proceeds collected
during the related Due Period (to the extent such Liquidation Proceeds related
to principal); less (b) all non-recoverable Advances relating to principal and
certain expenses reimbursed during the related Due Period.
Prospectus Supplement: The Prospectus Supplement dated March 14, 2002,
relating to the public offering of the Certificates offered thereby.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to be
(1) repurchased by the Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) repurchased by
the Depositor pursuant to Section 2.04 hereof, or (y) that the Master Servicer
has a right to purchase pursuant to Section 3.12 hereof, an amount equal to the
sum of (i) 100% of the unpaid principal balance (or, if such purchase or
repurchase, as the case may be, is effected by the Master Servicer, the Stated
Principal Balance) of the Mortgage Loan as of the date of such purchase and (ii)
accrued interest thereon at the applicable Mortgage Rate (or, if such purchase
or repurchase, as the case may be, is effected by the Master Servicer, at the
Net Mortgage Rate) from (a) the date through which interest was last paid by the
Mortgagor (or, if such purchase or repurchase, as the case may be, is effected
by the Master Servicer, the date through which interest was last advanced and
not reimbursed by the Master Servicer) to (b) the Due Date in the month in which
the Purchase Price is to be distributed to Certificateholders.
Rating Agency: Moody's and S&P. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which
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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 the Class A-IO Certificates and the Class
A-R Certificates, the last Business Day of the month preceding the month of a
Distribution Date. With respect to the Class A, Class M-1, Class M-2, Class B-1
and Class B-2 Certificates, the Business Day immediately preceding a
Distribution Date, or if such Certificates are no longer book-entry
certificates, the last Business Day of the month preceding the month of a
Distribution Date.
Reference Bank Rate: With respect to any Accrual Period, the arithmetic
mean (rounded upwards, if necessary, to the nearest whole multiple of 0.03125%)
of the offered rates for United States dollar deposits for one month that are
quoted by the Reference Banks as of 11:00 a.m., New York City time, on the
related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the
outstanding balance of the Class A, Class A-R, Class M-1, Class M-2, Class B-1
and Class B-2 Certificates on such Interest Determination Date, provided that at
least two such Reference Banks provide such rate. If fewer than two offered
rates appear, the Reference Bank Rate will be the arithmetic mean (rounded
upwards, if necessary, to the nearest whole multiple of 0.03125%) of the rates
quoted by one or more major banks in New York City, selected by the Trustee, as
of 11:00 a.m., New York City time, on such date for loans in U.S. dollars to
leading European banks for a period of one month in amounts approximately equal
to the outstanding balance of the Class A, Class A-R, Class M-1, Class M-2,
Class B-1 and Class B-2 Certificates on such Interest Determination Date.
Reference Banks: Barclays Bank PLC, Bankers Trust and NatWest, N.A.,
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor or
any affiliate thereof and (iii) which have been designated as such by the
Trustee.
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Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificate: Any Certificate other than a Class A-R
Certificate.
REO Property: A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit N, (i)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan; (ii)
with respect to any Fixed Rate Mortgage Loan, have a Mortgage Rate not less than
or no more than 1% per annum higher than the Mortgage Rate of the Deleted
Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan: (a) have a
Maximum Mortgage Rate no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no
more than 1% per annum higher or lower than the Minimum Mortgage Rate of the
Deleted Mortgage Loan; (c) have the same Index, Periodic Rate Cap and intervals
between Adjustment Dates as that of the Deleted Mortgage Loan and a Gross Margin
not more than 1% per annum higher or lower than that of the Deleted Mortgage
Loan; and (d) not permit conversion of the related Mortgage Rate to a fixed
Mortgage Rate; (iii) have the same or higher credit quality characteristics than
that of the Deleted Mortgage Loan; (iv) at the time of transfer to the Trustee,
be accruing interest at a Mortgage Rate not more than 1% per annum higher or
lower than that of the Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio or
Combined Loan-to-Value Ratio, as applicable, no higher than that of the Deleted
Mortgage Loan; (vi) have a remaining term to maturity no greater than (and not
more than one year less than) that of the Deleted Mortgage Loan; (vii) not
permit conversion of the Mortgage Rate from a fixed rate to a variable rate or
visa versa; (viii) provide for a prepayment charge on terms substantially
similar to those of the prepayment charge, if any, of the Deleted Mortgage Loan;
(ix) have the same lien priority as the Deleted Mortgage Loan; (x) constitute
the same occupancy type as the Deleted Mortgage Loan; (xi) be covered by the
Mortgage Insurance Policy if the Deleted Mortgage Loan was covered by the
Mortgage Insurance Policy, and (xii) comply with each representation and
warranty set forth in Section 2.03 hereof.
Request for Release: The Request for Release submitted by the Master
Servicer to the Trustee, substantially in the form of Exhibits M and N, as
appropriate.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Required Percentage: With respect to any Distribution Date after the
Stepdown Date, is equal to the quotient of (x) the excess of (I) the Stated
Principal Balance of the Mortgage Loans for the preceding Distribution Date over
(II) the Certificate Principal Balance of the most senior Class of the
Certificates outstanding as of the preceding Master Servicer Advance Date and
(y) the Stated Principal Balance of the Mortgage Loans for the preceding
Distribution Date.
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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.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan.
Secondary Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to the excess of (i) $10,000 over (ii) the
amount of funds on deposit in the Carryover Reserve Fund following the deposit
therein of (x) amounts received in respect of the Cap Contract pursuant to
Section 4.04(b) and (y) the Primary Carryover Reserve Fund Deposit pursuant to
Section 4.04(a) and following distributions therefrom pursuant to Section
4.04(c).
Seller: Countrywide Home Loans, Inc., a New York corporation, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Seller Loss Coverage Amount: With respect to the first Distribution
Date, an amount equal to the Initial Seller Loss Coverage Amount. With respect
to any Distribution Date prior to the Stepdown Date or as to which a Trigger
Event is in effect, an amount equal to the Initial Seller Loss Coverage Amount
minus all Enhancement Payments made prior to such Distribution Date. With
respect to each Distribution Date on or after the Stepdown Date and as to which
a Trigger Event is not in effect, the lesser of (i) the Initial Seller Loss
Coverage Amount minus all Enhancement Payments made prior to such Distribution
Date, and (ii) 3.80% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date; provided, however, in the case of clause (ii),
that such amount shall be subject to a floor of 0.25% of the aggregate original
Certificate Principal Balance of the Certificates.
Seller Loss Coverage Obligation: Pursuant to the obligation of the
Seller described in Section 2.08, an amount the Seller will provide as coverage
against losses realized on the Mortgage Loans that the Certificates would
otherwise absorb; provided that such amount is limited to no more than the
Seller Loss Coverage Amount.
Seller Shortfall Interest Requirement: For the Master Servicer Advance
Date in April, May or June 2002, the product of:
(a) the excess of the aggregate Stated Principal Balance of the
Mortgage Loans (including the Subsequent Mortgage Loans, if any, as of the
applicable date) plus the Pre-Funded Amount on deposit in the Pre-Funding
Account at the beginning of the related Due Period, over the aggregate Stated
Principal Balance of the Mortgage Loans (including the Subsequent Mortgage Loans
, if any, as of the applicable date) that have a scheduled payment of interest
due in the related Due Period, and
(b) a fraction, the numerator of which is the weighted average Adjusted
Net Mortgage Rates of the Mortgage Loans (including the Subsequent Mortgage
Loans, if any, as of the applicable date) (weighted on the basis of the Stated
Principal Balances thereof) as of the
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beginning of the Due Period for the related Distribution Date and the
denominator of which is 12.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations hereunder, including, but not limited to, the cost of
(i) the preservation, restoration and protection of a Mortgaged Property, (ii)
any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan or, in the event of any payment of
interest that accompanies a Principal Prepayment in full made by the Mortgagor,
interest at the Servicing Fee Rate on the Stated Principal Balance of such
Mortgage Loan for the period covered by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc. and its successors.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, and (ii) as of any Distribution Date,
such Cut-off Date Principal Balance minus the sum of (a) the principal portion
of the Scheduled Payments (x) due with respect to such Mortgage Loan during each
Due Period ending prior to such Distribution Date and (y) that were received by
the Master Servicer as of the close of business on the Determination Date
related to such Distribution Date or with respect to which Advances were made as
of the Master Servicer Advance Date related to such Distribution Date, (b) all
Principal Prepayments with respect to such Mortgage Loan received by the Master
Servicer during each Prepayment Period ending prior to such Distribution Date,
and (c) all Liquidation Proceeds collected with respect to such Mortgage Loan
during each Due Period ending prior to such Distribution Date, to the extent
applied by the Master Servicer as recoveries of principal in accordance with
Section 3.12. The Stated Principal Balance of any Mortgage Loan that becomes a
Liquidated Loan will be zero on the Distribution 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 Balances of all Mortgage Loans in the Trust Fund as
of such time.
Stepdown Date: The later to occur of (i) the Distribution Date in April
2005 or (ii) the first Distribution Date on which the Class A Certificate
Principal Balance (after calculating distributions on such Distribution Date) is
less than or equal to 86.00% of the aggregate Stated Principal Balances of the
Mortgage Loans for such Distribution Date.
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Subordinate Certificates: The Class M-1, Class M-2, Class B-1 and Class
B-2 Certificates.
Subsequent Certificate Account Deposit: With respect to any Subsequent
Transfer Date, an amount equal to the aggregate of all amounts in respect of (i)
principal of the related Subsequent Mortgage Loans due after the related
Subsequent Cut-off Date and received by the Master Servicer on or before such
Subsequent Transfer Date and not applied in computing the Cut-off Date Principal
Balance thereof and (ii) interest on the such Subsequent Mortgage Loans due
after such Subsequent Cut-off Date and received by the Master Servicer on or
before the Subsequent Transfer Date.
Subsequent Cut-off Date: As defined in the definition of Cut-off Date.
Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the Trustee
pursuant to Section 2.01(b) on a Subsequent Transfer Date, and listed on the
related Loan Number and Borrower Identification Mortgage Loan Schedule delivered
pursuant to Section 2.01(f). When used with respect to a single Subsequent
Transfer Date, "Subsequent Mortgage Loan" shall mean a Subsequent Mortgage Loan
conveyed to the Trustee on such Subsequent Transfer Date.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit Q hereto, executed and delivered by the
Seller, the Depositor and the Trustee as provided in Section 2.01(d).
Subsequent Transfer Date: For any Subsequent Transfer Agreement, the
"Subsequent Transfer Date" identified in such Subsequent Transfer Agreement;
provided, however, the Subsequent Transfer Date for any Subsequent Transfer
Agreement may not be a date earlier than the date on which the Subsequent
Transfer Agreement is executed and delivered by the parties thereto pursuant to
Section 2.01(d).
Subsequent Transfer Date Aggregate Purchase Amount: With respect to any
Subsequent Transfer Date, the "Subsequent Transfer Date Aggregate Purchase
Amount" identified in the related Subsequent Transfer Agreement which shall be
an estimate of the aggregate Stated Principal Balances of the Subsequent
Mortgage Loans identified in such Subsequent Transfer Agreement.
Subsequent Transfer Date Aggregate Transfer Amount: With respect to any
Subsequent Transfer Date, the aggregate Stated Principal Balances as of the
related Subsequent Cut-off Dates of the Subsequent Mortgage Loans conveyed on
such Subsequent Transfer Date, as listed on the related Loan Number and Borrower
Identification Mortgage Loan Schedule delivered pursuant to Section 2.01(f);
provided, however, that such amount shall not exceed the amount on deposit in
the Pre-Funding Account.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
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Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(c).
Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(c), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. Initially, this person shall be the
Trustee.
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.05.
Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 36 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Trigger Event: With respect to any Distribution Date after the Stepdown
Date exists if the product of (i) 0.75 times (ii) the quotient (expressed as a
percentage) of (A) the numerator of which is the aggregate Stated Principal
Balance for such Distribution Date of all Mortgage Loans 60 or more days
delinquent as of the close of business on the last day of the calendar month
preceding such Distribution Date (including Mortgage Loans in foreclosure and
REO Properties) and (B) the denominator of which is the aggregate Stated
Principal Balance for such Distribution Date of all Mortgage Loans, equals or
exceeds the related Required Percentage.
Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto on and after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Certificate Account pursuant to Section 3.05(b)(ii); (ii) the
Certificate Account, the Distribution Account, the Pre-Funding Account and 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
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may be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the sum of (i) the Pool Stated
Principal Balance plus (ii) any amounts remaining in the Pre-Funding Account
(excluding any investment earnings thereon) with respect to such Distribution
Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per annum
rate agreed upon in writing on or prior to the Closing Date by the Trustee and
the Depositor, which is 0.009% per annum.
Two-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 24 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
Underwriter's Exemption: Prohibited Transaction Exemption 2000-58, 65
Fed. Reg. 67765 (2000), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.
Unused Pre-Funded Amount: The Pre-Funded Amount less any Subsequent
Transfer Date Aggregate Transfer Amounts.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any Certificates for purposes of the voting provisions
hereunder. Voting Rights allocated to each Class of Certificates shall be
allocated 95% to the Class A, Class M-1, Class M-2, Class B-1 and Class B-2
Certificates, and 5% to the Class A-IO Certificates and Class A-R Certificates;
with the allocation among the Class A, Class M-1, Class M-2, Class B-1 and Class
B-2 Certificates to be in proportion to the Certificate Principal Balance of
each Class relative to the Certificate Principal Balance of all other such
Classes, and with the allocation among the Class A-IO and Class A-R Certificates
being one-half each. Voting Rights will be allocated among the Certificates of
each such Class in accordance with their respective Percentage Interests.
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ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of the Seller in and to the Initial Mortgage Loans, including all
interest and principal received and receivable by the Seller on or with respect
to the Initial Mortgage Loans after the Initial 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 an Initial Certificate Account
Deposit as provided in this Agreement, other than principal due on the Initial
Mortgage Loans on or prior to the Initial Cut-off Date and interest accruing
prior to the Initial Cut-off Date. The Seller confirms that, concurrently with
the transfer and assignment, it has deposited into the Certificate Account the
Initial Certificate Account Deposit.
Immediately upon the conveyance of the Initial 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 Initial Mortgage Loans and
causes the Seller to issue the Seller Loss Coverage Obligation in favor of the
Trust pursuant to Section 2.08 hereof.
The Seller further agrees to assign all of its right, title and
interest in and to the interest rate cap transaction evidenced by the Amended
Confirmation And Agreement to, 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.
(b) Subject to the execution and delivery of the related Subsequent
Transfer Agreement as provided by Section 2.01(d) and the terms and conditions
of this Agreement, the Seller sells, transfers, assigns, sets over and otherwise
conveys to the Depositor, without recourse, on each Subsequent Transfer Date,
all the right, title and interest of the Seller in and to the related Subsequent
Mortgage Loans, including all interest and principal received and receivable by
the Seller on or with respect to such Subsequent Mortgage Loans after the
related Subsequent 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 Subsequent Certificate Account Deposit as provided in
this Agreement, other than principal due on such Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date and interest accruing prior to the
related Subsequent Cut-off Date.
Immediately upon the conveyance of the Subsequent 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
Subsequent Mortgage Loans.
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(c) The Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein. The Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders,
without recourse, all right title and interest in the portion of the Trust Fund
not otherwise conveyed to the Trustee pursuant to Sections 2.01(a) or (b).
(d) On any Business Day during the Funding Period designated by the
Seller to the Trustee, the Seller, the Depositor and the Trustee shall complete,
execute and deliver a Subsequent Transfer Agreement. After the execution and
delivery of such Subsequent Transfer Agreement, on the Subsequent Transfer Date,
the Trustee shall set aside in the Pre-Funding Account an amount equal to the
related Subsequent Transfer Date Aggregate Purchase Amount.
(e) The transfer of Subsequent Mortgage Loans on the Subsequent
Transfer Date is subject to the satisfaction of each of the following
conditions:
(i) the Trustee will be provided Opinions of Counsel addressed to the
Rating Agencies as with respect to the sale of the Subsequent Mortgage
Loans conveyed on such Subsequent Transfer Date (such opinions being
substantially similar to the opinions delivered on the Closing Date to the
Rating Agencies with respect to the sale of the Initial Mortgage Loans on
the Closing Date), to be delivered as provided in Section 2.01(f);
(ii) the execution and delivery of such Subsequent Transfer Agreement
or conveyance of the related Subsequent Mortgage Loans does not result in a
reduction or withdrawal of the any ratings assigned to the Certificates by
the Ratings Agencies;
(iii) the Depositor shall deliver to the Trustee an Officer's
Certificate confirming the satisfaction of each of the conditions set forth
in this Section 2.01(e) required to be satisfied by such Subsequent
Transfer Date;
(iv) each Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date satisfies the representations and warranties applicable to it
under this Agreement, provided, however, that with respect to a breach of a
representation and warranty with respect to a Subsequent Mortgage Loan set
forth in this clause (iv), the obligation under Section 2.03(e) of this
Agreement of the Seller to cure, repurchase or replace such Subsequent
Mortgage Loan shall constitute the sole remedy against the Seller
respecting such breach available to Certificateholders, the Depositor or
the Trustee.
(v) the Subsequent Mortgage Loans conveyed on such Subsequent Transfer
Date were selected in a manner reasonably believed not to be adverse to the
interests of the Certificateholders;
(vi) no Subsequent Mortgage Loan conveyed on such Subsequent Transfer
Date was 60 or more days delinquent;
(vii) following the conveyance of all the Subsequent Mortgage Loans on
such Subsequent Transfer Date, the Mortgage Pool will have characteristics
that fall within the Pool Characteristics; provided that for the purpose of
making such calculations, the
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characteristics for any Initial Mortgage Loan will be taken as of the
Initial Cut-off Date and for any Subsequent Mortgage Loan will be taken
as of the Subsequent Cut-off Date;
(viii) neither the Seller nor the Depositor is insolvent and neither
the Seller nor the Depositor will be rendered insolvent by the conveyance
of Subsequent Mortgage Loans on such Subsequent Transfer Date; and
(ix) the Trustee will be provided with an Opinion of Counsel, which
Opinion of Counsel shall not be at the expense of either the Trustee or the
Trust Fund, addressed to the Trustee, to the effect that such purchase of
Subsequent Mortgage Loans will not (i) result in the imposition of the tax
on "prohibited transactions" on the Trust Fund or contributions after the
Startup Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code,
respectively or (ii) cause the Trust Fund to fail to qualify as a REMIC,
such opinion to be delivered as provided in Section 2.01(f).
The Trustee shall not be required to investigate or otherwise verify
compliance with these conditions, except for its own receipt of documents
specified above, and shall be entitled to rely on the required Officer's
Certificate.
(f) Within five Business Days after each Subsequent Transfer Date, upon
(1) delivery to the Trustee by the Depositor of the Opinions of Counsel referred
to in Section 2.01(e)(i) and (e)(ix), (2) delivery to the Trustee by the Seller
of a Loan Number and Borrower Identification Mortgage Loan Schedule reflecting
the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date and (3)
delivery to the Trustee by the Depositor of an Officer's Certificate confirming
the satisfaction of each of the conditions precedent set forth in this Section
2.01(f), the Trustee shall pay the Seller the Subsequent Transfer Date Aggregate
Transfer Amount from such funds that were set aside in the Pre-Funding Account
pursuant to Section 2.01(d). The positive difference, if any, between the
Subsequent Transfer Date Aggregate Transfer Amount and the Subsequent Transfer
Date Aggregate Purchase Amount shall be re-invested by the Trustee in the
Pre-Funding Account.
The Trustee shall not be required to investigate or otherwise verify
compliance with the conditions set forth in the preceding paragraph, except for
its own receipt of documents specified above, and shall be entitled to rely on
the required Officer's Certificate.
Within thirty days after each Subsequent Transfer Date, the Depositor
shall deliver to the Trustee a letter of a nationally recognized firm of
independent public accountants stating whether or not the Subsequent Mortgage
Loans conveyed on such Subsequent Transfer Date conform to the characteristics
described in Section 2.01(e)(vi) and (vii).
(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):
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(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse, in the following form:
"Pay to the order of ________________ without recourse", with all
intervening endorsements that show a complete chain of endorsement from the
originator to the Seller, or, if the original Mortgage Note has been lost
or destroyed and not replaced, an original lost note affidavit from the
Seller, stating that the original Mortgage Note was lost or destroyed,
together with a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage, and in the case of each MERS Mortgage
Loan, the original Mortgage, noting the presence of the MIN of the Mortgage
Loan and language indicating that the Mortgage Loan is a MOM Loan if the
Mortgage Loan is a MOM Loan, with evidence of recording indicated thereon,
or a copy of the Mortgage certified by the public recording office in which
such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2002-1, CWABS, Inc., by The Bank of New York, a New
York banking corporation, as trustee under the Pooling and Servicing
Agreement dated as of March 1, 2002, without recourse" (each such
assignment, when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage (noting the
presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or, in the
event such original title policy has not been received from the insurer,
such original or duplicate original lender's title policy and all riders
thereto shall be delivered within one year of the Closing Date.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at the Seller's own expense, the
MERS(R) System to indicate (and 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 (and any Subsequent Transfer Agreement, as
applicable) 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
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any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv) concurrently with the execution and delivery hereof,
the Seller shall deliver or cause to be delivered to the Co-Trustee a true copy
of such Mortgage and of each such undelivered interim assignment of the Mortgage
each certified by the Seller, the applicable title company, escrow agent or
attorney, or the originator of such Mortgage, as the case may be, to be a true
and complete copy of the original Mortgage or assignment of Mortgage submitted
for recording. For any such Mortgage Loan that is not a MERS Mortgage Loan the
Seller shall promptly deliver or cause to be delivered to the Co-Trustee such
original Mortgage and such assignment or assignments with evidence of recording
indicated thereon upon receipt thereof from the public recording official, or a
copy thereof, certified, if appropriate, by the relevant recording office, but
in no event shall any such delivery be made later than 270 days following the
Closing Date; provided that in the event that by such date the Seller is unable
to deliver or cause to be delivered each such Mortgage and each interim
assignment by reason of the fact that any such documents have not been returned
by the appropriate recording office, or, in the case of each interim assignment,
because the related Mortgage has not been returned by the appropriate recording
office, the Seller shall deliver or cause to be delivered such documents to the
Co-Trustee as promptly as possible upon receipt thereof. If the public recording
office in which a Mortgage or interim assignment thereof is recorded retains the
original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office, shall satisfy the Seller's obligations in
Section 2.01. If any document submitted for recording pursuant to this Agreement
is (x) lost prior to recording or rejected by the applicable recording office,
the Seller shall immediately prepare or cause to be prepared a substitute and
submit it for recording, and shall deliver copies and originals thereof in
accordance with the foregoing or (y) lost after recording, the Seller shall
deliver to the Co-Trustee a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original recorded
document. The Seller shall promptly forward or cause to be forwarded to the
Co-Trustee (x) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (y) any other documents
required to be delivered by the Depositor or the Master Servicer to the Trustee
within the time periods specified in this Section 2.01.
With respect to each Mortgage Loan other than a MERS Mortgage Loan as
to which the related Mortgaged Property and Mortgage File are located in (a) the
State of California or (b) any other jurisdiction under the laws of which the
recordation of the assignment specified in clause (iii) above is not necessary
to protect the Trustee's and the Certificateholders, interest in the related
Mortgage Loan, as evidenced by an Opinion of Counsel, delivered by the Seller to
the Trustee and a copy to the Rating Agencies, in lieu of recording the
assignment specified in clause (iii) above, the Seller may deliver an unrecorded
assignment in blank, in form otherwise suitable for recording to the Co-Trustee;
provided that if the related Mortgage has not been returned from the applicable
public recording office, such assignment, or any copy thereof, of the Mortgage
may exclude the information to be provided by the recording office. As to any
Mortgage Loan other than a MERS Mortgage Loan, the procedures of the preceding
sentence
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shall be applicable only so long as the related Mortgage File is maintained in
the possession of the Co-Trustee in the State or jurisdiction described in such
sentence. In the event that with respect to Mortgage Loans other than MERS
Mortgage Loans (i) the Seller, the Depositor or the Master Servicer gives
written notice to the Trustee that recording is required to protect the right,
title and interest of the Trustee on behalf of the Certificateholders in and to
any Mortgage Loan, (ii) a court recharacterizes the sale of the Mortgage Loans
as a financing, or (iii) as a result of any change in or amendment to the laws
of the State or jurisdiction described in the first sentence of this paragraph
or any applicable political subdivision thereof, or any change in official
position regarding application or interpretation of such laws, including a
holding by a court of competent jurisdiction, such recording is so required, the
Trustee or the Co-Trustee shall complete the assignment in the manner specified
in clause (iii) of the second paragraph of this Section 2.01 and the Seller
shall submit or cause to be submitted for recording as specified above or,
should the Seller fail to perform such obligations, the Trustee shall cause the
Master Servicer, at the Master Servicer's expense, to cause each such previously
unrecorded assignment to be submitted for recording as specified above. In the
event a Mortgage File is released to the Master Servicer as a result of the
Master Servicer's having completed a Request for Release in the form of Exhibit
M, the Trustee shall complete the assignment of the related Mortgage in the
manner specified in clause (iii) of the second paragraph of this Section 2.01.
So long as the Co-Trustee maintains an office in the State of
California, the Co-Trustee shall maintain possession of and not remove or
attempt to remove from the State of California any of the Mortgage Files as to
which the related Mortgaged Property is located in such State. In the event that
the Seller fails to record an assignment of a Mortgage Loan as herein provided
within 90 days of notice of an event set forth in clause (i), (ii) or (iii) of
the above paragraph, the Master Servicer shall prepare and, if required
hereunder, file such assignments for recordation in the appropriate real
property or other records office. The Seller hereby appoints the Master Servicer
(and any successor servicer hereunder) as its attorney-in-fact with full power
and authority acting in its stead for the purpose of such preparation, execution
and filing.
In the case of Mortgage Loans that become the subject of a Principal
Prepayment between the Closing Date (in the case of Initial Mortgage Loans) or
Subsequent Transfer Date (in the case of Subsequent Mortgage Loans) 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 (in the case of Initial Mortgage Loans) or
Subsequent Transfer Date (in the case of Subsequent Mortgage Loans), 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
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deliver. The Seller shall promptly provide each Rating Agency with written
notice of any cure, repurchase or substitution made pursuant to the proviso of
the preceding sentence. On or before the thirtieth (30th) day (or if such
thirtieth day is not a Business Day, the succeeding Business Day) after the
Closing Date (in the case of Initial Mortgage Loans) or Subsequent Transfer Date
(in the case of Subsequent Mortgage Loans), the Trustee shall, in accordance
with the provisions of Section 2.02, send a Delay Delivery Certification
substantially in the form annexed hereto as Exhibit G-3 (with any applicable
exceptions noted thereon) for all Delay Delivery Mortgage Loan delivered within
thirty (30) days after such date. The Trustee will promptly send a copy of such
Delay Delivery Certification to each Rating Agency.
Section 2.02 Acceptance 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 Initial 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 Initial Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Initial Mortgage Loan paid in full or any Initial Mortgage Loan specifically
identified in such certification as not covered by such certification), the
documents described in Section 2.01(g)(i) and, in the case of each Mortgage Loan
that is not a MERS Mortgage Loan, the documents described in Section
2.01(g)(iii), with respect to such Initial Mortgage Loan are in the Co-Trustee's
possession, and based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and relate to such
Initial 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 Initial Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Initial Mortgage Loan paid in full or any Initial
Mortgage Loan specifically identified in such certification as not covered by
such certification), all documents required to be delivered to the Co-Trustee
pursuant to this Agreement with respect to such Initial Mortgage Loan are in its
possession (except those described in Section 2.01(g)(vi)) and based on its
review and examination and only as to the foregoing documents, (i) such
documents appear regular on their face and relate to such Initial 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
Initial 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,
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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
Initial 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 Initial 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 Initial Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case of each
Initial Mortgage Loan that is a MERS Mortgage Loan, the original Mortgage,
noting the presence of the MIN of the Initial Mortgage Loan and language
indicating that the Initial Mortgage Loan is a MOM Loan if the Initial
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 Initial 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
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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 Initial 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 Initial 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 Initial 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 the Seller repurchases
an Initial 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)(A) or (B) above shall constitute the sole remedy
respecting such defect available to the Trustee, the Co-Trustee, the Depositor
and any Certificateholder against the Seller.
(b) The Trustee agrees to execute and deliver on the Subsequent
Transfer Date to the Depositor, the Master Servicer and the Seller an Initial
Certification substantially in the form annexed hereto as Exhibit G-4 to the
effect that, as to each Subsequent Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Subsequent Mortgage Loan paid in full or any Subsequent
Mortgage Loan specifically identified in such certification as not covered by
such certification), the documents described in Section 2.01(g)(i) and, in the
case of each Mortgage Loan that is not a MERS Mortgage Loan, the documents
described in
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Section 2.01(g)(iii), with respect to such Subsequent Mortgage Loan are
in its 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 Subsequent Mortgage Loan.
The Trustee agrees to execute and deliver within 30 days after the
Subsequent Transfer 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 Subsequent Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Subsequent Mortgage Loan paid in full or any Subsequent
Mortgage Loan specifically identified in such certification as not covered by
such certification), all documents required to be delivered to it pursuant to
this Agreement with respect to such Subsequent Mortgage Loan are in its
possession (except those described in Section 2.01(g)(vi)) and based on its
review and examination and only as to the foregoing documents, (i) such
documents appear regular on their face and relate to such Subsequent Mortgage
Loan, and (ii) the information set forth in items (i), (iv), (v), (vi), (viii)
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 Subsequent Transfer 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 Subsequent Mortgage Loans substantially in the form annexed
hereto as Exhibit G-3, with any applicable exceptions noted thereon, together
with a Subsequent Certification substantially in the form annexed hereto as
Exhibit G-4. 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 Subsequent Transfer Date, the Trustee
shall deliver to the Depositor, the Master Servicer, the Seller and to any
Certificateholder that so requests a Final Certification with respect to the
Subsequent 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 Subsequent 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 Subsequent Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case of each
Subsequent Mortgage Loan that is a MERS Mortgage Loan, the original
Mortgage, noting the
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presence of the MIN of the Subsequent Mortgage Loan and language indicating that
the Subsequent Mortgage Loan is a MOM Loan if the Subsequent 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 Subsequent 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 Subsequent 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 Subsequent 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 Subsequent 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 Subsequent 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
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hereto. If pursuant to the foregoing provisions the Seller repurchases a
Subsequent 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, pursuant to Section 2.02(b)(A) or (B)
respectively, 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 Initial
Mortgage Loans, and the related Subsequent Transfer Date with respect to the
Subsequent Mortgage Loans:
(i) The Master Servicer is duly organized as a Texas limited
partnership and is validly existing and in good standing under the laws of
the State of Texas and is duly authorized and qualified to transact any and
all business contemplated by this Agreement to be conducted by the Master
Servicer in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan, to service the Mortgage Loans in accordance with the terms
of this Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(ii) The Master Servicer has the full partnership power and authority
to sell and service each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized by all necessary corporate action on
the part of the Master Servicer the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes a
legal, valid and binding obligation of the Master Servicer, enforceable
against the Master Servicer in accordance with its terms, except that (a)
the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific
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performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the Master
Servicer, the servicing of the Mortgage Loans by the Master Servicer under
this Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance with
the terms hereof are in the ordinary course of business of the Master
Servicer and will not (A) result in a material breach of any term or
provision of the certificate of limited partnership, partnership agreement
or other organizational document of the Master Servicer or (B) materially
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to which the Master Servicer is a party or by which
it may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to the Master Servicer of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not in
breach or violation of any material indenture or other material agreement
or instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair the
Master Servicer's ability to perform or meet any of its obligations under
this Agreement.
(iv) The Master Servicer is an approved servicer of conventional
mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac and is a mortgagee approved by
the Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act.
(v) No litigation is pending or, to the best of the Master Servicer's
knowledge, threatened, against the Master Servicer that would materially
and adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Master Servicer to service the Mortgage
Loans or to perform any of its other obligations under this Agreement in
accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master Servicer
with, this Agreement or any Subsequent Transfer Agreement or the
consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, the Master Servicer
has obtained the same.
(vii) The Master Servicer is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans for as long as such
Mortgage Loans are registered with MERS.
(b) The Seller hereby represents and warrants to the Depositor and the
Trustee as follows, as of the Initial Cut-off Date in the case of the Initial
Mortgage Loans and as of the
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related Subsequent Cut-off Date in the case of the Subsequent Mortgage Loans
(unless otherwise indicated or the context otherwise requires, percentages with
respect to the Initial Mortgage Loans are measured by the Initial Cut-off Date
Principal Balance):
(i) The Seller is duly organized as a New York corporation and is
validly existing and in good standing under the laws of the State of New
York and is duly authorized and qualified to transact any and all business
contemplated by this Agreement and each Subsequent Transfer 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 each Subsequent Transfer Agreement and to
perform any of its other obligations under this Agreement and each
Subsequent Transfer Agreement in accordance with the terms hereof.
(ii) The Seller has the full corporate power and authority to sell
each Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and each
Subsequent Transfer 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 each Subsequent Transfer Agreement; and
this Agreement and each Subsequent Transfer Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except that
(a) the enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefor may
be brought.
(iii) The execution and delivery of this Agreement and each Subsequent
Transfer Agreement by the Seller, the sale of the Mortgage Loans by the
Seller under this Agreement and each Subsequent Transfer Agreement, the
consummation of any other of the transactions contemplated by this
Agreement and each Subsequent Transfer Agreement, and the fulfillment of or
compliance with the terms hereof and thereof are in the ordinary course of
business of the Seller and will not (A) result in a material breach of any
term or provision of the charter or by-laws of the Seller or (B) materially
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to which the Seller is a party or by which it may
be bound, or (C) constitute a material violation of any statute, order or
regulation applicable to the Seller of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Seller; and the Seller is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Seller's ability to perform or meet any
of its obligations under this Agreement and each Subsequent Transfer
Agreement.
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(iv) The Seller is an approved seller of conventional mortgage loans
for Xxxxxx Mae or Xxxxxxx Mac and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(v) No litigation is pending or, to the best of the Seller's
knowledge, threatened, against the Seller that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement and each Subsequent Transfer Agreement or the ability of the
Seller to sell the Mortgage Loans or to perform any of its other
obligations under this Agreement and each Subsequent Transfer Agreement in
accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement and each Subsequent Transfer Agreement or the consummation of the
transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Seller has obtained the same.
(vii) The information set forth on Exhibit F-1 hereto with respect to
each Initial Mortgage Loan is true and correct in all material respects as
of the Closing Date.
(viii) The Seller will treat the transfer of the Mortgage Loans to the
Depositor as a sale of the Mortgage Loans for all tax, accounting and
regulatory purposes.
(ix) None of the Initial Mortgage Loans are more than 60 days
delinquent in payment of principal and interest.
(x) No Mortgage Loan that is an Initial Mortgage Loan secured by a
first lien on the related Mortgaged Property had a Loan-to-Value Ratio at
origination in excess of 100%; and no Mortgage Loan that is an Initial
Mortgage Loan secured by a second lien on the related Mortgaged Property
had a Combined Loan-to-Value Ratio at origination in excess of 100%.
(xi) Each Mortgage Loan is secured by a valid and enforceable first or
second lien on the related Mortgaged Property , subject only to (1) the
lien of non-delinquent current real property taxes and assessments, (2)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal made in
connection with the origination of the related Mortgage Loan, (3) other
matters to which like properties are commonly subject that do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage and (4) only in the case of each Mortgage Loan
which is secured by a valid and enforceable second lien on the Mortgaged
Property, any senior mortgage loan secured by such Mortgaged Property and
identified in the Mortgage File related to such Mortgage Loan.
Approximately 94.20% of the Mortgage Loans that are Initial Mortgage Loans
are first liens. Approximately 5.80% of the Mortgage Loans that are Initial
Mortgage Loans were secured by second liens on the related Mortgaged
Properties.
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(xii) Immediately prior to the assignment of each Mortgage Loan to the
Depositor, the Seller had good title to, and was the sole owner of, such
Mortgage Loan free and clear of any pledge, lien, encumbrance or security
interest and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and assign
the same pursuant to this Agreement and each Subsequent Transfer Agreement.
(xiii) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(xiv) There is no valid offset, claim, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay
the unpaid principal of or interest on such Mortgage Note.
(xv) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property that are or may be a lien prior
to, or equal with, the lien of such Mortgage, except those that are insured
against by the title insurance policy referred to in item (xix) below.
(xvi) As of the Closing Date in the case of the Initial Mortgage Loans
and as of the related Subsequent Transfer Date in the case of the
Subsequent Mortgage Loans, to the best of the Seller's knowledge, each
Mortgaged Property is free of material damage and is in good repair.
(xvii) To the best of the Seller's knowledge, the Mortgage Loans
complied at origination in all material respects with applicable state and
federal laws, including, without limitation, usury, equal credit
opportunity, real estate settlement procedures, truth-in-lending and
disclosure laws, and consummation of the transactions contemplated hereby
will not involve the violation of any such laws.
(xviii) As of the Closing Date in the case of the Initial Mortgage
Loans and as of the related Subsequent Transfer Date in the case of the
Subsequent Mortgage Loans, neither the Seller nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that a
Mortgage Loan may have been modified by a written instrument that has been
recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and the original or a copy of which has
been delivered to the Trustee); satisfied, cancelled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property in
whole or in part from the lien of such Mortgage; or executed any instrument
of release, cancellation, modification (except as expressly permitted
above) or satisfaction with respect thereto.
(xix) A lender's policy of title insurance together with a condominium
endorsement and extended coverage endorsement, if applicable, in an amount
at least equal to the Cut-off Date Stated Principal Balance of each such
Mortgage Loan or a commitment (binder) to issue the same was effective on
the date of the origination of each Mortgage Loan, each such policy is
valid and remains in full force and effect, and each such policy was issued
by a title insurer qualified to do business in the jurisdiction
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where the Mortgaged Property is located and acceptable to Xxxxxx Xxx or
Xxxxxxx Mac and is in a form acceptable to Xxxxxx Xxx or Xxxxxxx Mac, which
policy insures the Seller and successor owners of indebtedness secured by
the insured Mortgage, as to the first priority lien, of the Mortgage
subject to the exceptions set forth in paragraph (iv) above; to the best of
the Seller's knowledge, no claims have been made under such mortgage title
insurance policy and no prior holder of the related Mortgage, including the
Seller, has done, by act or omission, anything that would impair the
coverage of such mortgage title insurance policy.
(xx) No Initial Mortgage Loan was the subject of a Principal
Prepayment in full between the Closing Date and the Initial Cut-off Date.
No Subsequent Mortgage Loan was the subject of a Principal Prepayment in
full between the Subsequent Transfer Date and the Subsequent Cut-off Date.
(xxi) To the best of the Seller's knowledge, all of the improvements
that were included for the purpose of determining the Appraised Value of
the Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon the Mortgaged Property.
(xxii) To the best of the Seller's knowledge, no improvement located
on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of the Seller's knowledge,
all inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been
made or obtained from the appropriate authorities, unless the lack thereof
would not have a material adverse effect on the value of such Mortgaged
Property, and the Mortgaged Property is lawfully occupied under applicable
law.
(xxiii) The Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law, except
that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought. To the best of the Seller's knowledge, all parties
to the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have
been duly and properly executed by such parties.
(xxiv) The proceeds of the Mortgage Loan have been fully disbursed,
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvements and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making, or closing or recording
the Mortgage Loans were paid.
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(xxv) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits
of the security, including, (i) in the case of a Mortgage designated as a
deed of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure.
(xxvi) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage,
and no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(xxvii) Each Mortgage Note and each Mortgage is in substantially one
of the forms attached hereto as Exhibit P acceptable in form to Xxxxxx Mae
or Xxxxxxx Mac.
(xxviii) There exist no deficiencies with respect to escrow deposits
and payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or payments of
other charges or payments due the Seller have been capitalized under the
Mortgage or the related Mortgage Note.
(xxix) The origination, underwriting and collection practices used by
the Seller with respect to each Mortgage Loan have been in all respects
legal, prudent and customary in the mortgage lending and servicing
business.
(xxx) There is no pledged account or other security other than real
estate securing the Mortgagor's obligations.
(xxxi) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature.
(xxxii) Each Mortgage Loan contains a customary "due on sale" clause.
(xxxiii) No more than approximately 4.40% of the Initial Mortgage
Loans are secured by two- to four-family dwellings. No more than
approximately 5.60% of the Initial Mortgage Loans are secured by low rise
condominium units. No more than 1.30% of the Initial Mortgage Loans are
secured by high rise condominiums units. No less than approximately 68.50%
of the Initial Mortgage Loans are secured by single family detached
dwellings. No more than approximately 6.10% of the Initial Mortgage Loans
are secured by manufactured housing. No more than approximately 23.70% of
the Initial Mortgage Loans are secured by PUDs.
(xxxiv) No Initial Mortgage Loan had a principal balance in excess of
$717,500.00 at origination.
(xxxv) [Reserved];
(xxxvi) Each Initial Mortgage Loan was originated in or after July
1996;
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(xxxvii) Each Initial Mortgage Loan that is an Adjustable Rate
Mortgage Loan, other than a Two-Year Hybrid Mortgage Loan or Three-Year
Hybrid Mortgage Loan, had an initial Adjustment Date no later than July 1,
2002; each Two-Year Hybrid Mortgage Loan that is an Initial Mortgage Loan
had an initial Adjustment Date no later than April 1, 2004; each Three-Year
Hybrid Mortgage Loan that is an Initial Mortgage Loan had an initial
Adjustment Date no later than April 1, 2005.
(xxxviii) [Reserved]
(xxxix) Approximately 60.90% of the Initial Mortgage Loans provide
for a prepayment penalty.
(xl) [Reserved]
(xli) On the basis of representations made by the Mortgagors in
their loan applications, no more than approximately 5.70% of the Initial
Mortgage Loans are secured by investor properties, no less than
approximately 92.70% of the owner-occupied Mortgage Loans that are Initial
Mortgage Loans are secured by owner-occupied Mortgaged Properties that are
primary residences and no more than approximately 1.60% of the owner-
occupied Mortgage Loans that are Initial Mortgage Loans are secured by
owner-occupied Mortgaged Properties that are secondary residences.
(xlii) At the Cut-off Date, the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy with a
generally acceptable carrier that provides for fire and extended coverage
and coverage for such other hazards as are customary in the area where the
Mortgaged Property is located in an amount that is at least equal to the
lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan or (ii) the greater of (a) the outstanding principal balance
of the Mortgage Loan and (b) an amount such that the proceeds of such
policy shall be sufficient to prevent the Mortgagor and/or the mortgagee
from becoming a co-insurer. If the Mortgaged Property is a condominium
unit, it is included under the coverage afforded by a blanket policy for
the condominium unit. All such individual insurance policies and all flood
policies referred to in item (xliv) below contain a standard mortgagee
clause naming the Seller or the original mortgagee, and its successors in
interest, as mortgagee, and the Seller has received no notice that any
premiums due and payable thereon have not been paid; the Mortgage obligates
the Mortgagor thereunder to maintain all such insurance, including flood
insurance, at the Mortgagor's cost and expense, and upon the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to obtain and
maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
(xliii) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property with a
generally acceptable carrier in an amount representing coverage not less
than the least of (A) the original outstanding principal balance of the
Mortgage Loan, (B) the minimum
-56-
amount required to compensate for damage or loss on a replacement cost
basis, or (C) the maximum amount of insurance that is available under the
Flood Disaster Protection Act of 1973, as amended.
(xliv) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation of
the Mortgaged Property.
(xlv) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material event that, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration under the
Mortgage or the related Mortgage Note; and the Seller has not waived any
default, breach, violation or event of acceleration.
(xlvi) Each Mortgaged Property is improved by a one- to four-family
residential dwelling, including condominium units and dwelling units in
PUDs. To the best of the Seller's knowledge, no improvement to a Mortgaged
Property includes a cooperative or a mobile home or constitutes other than
real property under state law.
(xlvii) Each Mortgage Loan is being serviced by the Master Servicer.
(xlviii) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the Mortgage,
and the secured principal amount, as consolidated, bears a single interest
rate and single repayment term reflected on the Mortgage Loan Schedule. The
consolidated principal amount does not exceed the original principal amount
of the Mortgage Loan. The Mortgage Note does not permit or obligate the
Master Servicer to make future advances to the Mortgagor at the option of
the Mortgagor.
(xlix) All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents that
previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item that
remains unpaid and that has been assessed, but is not yet due and payable.
Except for (A) payments in the nature of escrow payments, and (B) interest
accruing from the date of the Mortgage Note or date of disbursement of the
Mortgage proceeds, whichever is later, to the day that precedes by one
month the Due Date of the first installment of principal and interest,
including without limitation, taxes and insurance payments, the Master
Servicer has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor, directly
or indirectly, for the payment of any amount required by the Mortgage.
(l) The Mortgage Loans originated by the Seller were underwritten in
all material respects in accordance with the Seller's underwriting guidelines
for B and C 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 B
and C quality mortgage loans.
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(li) Prior to the approval of the Mortgage Loan application, an
appraisal of the related Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the originator, who had no interest, direct or
indirect, in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan; such appraisal is in a form acceptable to
Xxxxxx Xxx and Xxxxxxx Mac.
(lii) None of the Mortgage Loans is a graduated payment mortgage loan
or a growing equity mortgage loan, and no Mortgage Loan is subject to a
buydown or similar arrangement.
(liii) The Mortgage Rates borne by the Initial Mortgage Loans as of
the Initial Cut-off Date ranged from 5.40% per annum to 18.60% per annum
and the weighted average Mortgage Rate as of the Cut-off Date was 7.60% per
annum.
(liv) [Reserved]
(lv) The Mortgage Loans were selected from among the outstanding one-
to four-family mortgage loans in the Master Servicer's portfolio at the
Closing Date or Subsequent Transfer Date, as applicable, as to which the
representations and warranties made as to the Mortgage Loans set forth in
this Section 2.03(b) can be made. No selection was made in a manner that
would adversely affect the interests of Certificateholders.
(lvi) The Gross Margins on the Adjustable Rate Mortgage Loans that are
Initial Mortgage Loans range from approximately 2.00% to 12.30% and the
weighted average Gross Margin was approximately 5.90%.
(lvii) Except for 110 Initial Mortgage Loans representing
approximately 5.05% of the Initial Mortgage Loans (by Stated Principal
Balance as of the Initial Cut-Off Date), each Initial Mortgage Loan has a
payment date on or before the Due Date in the month of the first
Distribution Date.
(lviii) The Mortgage Loans, individually and in the aggregate, conform
in all material respects to the descriptions thereof in the Prospectus
Supplement.
(lix) [Reserved]
(lx) There is no obligation on the part of the Seller under the terms
of the Mortgage or related Mortgage Note to make payments in addition to
those made by the Mortgagor.
(lxi) Any leasehold estate securing a Mortgage Loan has a term of not
less than five years in excess of the term of the related Mortgage Loan.
(lxii) [Reserved]
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(lxiii) Each Mortgage Loan represents a "qualified mortgage" within
the meaning of Section 860(a)(3) of the Code (but without regard to the
rule in Treasury Regulation ss. 1.860G-2(f)(2) that treats a defective
obligation as a qualified mortgage, or any substantially similar successor
provision) and applicable Treasury regulations promulgated thereunder.
(lxiv) No Mortgage Loan was either a "consumer credit contract" or a
"purchase money loan" as such terms are defined in 16 C.F.R. Section 433
nor is any Mortgage Loan a "mortgage" as defined in 15 U.S.C. ss. 1602(aa).
(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) or a breach of
representation and warranty with respect to Subsequent Mortgage Loan under
Section 2.01(d)(iv), 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) and with
respect to a breach of representations and warranties with respect to Subsequent
Mortgage Loan under Section 2.01(d)(iv), respectively, that within 90 days of
the earlier of the discovery by such Representing Party or receipt of written
notice by such Representing Party from any party of a breach of any
representation or warranty set forth herein made that materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, it shall
cure such breach in all material respects and, if such breach is not so cured,
shall, (i) if such 90-day period expires prior to the second anniversary of the
Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the
Trust Fund and substitute in its place a Replacement Mortgage Loan, in the
manner and subject to the conditions set forth in this Section; or (ii)
repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at the
Purchase Price in the manner set forth below; provided that any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof and any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Trustee of a
Request for Release substantially in the form of Exhibit M. Any Representing
Party liable for a breach under this Section 2.03 shall promptly reimburse the
Master Servicer and the Trustee for any expenses reasonably incurred by the
Master Servicer or the Trustee in respect of enforcing the remedies for such
breach. To enable the Master Servicer to amend the Mortgage Loan Schedule, any
Representing Party liable for a breach under this Section 2.03 shall, unless it
cures such breach in a timely fashion pursuant to this Section 2.03, promptly
notify the Master Servicer whether such 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.
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With respect to any Replacement Mortgage Loan or Loans, the
Seller delivering such Replacement Mortgage Loan shall deliver to the Trustee
for the benefit of the Certificateholders the related Mortgage Note, Mortgage
and assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to the
Distribution Date on which such proceeds are to be distributed shall not be part
of the Trust Fund and will be retained by the Seller delivering such Replacement
Loan on such Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Replacement Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such substitution, the Replacement Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the Seller delivering such
Replacement Mortgage Loan shall be deemed to have made with respect to such
Replacement Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Section 2.03(b) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Co-Trustee shall
release to the Representing Party the Mortgage File relating to such Deleted
Mortgage Loan and held for the benefit of the Certificateholders and shall
execute and deliver at the Master Servicer's direction such instruments of
transfer or assignment as have been prepared by the Master Servicer, in each
case without recourse, as shall be necessary to vest in the Seller, or its
respective designee, title to the Trustee's interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the 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 3.08 on the Determination Date for the Distribution Date in the month
following the month during which such Seller became obligated to repurchase or
replace such Mortgage Loan and upon such deposit of the Purchase Price, the
delivery of the Opinion of Counsel required by Section 2.05, if any, and the
receipt of a Request for Release in the form of Exhibit N hereto, the Co-Trustee
shall release the related Mortgage File held for the benefit of the
Certificateholders to such
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Seller, and the Trustee shall execute and deliver at such Person's direction the
related instruments of transfer or assignment prepared by such Seller, in each
case without recourse, as shall be necessary to transfer title from the Trustee
for the benefit of the Certificateholders and transfer the Trustee's interest to
such Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is
understood and agreed that the obligation under this Agreement of the Seller to
cure, repurchase or replace any Mortgage Loan as to which a breach has occurred
and is continuing shall constitute the sole remedy against the Seller respecting
such breach available to Certificateholders, the Depositor or the Trustee.
(d) The representations and warranties set forth in Section 2.03 hereof
shall survive delivery of the respective Mortgage Files to the Co-Trustee for
the benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master Servicer and
the Trustee as follows, as of the date hereof and as of each Subsequent Transfer
Date:
(i) The Depositor is duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has full power and authority (corporate and other) necessary to own or hold
its properties and to conduct its business as now conducted by it and to
enter into and perform its obligations under this Agreement and each
Subsequent Transfer Agreement.
(ii) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and each Subsequent Transfer
Agreement and has duly authorized, by all necessary corporate action on its
part, the execution, delivery and performance of this Agreement and each
Subsequent Transfer Agreement; and this Agreement and each Subsequent
Transfer 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.
(iii) The execution and delivery of this Agreement and each Subsequent
Transfer Agreement by the Depositor, the consummation of the transactions
contemplated by this Agreement and each Subsequent Transfer Agreement, and
the fulfillment of or compliance with the terms hereof and thereof are in
the ordinary course of business of the Depositor and will not (A) result in
a material breach of any term or provision of the charter or by-laws of the
Depositor or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under, the
terms of any other material agreement or instrument to which the Depositor
is a party or by which it may be bound or (C) constitute a material
violation of any statute, order or regulation applicable to the Depositor
of any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Depositor; and the Depositor is
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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 and each Subsequent Transfer
Agreement.
(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or any Subsequent Transfer Agreement or the ability of the
Depositor to perform its obligations under this Agreement or any Subsequent
Transfer Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement or any Subsequent Transfer 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 or the related Subsequent
Transfer Date, as applicable, and following the transfer of the Mortgage Loans
to it by the Seller, the Depositor had good title to the Initial Mortgage Loans
or related Subsequent Mortgage Loans, as applicable, 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
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Closing Date, as defined in sections 860F(a)(2) and 860G(d) of the Code,
respectively or (ii) cause the Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding. Any Mortgage Loan as to which
repurchase or substitution was delayed pursuant to this paragraph shall be
repurchased or the substitution therefor shall occur (subject to compliance with
Sections 2.02, 2.03 or 2.04) upon the earlier of (a) the occurrence of a default
or imminent default with respect to such loan and (b) receipt by the Trustee of
an Opinion of Counsel to the effect that such repurchase or substitution, as
applicable, will not result in the events described in clause (i) or clause (ii)
of the preceding sentence.
(b) Upon discovery by the Depositor, the Seller, the Master Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of section 860G(a)(3) of the Code, the party discovering such
fact shall promptly (and in any event within 5 Business Days of discovery) give
written notice thereof to the other parties. In connection therewith, the
Trustee shall require the Seller, at the Seller's option, to either (i)
substitute, if the conditions in Section 2.03(b) with respect to substitutions
are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan, or
(ii) repurchase the affected Mortgage Loan within 90 days of such discovery in
the same manner as it would a Mortgage Loan for a breach of representation or
warranty contained in Section 2.03. The Trustee shall reconvey to the Seller the
Mortgage Loan to be released pursuant hereto in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
Section 2.06 Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement to the best
of its ability, to the end that the interests of the Holders of the Certificates
may be adequately and effectively protected.
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.
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Section 2.08 Seller Loss Coverage Obligation.
The Seller hereby agrees that, for the benefit of the
Certificateholders, on the Business Day immediately preceding each Distribution
Date it will remit to the Trustee for deposit into the Distribution Account the
amount of any Enhancement Payment due for such Distribution Date as specified in
the remittance report delivered by the Master Servicer. The obligation of the
Seller to remit Enhancement Payments will terminate when the Seller Loss
Coverage Amount has been reduced to zero.
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ARTICLE III.
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with customary and usual
standards of practice of prudent mortgage loan lenders in the respective states
in which the Mortgaged Properties are located. In connection with such servicing
and administration, the Master Servicer shall have full power and authority,
acting alone and/or through subservicers as provided in Section 3.02 hereof,
subject to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) subject to Section 3.12(a), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that the Master Servicer shall
take no action that is inconsistent with or prejudices the interests of the
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 cause the Trust Fund to fail to qualify as a REMIC
or result in the imposition of any tax under Section 860(a) or 860(d) of the
Code, but in any case not in any manner that is a lesser standard than that
provided in the first sentence of this Section 3.01. Without limiting the
generality of the foregoing, the Master Servicer, in its own name or in the name
of the Depositor and the Trustee, is hereby authorized and empowered by the
Depositor and the Trustee, when the Master Servicer believes it appropriate in
its reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Master Servicer
to service and administer the Mortgage Loans. Upon receipt of such documents,
the Depositor and/or the Trustee shall execute such documents and deliver them
to the Master Servicer. The Master Servicer further is authorized and empowered
by the Trustee, on behalf of the Certificateholders and the Trustee, in its own
name or in the name of the Subservicer, when the Master Servicer or the
Subservicer, as the case may be, believes it appropriate in its best judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of assignment and other comparable instruments with
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respect to such assignment or re-recording of a Mortgage in the name of
MERS, solely as nominee for the Trustee and its successors and assigns.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
The Master Servicer shall deliver a list of Servicing Officers to the
Trustee by the Closing Date.
Section 3.02 Subservicing; Enforcement of the Obligations of Master
Servicer.
(a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that such
subservicing arrangement and the terms of the related subservicing agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Notwithstanding the
provisions of any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
a subservicer or reference to actions taken through a Master Servicer or
otherwise, the Master Servicer shall remain obligated and liable to the
Depositor, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from the
subservicer and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
Every subservicing agreement entered into by the Master Servicer shall contain a
provision giving the successor Master Servicer the option to terminate such
agreement in the event a successor Master Servicer is appointed. All actions of
each subservicer performed pursuant to the related subservicing agreement shall
be performed as an agent of the Master Servicer with the same force and effect
as if performed directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Master Servicer.
(c) [Reserved]
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Section 3.03 Rights of the Depositor, the Seller and the Trustee in
Respect of the Master Servicer.
None of the Trustee, the Seller or the Depositor shall have any
responsibility or liability for any action or failure to act by the Master
Servicer, and none of them is obligated to supervise the performance of the
Master Servicer hereunder or otherwise.
Section 3.04 Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of an Event of Default), the
Trustee or its designee shall thereupon assume all of the rights and obligations
of the Master Servicer hereunder arising thereafter (except that the Trustee
shall not be (i) liable for losses of the Master Servicer pursuant to Section
3.10 hereof or any acts or omissions of the predecessor Master Servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof,
(iv) responsible for expenses of the Master Servicer pursuant to Section 2.03 or
(v) deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.03 or the first paragraph of Section 6.02 hereof). If the
Master Servicer shall for any reason no longer be the Master Servicer (including
by reason of any Event of Default), the Trustee (or any other successor
servicer) may, at its option, succeed to any rights and obligations of the
Master Servicer under any subservicing agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor servicer) shall not
incur any liability or have any obligations in its capacity as servicer under a
subservicing agreement arising prior to the date of such succession unless it
expressly elects to succeed to the rights and obligations of the Master Servicer
thereunder; and the Master Servicer shall not thereby be relieved of any
liability or obligations under the subservicing agreement arising prior to the
date of such succession.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each subservicing agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
Section 3.05 Collection of Mortgage Loan Payments; Certificate
Account; Distribution Account; Pre-Funding Account;
Seller Shortfall Interest Requirement.
(a) The Master Servicer shall make reasonable efforts in accordance
with customary and usual standards of practice of prudent mortgage lenders in
the respective states in which the Mortgaged Properties are located to collect
all payments called for under the terms and provisions of the Mortgage Loans to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any related Required Insurance Policy. Consistent with the
foregoing, the Master Servicer may in its discretion (i) waive any late payment
charge or any prepayment charge or penalty interest in connection with the
prepayment of a Mortgage Loan and (ii) extend the due dates for payments due on
a Mortgage Note for a period not greater
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than 270 days. In the event of any such arrangement, the Master Servicer shall
make Advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. The Master Servicer shall
not be required to institute or join in litigation with respect to collection of
any payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) The Master Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit or cause to be deposited on
a daily basis within two Business Days of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted by
Subservicers or received by it in respect of Mortgage Loans subsequent to the
Cut-off Date (other than in respect of principal and interest due on the
Mortgage Loans before the Cut-off Date) and the following amounts required to be
deposited hereunder:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans net of
the related Servicing Fee permitted under Section 3.15, other than interest
accrued on the Mortgage Loans prior to the Cut-off Date, and the Initial
Certificate Account Deposit;
(iii) all Liquidation Proceeds, other than proceeds to be applied to
the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Master Servicer's normal servicing
procedures;
(iv) all Compensating Interest;
(v) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments;
(vi) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.10 hereof;
(vii) the Purchase Price and any Substitution Adjustment Amount;
(viii) all Advances made by the Master Servicer pursuant to Section
4.01; and
(ix) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer into
the Certificate Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of
prepayment penalties, late payment charges or assumption fees, if collected,
need not be remitted by the Master Servicer. In the event that the Master
Servicer shall remit any amount not required to be remitted and not otherwise
subject to withdrawal pursuant to Section 3.08 hereof, it may at any time
withdraw or
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direct the institution maintaining the Certificate Account, to withdraw such
amount from the Certificate Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by delivering
written notice thereof to the institution maintaining the Certificate Account,
that describes the amounts deposited in error in the Certificate Account. The
Master Servicer shall maintain adequate records with respect to all withdrawals
made pursuant to this Section. All funds deposited in the Certificate Account
shall be held in trust for the Certificateholders until withdrawn in accordance
with Section 3.08.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Master Servicer pursuant to
the second paragraph of Section 3.08(a);
(ii) any Enhancement Payment made by the Seller;
(iii) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments; and
(iv) any amounts received under the Cap Contract, including amounts,
if any, received by the Master Servicer as provided in Section 3.19.
The foregoing requirements for remittance by the Master Servicer and
deposit by the Trustee into the Distribution Account shall be exclusive. In the
event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time direct the Trustee to withdraw such amount from the
Distribution Account, any provision herein to the contrary notwithstanding. Such
direction may be accomplished by delivering a written notice to the Trustee that
describes the amounts deposited in error in the Distribution Account. All funds
deposited in the Distribution Account shall be held by the Trustee in trust for
the Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Distribution Account at the direction of the
Master Servicer.
(d) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Pre-Funding Account. On the Closing Date the Seller
shall remit the Pre-Funded Amount to the Trustee for deposit in the Pre-Funding
Account.
On each Subsequent Transfer Date, upon satisfaction of the conditions
in Section 2.01(e), the Trustee shall withdraw from the related Pre-Funding
Accounts 100% of the aggregate of the Cut-off Date Principal Balances of the
Subsequent Mortgage Loans sold to the Trustee on the Subsequent Transfer Date
and pay that amount to the order of the Seller.
No later than 1:00 p.m. Pacific time on the Business Day before the
Distribution Date following the last day of the Funding Period, the Trustee
shall (i) withdraw the Unused Pre-Funded Amount from the Pre-Funding Account,
(ii) promptly deposit such amount in the
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Distribution Account, and (iii) distribute such amount to the Certificates on
the Distribution Date pursuant to Section 4.04 .
The amount deposited in the Distribution Account pursuant to the
preceding paragraph shall be net of any investment earnings on the amounts on
deposit in the Pre-Funding Account.
No later than 1:00 p.m. Pacific time on the Business Day prior to each
of the Master Servicer Advance Dates in April, May and June 2002, the Seller
shall remit to the Master Servicer, and the Master Servicer shall deposit in the
Certificate Account, the Seller Shortfall Interest Requirement (if any) for such
Master Servicer Advance Date.
(e) Each institution that maintains the Certificate Account, the
Distribution Account or the Pre-Funding 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 Pre-Funding Account and the Carryover Reserve Fund the Business Day
immediately preceding the first Distribution Date that follows the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains such Distribution Account, the Pre-Funding Account or
the Carryover Reserve Fund, then such Permitted Investment shall mature not
later than such Distribution Date), in each case, shall not be sold or disposed
of prior to its maturity. All such Permitted Investments shall be made in the
name of the Trustee, for the benefit of the Certificateholders, except in
connection with Permitted Investments made with respect to funds in the
Carryover Reserve Fund which shall be made in the name of the Trustee, for the
benefit of the Certificateholders. In the case of (i) the Certificate Account
and the Distribution Account, all income and gain net of any losses realized
from any such investment shall be for the benefit of the Master Servicer as
servicing compensation and shall be remitted to it monthly as provided herein,
(ii) the Pre-Funding Account, all income and gain net of any losses realized
from any such investment shall be for the benefit of the Seller and shall be
remitted to the Seller as provided herein, and (iii) the Carryover Reserve Fund,
all income and gain net of any losses realized from any such investment shall be
for the benefit of the Class A-IO Certificateholders and shall be remitted to
the Class A-IO Certificateholders monthly as provided herein. The amount of any
losses incurred in the Certificate Account or the Distribution Account in
respect of any such investments shall be deposited by the Master Servicer in the
Certificate Account or paid to the Trustee for deposit into the Distribution
Account out of the Master Servicer's own funds immediately as realized. The
amount of any losses incurred in the Pre-Funding Account in respect of any such
investments shall be paid by the Seller to the Trustee for deposit into the
Pre-Funding Account out of the Seller's own funds immediately as realized. Any
losses incurred in the Carryover Reserve Fund in respect of any such investments
shall be charged against amounts on deposit in the Carryover Reserve Fund (or
such investments) immediately as realized. The Trustee shall not be liable for
the amount of any loss incurred in respect of any investment or lack of
investment of funds held in the Certificate Account, the Distribution Account,
the Pre-Funding Account or the Carryover Reserve Fund and made in accordance
with this Section 3.05.
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(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, the Pre-Funding Account or the Carryover
Reserve Fund prior to any change thereof.
Section 3.06 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
To the extent required by the related Mortgage Note, the Master
Servicer shall establish and maintain one or more accounts (each, an "Escrow
Account") and deposit and retain therein all collections from the Mortgagors (or
advances by the Master Servicer) for the payment of taxes, assessments, hazard
insurance premiums or comparable items for the account of the Mortgagors.
Nothing herein shall require the Master Servicer to compel a Mortgagor to
establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Master Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.
Section 3.07 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Master Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage Loans
and all accounts, insurance policies and other matters relating to this
Agreement, such access being afforded without charge, but only upon reasonable
request and during normal business hours at the offices of the Master Servicer
designated by it.
Upon reasonable advance notice in writing if required by federal
regulation, the Master Servicer will provide to each Certificateholder that is a
savings and loan association, bank or insurance company certain reports and
reasonable access to information and documentation regarding the Mortgage Loans
sufficient to permit such Certificateholder to comply with applicable
regulations of the OTS or other regulatory authorities with respect to
investment in the Certificates; provided that the Master Servicer shall be
entitled to be reimbursed by each such Certificateholder for actual expenses
incurred by the Master Servicer in providing such reports and access.
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Section 3.08 Permitted Withdrawals from the Certificate Account,
Distribution Account and the Carryover Reserve Fund.
(a) The Master Servicer may from time to time make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not previously paid
to or withheld by the Master Servicer), as servicing compensation in
accordance with Section 3.15, that portion of any payment of interest that
equals the Servicing Fee for the period with respect to which such interest
payment was made, and, as additional servicing compensation, those other
amounts set forth in Section 3.15;
(ii) to reimburse the Master Servicer for Advances made by it with
respect to the Mortgage Loans, such right of reimbursement pursuant to this
subclause (ii) being limited to amounts received on particular Mortgage
Loan(s) (including, for this purpose, Liquidation Proceeds) that represent
late recoveries of payments of principal and/or interest on such particular
Mortgage Loan(s) in respect of which any such Advance was made;
(iii) to pay to the Seller any Credit Comeback Excess Amount;
(iv) to reimburse the Master Servicer 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 (v)
with respect to any Mortgage Loan being limited to amounts received on
particular Mortgage Loan(s) (including, for this purpose, Liquidation
Proceeds and purchase and repurchase proceeds) that represent late
recoveries of the payments for which such advances were made pursuant to
Section 3.01 or Section 3.06;
(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;
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(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 the
Principal Remittance Amount for such Distribution Date to the extent on deposit
in the Certificate Account, and the Trustee shall deposit such amount in the
Distribution Account.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to subclauses (i), (ii), (iii),
(v), (vi) and (vii) above. Prior to making any withdrawal from the Certificate
Account pursuant to subclause (iv), the Master Servicer shall deliver to the
Trustee an Officer's Certificate of a Servicing Officer indicating the amount of
any previous Advance determined by the Master Servicer to be a Nonrecoverable
Advance and identifying the related Mortgage Loan(s), and their respective
portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account for
distribution to the Certificateholders in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn, the amount of any taxes that it
is authorized to retain pursuant to the last paragraph of Section 8.11). In
addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds in or
credited to the Distribution Account;
(ii) to pay the Co-Trustee, for payment to the Mortgage Insurer as
provided below, the Mortgage Insurance Premium;
(iii) to pay the Trustee the Trustee Fee on each Distribution Date;
(iv) to withdraw pursuant to Section 3.05 any amount deposited in the
Distribution Account and not required to be deposited therein; and
(v) to clear and terminate the Distribution Account upon termination
of the Agreement pursuant to Section 9.01 hereof.
The Co-Trustee shall pay the Mortgage Insurance Premium to the Mortgage
Insurer in accordance with the following wiring instructions: Firstar Bank, 000
X. Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, ABA #000000000 For the Account
of Mortgage Guaranty Insurance Corporation Account #112663706, Attention:
Premium Pay - 0451545690 (2002-1).
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(c) The Trustee shall withdraw funds from the Carryover Reserve Fund
for distribution to the Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the last paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Carryover Reserve Fund for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited in the
Carryover Reserve Fund and not required to be deposited therein; and
(ii) to clear and terminate the Carryover Reserve Fund upon
termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.09 [Reserved.]
Section 3.10 Maintenance of Hazard Insurance.
The Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance with extended coverage in an amount that is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
of such policy shall be sufficient to prevent the related Mortgagor and/or
mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Master Servicer shall also cause flood insurance
to be maintained on property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Master Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Master Servicer's normal servicing
procedures) shall be deposited in the Certificate Account. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose
of calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section 3.08
hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Master Servicer shall cause flood insurance to be maintained with respect to
such Mortgage Loan. Such flood insurance shall be in an amount equal to the
lesser of (i) the original principal balance of the related 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.
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Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.11(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Master Servicer shall not be deemed to be in
default under this Section 3.11(a) by reason of any transfer or assumption that
the Master Servicer reasonably believes it is restricted by law from preventing.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Master Servicer shall prepare
and deliver or cause to be prepared and delivered to the Trustee for signature
and shall direct, in writing, the Trustee to execute the assumption agreement
with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding 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
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Master Servicer shall notify the Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Co-Trustee the
original of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Master Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer as additional
servicing compensation.
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination
of Excess Proceeds and Realized Losses; Repurchase of
Certain Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
the requirements of the insurer under any Required Insurance Policy; provided
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Certificate Account pursuant to Section 3.08
hereof). The Master Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property, as contemplated in Section 3.08 hereof. If the
Master Servicer has knowledge that a Mortgaged Property that the Master Servicer
is contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Master Servicer, the Master Servicer will, prior to
acquiring the Mortgaged Property, consider such risks and only take action in
accordance with its established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders
(or the Trustee's nominee on behalf of the Certificateholders). The Trustee's
name shall be placed on the title to such REO 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
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received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Certificate Account no later than the close of business on each
Determination Date. The Master Servicer shall perform the tax reporting and
withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as
soon as practicable in a manner that maximizes the Liquidation Proceeds, but in
no event later than three years after its acquisition by the Trust Fund or, at
the expense of the Trust Fund, the Master Servicer shall request, more than 60
days prior to the day on which such three-year period would otherwise expire, an
extension of the three-year grace period. In the event the Trustee shall have
been supplied with an Opinion of Counsel (such opinion not to be an expense of
the Trustee) to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of the Trust Fund as defined in section
860F of the Code or cause the Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding, 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
Master Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.
Subject to the provisions contained in Section 3.12(d), 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
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the related Mortgage Loan, such excess shall be considered to be a
partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net
of any payment to the Master Servicer as provided above, shall be deposited in
the Certificate Account on the next succeeding Determination Date following
receipt thereof for distribution on the related Distribution Date, except that
any Excess Proceeds shall be retained by the Master Servicer as additional
servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12; second,
to reimburse the Master Servicer for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest
(to the extent no Advance has been made for such amount) on the Mortgage Loan or
related REO Property, at the Net Mortgage Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Mortgage Loan.
(b) On each Determination Date, the Master Servicer shall determine the
respective aggregate amounts of Excess Proceeds and Realized Losses, if any, for
the related Prepayment Period.
(c) The Master Servicer, in its sole discretion, shall have the right
to elect (by written notice sent to the Trustee) to purchase for its own account
from the Trust Fund any Mortgage Loan that is 150 days or more delinquent at a
price equal to the Purchase Price; provided, however, that the Master Servicer
may only exercise this right on or before the last day of the calendar month in
which such Mortgage Loan became 150 days delinquent (such month, the "Eligible
Repurchase Month"); provided further, that any such Mortgage Loan which becomes
current but thereafter becomes delinquent may be purchased by the Master
Servicer pursuant to this Section in any ensuing Eligible Repurchase Month. The
Purchase Price for any Mortgage Loan purchased hereunder shall be delivered to
the Trustee for deposit in the Certificate Account and the Trustee, upon receipt
of such deposit and a Request for Release from the Master Servicer in the form
of Exhibit N hereto, shall release or cause to be released to the purchaser of
such Mortgage Loan the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the purchaser of such Mortgage
Loan, in each case without recourse, as shall be necessary to vest in the
purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and
the purchaser of such Mortgage Loan shall succeed to all the Trustee's right,
title and interest in and to such Mortgage Loan and all security and documents
related thereto. Such assignment shall be an assignment outright and not for
security. The purchaser of such Mortgage Loan shall thereupon own such Mortgage
Loan, and all security and documents, free of any further obligation to the
Trustee or the Certificateholders with respect thereto.
(d) Notwithstanding the other provisions of this Section 3.12, if any
Mortgage Loan that is more than 59 days Delinquent as of the Closing Date
(hereafter a "Foreclosure Restricted Mortgage Loan") comes into and continues in
default, the Master Servicer will
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nevertheless not complete foreclosure upon, accept a deed in-lieu of foreclosure
of, or otherwise comparably convert the ownership of any property securing such
Foreclosure Restricted Mortgage Loan (hereafter, "Foreclosure Restricted
Property") if the value of such Foreclosure Restricted Property (measured in all
cases as the outstanding principal balance of the Foreclosure Restricted
Mortgage Loan plus accrued interest), when added to the value of all other
Foreclosure Restricted Property then held as part of the Trust Fund, would
exceed 3/4 of one percent (.75%) of the aggregate Stated Principal Balance of
all Mortgage Loans then held as part of the Trust Fund. Moreover, if, as of the
next Distribution Date, the value of all Foreclosure Restricted Property held as
part of the Trust Fund will exceed one percent (1.00%) of the aggregate Stated
Principal Balance of all Mortgage Loans held as part of the Trust Fund, then
prior to such Distribution Date, the Master Servicer will sell as much
Foreclosure Restricted Property as necessary so that as of such Distribution
Date, the value of all Foreclosure Restricted Property held as part of the Trust
Fund will be less one percent (1.00%) of the aggregate Stated Principal Balance
of all Mortgage Loans held as part of the Trust Fund. For purposes of this
Section 3.12, any Mortgage Loan transferred to the Trust Fund after the Closing
Date that is more than 59 days Delinquent as of the day of such transfer will
also be a Foreclosure Restricted Mortgage Loan.
Section 3.13 Co-Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will promptly notify the
Co-Trustee by delivering a Request for Release substantially in the form of
Exhibit N. Upon receipt of such request, the Co-Trustee shall promptly release
the related Mortgage File to the Master Servicer, and the Co-Trustee shall at
the Master Servicer's direction execute and deliver to the Master Servicer the
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage in each case
provided by the Master Servicer, together with the Mortgage Note with written
evidence of cancellation thereon. The Master Servicer is authorized to cause the
removal from the registration on the MERS(R) System of such Mortgage and to
execute and deliver, on behalf of the Trust Fund and the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation or of
partial or full release. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Certificate
Account, the Distribution Account, the Carryover Reserve Fund or the related
subservicing account. From time to time and as shall be appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such purpose,
collection under any policy of flood insurance any fidelity bond or errors or
omissions policy, or for the purposes of effecting a partial release of any
Mortgaged Property from the lien of the Mortgage or the making of any
corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Co-Trustee shall, upon delivery to the
Co-Trustee of a Request for Release in the form of Exhibit M signed by a
Servicing Officer, release the Mortgage File to the Master Servicer. Subject to
the further limitations set forth below, the Master Servicer shall cause the
Mortgage File or documents so released to be returned to the Co-Trustee when the
need therefor by the Master Servicer no longer exists, unless the Mortgage Loan
is liquidated and the proceeds thereof are deposited in the Certificate Account,
in which case the Co-Trustee shall deliver the Request for Release to the Master
Servicer.
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If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Master Servicer shall deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for trustee's sale or
other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity. Notwithstanding the foregoing, the Master Servicer shall cause
possession of any Mortgage File or of the documents therein that shall have been
released by the Co-Trustee to be returned to the Co-Trustee within 21 calendar
days after possession thereof shall have been released by the Co-Trustee unless
(i) the Mortgage Loan has been liquidated and the Liquidation Proceeds relating
to the Mortgage Loan have been deposited in the Certificate Account, and the
Master Servicer shall have delivered to the Co-Trustee a Request for Release in
the form of Exhibit N or (ii) the Mortgage File or document shall have been
delivered to an attorney or to a public trustee or other public official as
required by law for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property and the Master
Servicer shall have delivered to the Trustee an Officer's Certificate of a
Servicing Officer certifying as to the name and address of the Person to which
the Mortgage File or the documents therein were delivered and the purpose or
purposes of such delivery.
Section 3.14 Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Co-Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan. All Mortgage Files and funds collected or held
by, or under the control of, the Master Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in the
Certificate Account, shall be held by the Master Servicer for and on behalf of
the Trust Fund and shall be and remain the sole and exclusive property of the
Trust Fund, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Certificate Account, Distribution
Account, or Carryover Reserve Fund or in any Escrow Account (as defined in
Section 3.06), or any funds that otherwise are or may become due or payable to
the Trustee for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of set off against any
Mortgage File or any funds collected on, or in connection with, a Mortgage Loan,
except, however, that the Master Servicer shall be entitled to set off against
and deduct from any such funds any amounts that are properly due and payable to
the Master Servicer under this Agreement.
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Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer shall
be entitled to retain or withdraw from the Certificate Account out of each
payment of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan for the period covered by such interest
payment.
Additional servicing compensation in the form of any Excess Proceeds,
prepayment penalties, assumption fees, late payment charges, Prepayment Interest
Excess, and all income and gain net of any losses realized from Permitted
Investments shall be retained by the Master Servicer to the extent not required
to be deposited in the Certificate Account pursuant to Section 3.05 or 3.12(a)
hereof. The Master Servicer shall be required to pay all expenses incurred by it
in connection with its servicing activities hereunder (including payment of any
premiums for hazard insurance, as required by Section 3.10 hereof and
maintenance of the other forms of insurance coverage required by Section 3.10
hereof) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.08 and 3.12 hereof.
Section 3.16 Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of the Certificates and
the examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Mortgage Loans required
by applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices of the Master Servicer designated by it.
Nothing in this Section shall limit the obligation of the Master Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Master Servicer to provide access as provided
in this Section as a result of such obligation shall not constitute a breach of
this Section.
Section 3.17 Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the Trustee on
or before the 120th day after the end of the Master Servicer's fiscal year,
commencing with its 2002 fiscal year, an Officer's Certificate stating, as to
the signer thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and of the performance of the Master Servicer
under this Agreement has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, the Master Servicer
has fulfilled all its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and (iii) to the best of such officer's knowledge, each Subservicer has
fulfilled all its obligations under its Subservicing Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation
specifying each such default known to such officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each Rating
Agency. Copies of such statement shall be provided by the Trustee to
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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 120th day after the end of the Master
Servicer's fiscal year, commencing with its 2002 fiscal year or (ii) within 30
days of the issuance of the annual audited financial statements beginning with
the audit for the period ending in 2002, the Master Servicer at its expense
shall cause a nationally recognized firm of independent public accountants (who
may also render other services to the Master Servicer, the Seller or any
affiliate thereof) that is a member of the American Institute of Certified
Public Accountants to furnish a report to the Trustee, Depositor and the Seller
in compliance with the Uniform Single Attestation Program for Mortgage Bankers.
Copies of such report shall be provided by the Trustee to any Certificateholder
upon request at the Master Servicer's expense, provided such report is delivered
by the Master Servicer to the Trustee. Upon written request, the Master Servicer
shall provide to the Certificateholders its publicly available annual financial
statements (or 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 Amended Confirmation And
Agreement 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 an asset of the Trust Fund but will not be an asset of any
REMIC. The Master Servicer, on behalf of the Trustee, shall deposit any amounts
received from time to time with respect to the Cap Contract into the
Distribution Account.
The Master Servicer, on behalf of the Trustee, shall prepare and
deliver any notices required to be delivered under the Cap Contract.
The Master Servicer, on behalf of the Trustee, shall act as calculation
agent and/or shall terminate the Cap Contract, in each case upon the occurrence
of certain events of default or termination events to the extent specified
thereunder. Upon any such termination, the Cap Contract Counterparty will be
obligated to pay the Trustee or the Master Servicer for the benefit of the Trust
Fund an amount in respect of such termination. Any amounts received by the
Trustee or the Master Servicer for the benefit of the Trust Fund, as the case
may be, in respect of such termination shall be deposited and held in the
Distribution Account and deposited in the Carryover Reserve Fund as necessary to
pay Net Rate Carryover for the Certificates as provided in Section 4.04(c) on
Distribution Dates following such termination to and including the Cap Contract
Termination Date. On the Cap Contract Termination Date, after all other
distributions on such date, if any such amounts in respect of early termination
remain in the Distribution Account, such amounts shall be distributed by the
Trustee to the Seller.
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ARTICLE IV.
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances.
Subject to the conditions of this Article IV, the Master Servicer, as
required below, shall make an Advance and deposit such Advance in the
Certificate Account. Each such Advance shall be remitted to the Certificate
Account no later than 1:00 p.m. Pacific time on the Master Servicer Advance Date
in immediately available funds. The Master Servicer shall be obligated to make
any such Advance only to the extent that such advance would not be a
Nonrecoverable Advance. If the Master Servicer shall have determined that it has
made a Nonrecoverable Advance or that a proposed Advance or a lesser portion of
such Advance would constitute a Nonrecoverable Advance, the Master Servicer
shall deliver (i) to the Trustee for the benefit of the Certificateholders funds
constituting the remaining portion of such Advance, if applicable, and (ii) to
the Depositor, each Rating Agency and the Trustee an Officer's Certificate
setting forth the basis for such determination.
In lieu of making all or a portion of such Advance from its own funds,
the Master Servicer may (i) cause to be made an appropriate entry in its records
relating to the Certificate Account that any Amount Held for Future
Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required to
be distributed pursuant to this Agreement. The Master Servicer shall be entitled
to be reimbursed from the Certificate Account for all Advances of its own funds
made pursuant to this Section as provided in Section 3.08. The obligation to
make Advances with respect to any Mortgage Loan shall continue until such
Mortgage Loan is paid in full or the related Mortgaged Property or related REO
Property has been liquidated or until the purchase or repurchase thereof (or
substitution therefor) from the Trustee pursuant to any applicable provision of
this Agreement, except as otherwise provided in this Section 4.01.
Section 4.02 Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Master Servicer shall, to the extent of one-half of the
Servicing Fee for such Distribution Date, deposit into the Certificate Account,
as a reduction of the Servicing Fee (but not in excess of one-half thereof) for
such Distribution Date, no later than the close of business on the Business Day
immediately preceding such Distribution Date, an amount equal to the Prepayment
Interest Shortfall; and in case of such deposit, the Master Servicer shall not
be entitled to any recovery or reimbursement from the Depositor, the Trustee,
the Seller, the Trust Fund or the Certificateholders.
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Section 4.03 [Reserved]
Section 4.04 Distributions.
(a) On each Distribution Date, the Interest Funds for such Distribution
Date shall be allocated by the Trustee from the Distribution Account in the
following order of priority (except that amounts received in respect of the Cap
Contract will be distributed as described in Section 4.04(b)):
(i) concurrently, to the Class A, Class A-R and Class A-IO
Certificates, the Current Interest and any Interest Carry Forward Amount
for each such Class; provided, however, that the Current Interest and any
Interest Carry Forward Amount payable to the Class A-IO Certificates shall
be deposited in the Carryover Reserve Fund as provided in Section 4.08 in
an amount equal to the sum of the Primary Carryover Reserve Fund Deposit
and the Secondary Carryover Reserve Fund Deposit, and any remaining amount
shall be distributed to the Class A-IO Certificates; and provided, further,
that if the Interest Funds are not sufficient to make a full distribution
of the aggregate Current Interest and the aggregate Interest Carry Forward
Amount for each Class of Certificates, such Interest Funds will be
distributed pro rata among each such Class, based on the ratio of (x) the
portion of the Current Interest and the portion of any Interest Carry
Forward Amount attributable to such Class to (y) the portion of Current
Interest and the portion of any Interest Carry Forward Amount attributable
to all such Classes;
(ii) to the Class M-1 Certificates, the Current Interest and any
Interest Carry Forward Amount for such Class;
(iii) to the Class M-2 Certificates, the Current Interest and any
Interest Carry Forward Amount for such Class;
(iv) to the Class B-1 Certificates, the Current Interest and any
Interest Carry Forward Amount for such Class;
(v) to the Class B-2 Certificates, the Current Interest and any
Interest Carry Forward Amount for such Class;
(vi) any remainder to the Class A-R Certificates.
(b) On each Distribution Date on or prior to the Cap Contract
Termination Date, amounts received in respect of the Cap Contract for such
Distribution Date will be deposited in the Carryover Reserve Fund to be
distributed to each Class of Certificates (other than the Class A-IO
Certificates) to the extent of any Interest Carryover Amount for such Class of
Certificates for such Distribution Date on a pro rata basis among all such
Classes (on the basis of the Interest Carryover Amount for each such Class), and
any remaining amounts shall be distributed to the Seller; provided, however,
that if the Cap Contract is subject to early termination, early termination
payments shall be held by the Trustee until the Cap Contract Termination Date to
pay any Interest Carryover Amounts as provided in Section 3.19.
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(c) On each Distribution Date, after the deposit in the Carryover
Reserve Fund of the amounts received on the Cap Contract as provided in Section
4.04(b) above and the Primary Carryover Reserve Fund Deposit as provided in
Section 4.04(a)(i) above, and prior to the deposit in the Carryover Reserve Fund
of the Secondary Carryover Reserve Fund Deposit as provided in Section
4.04(a)(i) above, amounts on deposit in the Carryover Reserve Fund shall be
allocated by the Trustee to each Class of Certificates (other than the Class
A-IO Certificates) to the extent of any remaining Interest Carryover Amount for
such Class of Certificates for such Distribution Date on a pro rata basis among
all such Classes (on the basis of the Interest Carryover Amount for each such
Class); provided, however, that no such amounts on deposit in the Carryover
Reserve Fund that were received in respect of the Current Interest and any
Interest Carry Forward Amounts otherwise payable to the Class A-IO Certificates
for any Distribution Date shall be used to pay any Excluded Carryover Amount.
(d) On each Distribution Date, the Principal Distribution Amount for
such Distribution Date shall be allocated by the Trustee from the Distribution
Account in the following order of priority:
(i) with respect to any Distribution Date prior to the Stepdown Date
or as to which a Trigger Event is in effect:
(A) to the Class A-R Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(B) to the Class A Certificates, until the Certificate Principal
Balance thereof is reduced to zero;
(C) to the Class M-1 Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(D) to the Class M-2 Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(E) to the Class B-1 Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(F) to the Class B-2 Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(G) any remainder to the Class A-R Certificates.
(ii) with respect to each Distribution Date on and after the Stepdown
Date and as to which a Trigger Event is not in effect:
(A) to the Class A Certificates, the Class A Principal
Distribution Amount;
(B) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount, until the Certificate Principal Balance thereof
is reduced to zero;
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(C) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount, until the Certificate Principal Balance thereof
is reduced to zero;
(D) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount, until the Certificate Principal Balance thereof
is reduced to zero;
(E) to the Class B-2 Certificates, the Class B-2 Principal
Distribution Amount, until the Certificate Principal Balance thereof
is reduced to zero; and
(F) any remainder to the Class A-R Certificates.
(e) [Reserved]
(f) To the extent that a Class of Certificates (other than the Class
A-IO Certificates) receives interest in excess of the Net Rate Cap other than
the amount of any Net Rate Carryover paid from amounts received in respect of
the Cap Contract or from amounts otherwise payable to the Class A-IO
Certificates as provided in this Agreement, such interest shall be treated as
having been paid to the Carryover Reserve Fund and then paid by the Carryover
Reserve Fund to such Certificateholders. Amounts deemed deposited to the
Carryover Reserve Fund pursuant to this clause shall be deemed to have been
distributed first to the Class A-IO Certificateholders for applicable tax
purposes.
(g) [Reserved]
(h) On each Distribution Date, the Trustee shall allocate the Applied
Realized Loss Amount to reduce the Certificate Principal Balances of the
Subordinate Certificates in the following order of priority:
(i) to the Class B-2 Certificates until the Class B-2 Certificate
Principal Balance is reduced to zero;
(ii) to the Class B-1 Certificates until the Class B-1 Certificate
Principal Balance is reduced to zero;
(iii) to the Class M-2 Certificates until the Class M-2 Certificate
Principal Balance is reduced to zero; and
(iv) to the Class M-1 Certificates until the Class M-1 Certificate
Principal Balance is reduced to zero.
Subject to Section 9.02 hereof respecting the final distribution, on
each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if (i) such Holder has so
notified the Trustee at least 5 Business Days prior to the related Record Date
and (ii) such Holder shall hold Regular Certificates with aggregate principal
denominations of not less than $1,000,000 or evidencing a Percentage Interest
aggregating 10% or more with respect to such Class or, if not, by check mailed
by first class mail to such Certificateholder at the address of
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such holder appearing in the Certificate Register. Notwithstanding the
foregoing, but subject to Section 9.02 hereof respecting the final distribution,
distributions with respect to Certificates registered in the name of a
Depository shall be made to such Depository in immediately available funds.
On or before 5:00 p.m. Pacific time on the fifth Business Day following
each Determination Date (but in no event later than 5:00 p.m. Pacific time on
the third Business Day before the related Distribution Date), the Master
Servicer shall deliver a report to the Trustee in the form of a computer
readable magnetic tape (or by such other means as the Master Servicer and the
Trustee may agree from time to time) containing such data and information as
agreed to by the Master Servicer and the Trustee (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 later than 9:00 a.m. Pacific time on the Master
Servicer Advance Date, other than any Master Servicer Advance Date relating to
any Distribution Date on which the proceeds of any Optional Termination are
being distributed, (i) furnish by telecopy a statement to the Master Servicer
(the information in such statement to be made available to Certificateholders by
the Trustee on request) setting forth the Interest Funds and Principal Funds for
such Distribution Date and the amount to be withdrawn from the Certificate
Account and (ii) determine (and notify the Master Servicer by telecopy of the
results of such determination) the amount of Advances to be made by the Master
Servicer in respect of the related Distribution Date; provided that no Advance
shall be made if it would be a Nonrecoverable Advance; provided further that any
failure by the Trustee to notify the Master Servicer will not relieve the Master
Servicer from any obligation to make any such Advances. The Trustee shall not be
responsible to recompute, recalculate or verify information provided to it by
the Master Servicer and shall be permitted to conclusively rely on any
information provided to it by the Master Servicer.
Section 4.05 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare
and cause to be forwarded by first class mail to each Holder of a Class of
Certificates of the Trust Fund, the Master Servicer, the Seller and the
Depositor a statement setting forth for the Certificates:
(i) the amount of the related distribution to Holders of each Class
allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein and (B) the aggregate of all
scheduled payments of principal included therein;
(ii) the amount of such distribution to Holders of each Class
allocable to interest;
(iii) any Interest Carry Forward Amount for each Class;
(iv) the Certificate Principal Balance of each Class after giving
effect (i) to all distributions allocable to principal on such Distribution
Date and (ii) the allocation of any Applied Realized Loss Amounts for such
Distribution Date;
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(v) the aggregate of the Stated Principal Balance of the Mortgage
Loans for the Mortgage Pool;
(vi) the related amount of the Servicing Fees paid to or retained by
the Master Servicer for the related Due Period;
(vii) the Pass-Through Rate for each Class of Certificates with
respect to the current Accrual Period;
(viii) with respect to the April, May and June 2002 Distribution
Dates, the Seller Shortfall Interest Requirement (if any) for the related
Master Servicer Advance Date;
(ix) the amount of Advances included in the distribution on such
Distribution Date;
(x) the cumulative amount of Applied Realized Loss Amounts to date;
(xi) the amount of any Enhancement Payments made with respect to such
Distribution Date;
(xii) the number and aggregate principal amounts of Mortgage Loans:
(A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1) 30 to 59
days, (2) 60 to 89 days and (3) 90 or more days, and (B) in foreclosure and
Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, in
each case as of the close of business on the last day of the calendar month
preceding such Distribution Date;
(xiii) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan;
(xiv) and the aggregate Stated Principal Balances of any Mortgage
Loans converted to REO Properties as of the close of business on the
Determination Date preceding such Distribution Date;
(xv) the aggregate Stated Principal Balances of all Liquidated Loans;
(xvi) with respect to any Liquidated Loan, the loan number and Stated
Principal Balance relating thereto;
(xvii) whether a Trigger Event has occurred;
(xviii) any Net Rate Carryover paid on each Class of Certificates
(other than the Class A-IO Certificates) and any remaining Net Rate
Carryover remaining on each Class of Certificates (other than the Class
A-IO Certificates) on such Distribution Date;
(xix) the amount of any Enhancement Payments for such Distribution
Date and the amount remaining under the Seller Loss Coverage Obligation;
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(xx) with respect to the April and May 2002 Distribution Date, (A) the
amount on deposit in the Pre-Funding Account (if any) on the related
Determination Date and (B) the aggregate Stated Principal Balances of the
Subsequent Mortgage Loans for Subsequent Transfer Dates occurring during
the related Due Period;
(xxi) with respect to the June 2002 Distribution Date, (A) the
remaining amounts in Pre-Funding Account (if any) at the end of the Funding
Period that are included in the Principal Distribution Amount and (B) the
aggregate Stated Principal Balances of the Subsequent Mortgage Loans for
Subsequent Transfer Dates occurring during the related Due Period;
(xxii) the amount, if any, received under the Cap Contract for such
Distribution Date; and
(xxiii) the amount of any Excluded Carryover Amount.
(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.xxxxxx.xxx.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(i), (a)(ii) and (a)(vi) of this Section
4.05 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class A-R Certificates the Form 1066 and each Form
1066Q and shall respond promptly to written requests made not more frequently
than quarterly by any Holder of Class A-R Certificates with respect to the
following matters:
(i) The original projected principal and interest cash flows on the
Closing Date on each related Class of regular and residual interests
created hereunder and on the Mortgage Loans, based on the Prepayment
Assumption;
(ii) The projected remaining principal and interest cash flows as of
the end of any calendar quarter with respect to each related Class of
regular and residual interests created hereunder and the Mortgage Loans,
based on the Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash
flows described above;
(iv) The original issue discount (or, in the case of the Mortgage
Loans, market discount) or premium accrued or amortized through the end of
such calendar quarter with
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respect to each related Class of regular or residual interests created
hereunder and to the Mortgage Loans, together with each constant yield to
maturity used in computing the same;
(v) The treatment of losses realized with respect to the Mortgage
Loans or the regular interests created hereunder, including the timing and
amount of any cancellation of indebtedness income of the related REMIC with
respect to such regular interests or bad debt deductions claimed with
respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of the related
REMIC; and
(vii) Any taxes (including penalties and interest) imposed on the
related REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure property" or
state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06 [Reserved]
Section 4.07 [Reserved]
Section 4.08 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Certificates, the
Carryover Reserve Fund. The Carryover Reserve Fund shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including without limitation, other
moneys held by the Trustee pursuant to this Agreement. On the Closing Date, the
Seller shall remit $10,000 to the Trustee, who shall deposit said funds in the
Carryover Reserve Fund.
(b) The Trustee shall make withdrawals from the Carryover Reserve Fund
to make distributions pursuant to Section 4.04(c) hereof.
(c) Funds in the Carryover Reserve Fund may be invested in Permitted
Investments. Any earnings on such amounts shall be payable to the Class A-IO
Certificates. The Class A-IO Certificates shall evidence ownership of the
Carryover Reserve Fund for federal tax purposes and the Holders thereof
evidencing not less than 50% of the Voting Rights of such Class shall direct the
Trustee in writing as to the investment of amounts therein. In the absence of
such written direction, all funds in the Carryover Reserve Fund shall be
invested by the Trustee in The Bank of New York cash reserves.
(d) Upon termination of the Trust Fund, any amounts remaining in the
Carryover Reserve Fund shall be distributed to the Holders of the Class A-IO
Certificates in the same manner as if distributed pursuant to Section 4.04(f)
hereof.
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Section 4.09 [Reserved]
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ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through A-6, D and E. The Certificates shall be issuable in
registered form, in the minimum dollar denominations, integral dollar multiples
in excess thereof and aggregate dollar denominations as set forth in the
following table:
Integral Original
Multiples Certificate
Minimum in Excess of Principal
Class Denomination Minimum Balance
--------------------------------- --------------------------- ------------------------- ------------------------
A $20,000 $1,000 $427,800,000
A-IO $20,000(1) $1,000(1) $460,000,000(1)
A-R $99.95(2) N/A $100
M-1 $20,000 $1,000 $8,510,000
M-2 $20,000 $1,000 $8,050,000
B-1 $20,000 $1,000 $6,900,000
B-2 $20,000 $1,000 $8,740,000
-------------------------------
(1) Notional Amount.
(2) The Tax Matters Person Certificate may be issued in a denomination of $0.05.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Trustee by manual signature, and such certificate of authentication upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.09 hereof, a Certificate Register for the Trust
Fund in which, subject to 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
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exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any Certificate, the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of Transfer or exchange shall be accompanied by a written instrument of Transfer
in form satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No Transfer of an ERISA-Restricted Certificate shall be made unless
the Trustee shall have received either (i) a representation from the transferee
of such Certificate acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code,
or a Person acting on behalf of any such plan or using the assets of any such
plan, 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 subject to ERISA, or a plan
subject to Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan, an opinion of counsel satisfactory to the Trustee and the
Master Servicer to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in a non-exempt prohibited
transaction under ERISA or the Code and will not subject the Trustee or the
Master Servicer to any obligation in addition to those expressly undertaken in
this Agreement, 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) that is a Book-Entry Certificate unless the
Trustee shall have received from the transferee an alternative representation
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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
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code
without the delivery to the Trustee and the Master Servicer of an opinion of
counsel satisfactory to the Trustee and the Master Servicer as described above
shall be void and of no effect; provided that the restriction set forth in this
sentence shall not be applicable if there has been delivered to the Trustee and
the Master Servicer an opinion of counsel meeting the requirements of clause
(iii) of the first sentence of this paragraph. 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 subject to Section 406 of ERISA or a
plan subject to Section 4975 of the Code or a Person acting on behalf of any
such plan at the time it became a Holder or, at such subsequent time as it
became such a plan or Person acting on behalf of such a plan, 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
Person acting on behalf of a plan.
(c) Each Person who has or who acquires any Ownership Interest in a
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a Class
A-R Certificate shall be a Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in its status as a Permitted
Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Class A-R Certificate unless, the
Trustee shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the form
attached hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Class A-R Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, 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.
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(iv) Any attempted or purported Transfer of any Ownership Interest in
a Class A-R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Class A-R Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Class A-R Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Class A-R
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit and Transferor Certificate.
The Trustee shall be entitled but not obligated to recover from any Holder
of a Class A-R Certificate that was in fact not a Permitted Transferee at
the time it became a Holder or, at such subsequent time as it became other
than a Permitted Transferee, all payments made on such Class A-R
Certificate at and after either such time. Any such payments so recovered
by the Trustee shall be paid and delivered by the Trustee to the last
preceding Permitted Transferee of such Certificate.
(v) The Master Servicer shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information necessary
to compute any tax imposed under Section 860E(e) of the Code as a result of
a Transfer of an Ownership Interest in a Class A-R Certificate to any
Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee, the Seller or the Master
Servicer to the effect that the elimination of such restrictions will not cause
the Trust Fund to fail to qualify as a REMIC at any time that the Certificates
are outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
ownership Interest in a Class A-R Certificate hereby consents to any amendment
of this Agreement that, based on an Opinion of Counsel furnished to the Trustee,
is reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class A-R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class A-R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 shall not be an expense of the Trust
Fund, the Trustee, the Depositor, the Seller or the Master Servicer.
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
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notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 5.03, the Trustee may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. Any replacement
Certificate issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time. All Certificates surrendered to the Trustee under the terms of this
Section 5.03 shall be canceled and destroyed by the Trustee in accordance with
its standard procedures without liability on its part.
Section 5.04 Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master Servicer
or the Trustee may treat the person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and neither
the Master Servicer, the Trustee nor any agent of the Master Servicer or the
Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor or Master Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
Section 5.06 Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in
the form of one or more typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate Owner
of such Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in Section
5.08. Unless and until definitive, fully 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;
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(b) the Depositor, the Seller, the Master Servicer and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of the
respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
Section 5.07 Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Trustee shall give all such
notices and communications to the Depository.
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
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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 0 Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust MBS Administration, as offices for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
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ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01 Respective Liabilities of the Depositor, the Master
Servicer and the Seller.
The Depositor, the Master Servicer and the Seller shall each be liable
in accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor, the Master
Servicer or the Seller.
The Depositor will keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of the
United States or under the laws of one of the states thereof and will obtain and
preserve its qualification or registration to do business as a foreign
partnership in each jurisdiction in which such qualification or registration is
or shall be necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.
Any Person into which the Depositor, the Master Servicer or the Seller
may be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, the Master Servicer or the Seller shall be
a party, or any person succeeding to the business of the Depositor, the Master
Servicer or the Seller, shall be the successor of the Depositor, the Master
Servicer or the Seller, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided that the successor or
surviving Person to the Master Servicer shall be qualified to service mortgage
loans on behalf of, Xxxxxx Xxx or Xxxxxxx Mac.
Section 6.03 Limitation on Liability of the Depositor, the Seller, the
Master Servicer and Others.
None of the Depositor, the Seller, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Master Servicer shall be under any liability to the Trustee (except as provided
in Section 8.05), the Trust Fund 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
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Servicer or any such Person from any liability that would otherwise be imposed
by reasons of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Seller, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Seller or the Master
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor, the Seller, the Master Servicer and any director, officer,
employee or agent of the Depositor, the Seller or the Master Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense related to any specific Mortgage Loan or Mortgage Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant to
this Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Seller or the Master Servicer shall be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability; provided that any of the Depositor, the
Seller or the Master Servicer may, in its discretion undertake any such action
that it may deem necessary or desirable in respect of this Agreement and the
rights and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be, expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Seller and the Master
Servicer shall be entitled to be reimbursed therefor out of the Certificate
Account as provided by Section 3.08 hereof.
Section 6.04 Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee. No such resignation shall become
effective until the Trustee or a successor servicer to such appointment shall
have assumed the Master Servicer's responsibilities, duties, liabilities and
obligations hereunder.
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall, for so long as it acts as servicer under
this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Xxxxxx Xxx or Xxxxxxx Mac for
persons performing servicing for mortgage loans purchased by Xxxxxx Mae or
Xxxxxxx Mac. In the event that any such policy or bond ceases to be in effect,
the Master Servicer shall use its reasonable best efforts to obtain a comparable
replacement policy or bond from an insurer or issuer, meeting the requirements
set forth above as of the date of such replacement.
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ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit in the Certificate
Account or the Distribution Account or remit to the Trustee any payment
(excluding a payment required to be made under Section 4.01 hereof)
required to be made under the terms of this Agreement, which failure shall
continue unremedied for five calendar days and, with respect to a payment
required to be made under Section 4.01 hereof, for one calendar day, after
the date on which written notice of such failure shall have been given to
the Master Servicer by the Trustee or the Depositor, or to the Trustee and
the Master Servicer by the Holders of Certificates evidencing not less than
25% of the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Master Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Master Servicer contained in this Agreement or any representation or
warranty shall prove to be untrue, which failure or breach shall continue
unremedied for a period of 60 days after the date on which written notice
of such failure shall have been given to the Master Servicer by the Trustee
or the Depositor, or to the Trustee by the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the
Certificates; provided that the sixty-day cure period shall not apply to
the initial delivery of the Mortgage File for Delay Delivery Mortgage Loans
nor the failure to repurchase or substitute in lieu thereof; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force undischarged
or unstayed for a period of 60 consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the
Master Servicer or all or substantially all of the property of the Master
Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations.
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
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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 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 Xxx and Xxxxxxx Mac approved
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seller/servicer in good standing, that has a net worth of at least $15,000,000,
and that is willing to service the Mortgage Loans and executes and delivers to
the Depositor and the Trustee an agreement accepting such delegation and
assignment, that contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer
(other than liabilities of the Master Servicer under Section 6.03 hereof
incurred prior to termination of the Master Servicer under Section 7.01), with
like effect as if originally named as a party to this Agreement; and provided
further that each Rating Agency acknowledges that its rating of the Certificates
in effect immediately prior to such assignment and delegation will not be
qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to the Master Servicer hereunder shall be effective
until the Trustee shall have consented thereto, and written notice of such
proposed appointment shall have been provided by the Trustee to each
Certificateholder. The Trustee shall not resign as servicer until a successor
servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee, unless
the Trustee is prohibited by law from so acting, shall, subject to Section 3.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided that no such compensation shall be in excess of
that permitted the Master Servicer hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Trustee nor any other successor
servicer shall be deemed to be in default hereunder by reason of any failure to
make, or any delay in making, any distribution hereunder or any portion thereof
or any failure to perform, or any delay in performing, any duties or
responsibilities hereunder, in either case caused by the failure of the Master
Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.
Any successor to the Master Servicer as servicer shall give notice to
the Mortgagors of such change of servicer and shall, during the term of its
service as servicer maintain in force the policy or policies that the Master
Servicer is required to maintain pursuant to Section 6.05.
In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the successor
Master Servicer in causing MERS to execute and deliver an assignment of Mortgage
in recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS(R) System to the successor Master
Servicer. The predecessor Master Servicer shall file or cause to be filed any
such assignment in the appropriate recording office. The successor Master
Servicer shall cause such assignment to be delivered to the Trustee or the
Custodian promptly upon receipt of the original with evidence of recording
thereon or a copy certified by the public recording office in which such
assignment was recorded.
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Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
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ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee (or the Co-Trustee, to the extent provided in this Agreement) that are
specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether they conform to the
requirements of this Agreement, to the extent provided in this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:
(i) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable, individually
or as Trustee, except for the performance of such duties and obligations as
are specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement that it reasonably believed in good faith to be genuine and
to have been duly executed by the proper authorities respecting any matters
arising hereunder;
(ii) the Trustee shall not be liable, individually or as Trustee, for
an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless the Trustee was grossly
negligent or acted in bad faith or with willful misfeasance; and
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(iii) the Trustee shall not be liable, individually or as Trustee,
with respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of each Class of
Certificates evidencing not less than 25% of the Voting Rights of such
Class relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable, individually or as Trustee, for
any action taken, suffered or omitted by it in good faith and believed by
it to be authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
(iv) prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default that may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by Holders of each
Class of Certificates evidencing not less than 25% of the Voting Rights of
such Class;
(v) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys;
(vi) the Trustee shall not be required to expend its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such liability is not
assured to it;
(vii) the Trustee shall not be liable, individually or as Trustee, for
any loss on any investment of funds pursuant to this Agreement (other than
as issuer of the investment security);
(viii) the Trustee shall not be deemed to have knowledge of an Event
of Default until a Responsible Officer of the Trustee shall have received
written notice thereof; and
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(ix) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
Section 8.03 Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the Master Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of any Mortgage Loan or related
document or of MERS or the MERS(R) System other than with respect to the
Trustee's execution and authentication of the Certificates. The Trustee shall
not be accountable for the use or application by the Depositor or the Master
Servicer of any funds paid to the Depositor or the Master Servicer in respect of
the Mortgage Loans or deposited in or withdrawn from the Certificate Account by
the Depositor or the Master Servicer.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must engage
persons not regularly in its employ to perform acts or services on behalf of the
Trust Fund, which acts or services are not in the ordinary course of the duties
of a trustee, paying agent or certificate registrar, in the absence of a breach
or default by any party hereto, the reasonable compensation, expenses and
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
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duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or by reason of reckless disregard of the Trustee's
obligations and duties hereunder and (ii) resulting from any error in any tax or
information return prepared by the Master Servicer. Such indemnity shall survive
the termination of this Agreement or the resignation or removal of the Trustee
hereunder.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Seller and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.
Section 8.07 Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor and
the Master Servicer and by mailing notice of resignation by first class mail,
postage prepaid, to the Certificateholders at their addresses appearing on the
Certificate Register and each Rating Agency, not less than 60 days before the
date specified in such notice when, subject to Section 8.08, such resignation is
to take effect, and (2) acceptance of appointment by a successor trustee in
accordance with Section 8.08 and meeting the qualifications set forth in Section
8.06. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such 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
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Fund by any state in which the Trustee or the Trust Fund is located, (B) the
imposition of such tax would be avoided by the appointment of a different
trustee and (C) the Trustee fails to indemnify the Trust Fund against such tax,
then the Depositor or the Master Servicer may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which
instrument shall be delivered to the Trustee, one copy of which shall be
delivered to the Master Servicer and one copy of which shall be delivered to the
successor trustee.
The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor Trustee to the Master Servicer
one complete set to the Trustee so removed and one complete set to the successor
so appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the Successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
Section 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor, its predecessor trustee
and the Master Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all 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
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Section 8.06 hereof without the execution or filing of any paper or further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 8.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this
Agreement to advance funds on behalf of the Master Servicer, shall be
conferred or imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately without
the Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this
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Agreement and the conditions of this Article VIII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that the Upper Tier REMIC and
the Lower Tier REMIC qualify as, a "real estate mortgage investment conduit" as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Trustee covenants and agrees that it shall act as agent (and the
Trustee is hereby appointed to act as agent) on behalf of the Trust Fund and
that in such capacity it shall: (a) prepare and file, or cause to be prepared
and filed, in a timely manner, a U.S. Real Estate Mortgage Investment Conduit
Income Tax Returns (Form 1066 or any successor form adopted by the Internal
Revenue Service) and prepare and file or cause to be prepared and filed with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to each REMIC
created hereunder containing such information and at the times and in the manner
as may be required by the Code or state or local tax laws, regulations, or
rules, and furnish or cause to be furnished to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby; (b) within thirty days of the Closing Date, furnish or cause to be
furnished to the Internal Revenue Service, on Forms 8811 or as otherwise may be
required by the Code, the name, title, address, and telephone number of the
person that the Holders of the Certificates may contact for tax information
relating thereto, together with such additional information as may be required
by such Form, and update such information at the time or times in the manner
required by the Code for the Trust Fund; (c) make or cause to be made elections,
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
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liable for such tax); (f) to the extent that they are under its control conduct
the affairs of the Trust Fund at all times that any Certificates are outstanding
so as to maintain the status of each REMIC created hereunder as a REMIC under
the REMIC Provisions; (g) not knowingly or intentionally take any action or omit
to take any action that would cause the termination of the REMIC status of any
REMIC created hereunder; (h) pay, from the sources specified in the last
paragraph of this Section 8.11, the amount of any federal, state and local
taxes, including prohibited transaction taxes as described below, imposed on any
REMIC created hereunder prior to the termination of the Trust Fund when and as
the same shall be due and payable (but such obligation shall not prevent the
Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (i) sign or cause to be signed federal, state or local income tax
or information returns; (j) maintain records relating to each REMIC created
hereunder, including but not limited to the income, expenses, assets and
liabilities of each such REMIC, and the fair market value and adjusted basis of
the Trust Fund property determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and (k) as and when necessary and appropriate,
represent the Trust Fund in any administrative or judicial proceedings relating
to an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any REMIC created hereunder,
enter into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of the Trust Fund, and otherwise
act on behalf of any REMIC created hereunder in relation to any tax matter
involving any such REMIC.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.
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
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cases, or in the event that any liable party here fails to honor its obligations
under the preceding clauses (i) or (ii), any such tax will be paid first with
amounts otherwise to be distributed to the Class A-R Certificateholders , and
second with amounts otherwise to be distributed to all other Certificateholders
in the following order of priority: first, to the Class B-2 Certificates (pro
rata), second, to the Class B-1 Certificates (pro rata), third, to the Class M-2
Certificates (pro rata), fourth, to the Class M-1 Certificates (pro rata), and
fifth, to the Class A-R Certificates and the Class A Certificates (pro rata).
Notwithstanding anything to the contrary contained herein, to the extent that
such tax is payable by the Class A-R Certificates, the Trustee is hereby
authorized to retain on any Distribution Date, from the Holders of the Class A-R
Certificates (and, if necessary, second, from the Holders of the all other
Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
The Trustee agrees to promptly notify in writing the party liable for any such
tax of the amount thereof and the due date for the payment thereof.
The Trustee shall treat the Carryover Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation 1.860G-2(h) that is owned
by the Class A-IO Certificateholders and the Seller, and that is not an asset of
the REMIC. The Trustee shall treat the rights of the Class A, Class M-1, Class
M-2, Class B-1 and Class B-2 Certificateholders to receive payments from the
Carryover Reserve Fund as rights in an interest rate cap contract written by the
Cap Contract Counterparty with respect to the Net Rate Carryover funded by the
Cap Contract, and written by the Class A-IO Certificateholder with respect to
the Net Rate Carryover funded by the Primary Carryover Reserve Fund Deposit and
the Secondary Carryover Reserve Fund Deposit, in favor of the other
Certificateholders. Thus, each Certificate other than the Class A-IO shall be
treated as representing ownership of not only REMIC UT Regular Interests, but
also ownership of an interest in an interest rate cap contract. For purposes of
determining the issue price of the REMIC 2 Regular interests, the Trustee shall
assume that the interest rate cap contract has a value of $10,000.
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.
(b) No provision of this Agreement shall be construed to relieve the
Co-Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:
(i) the duties and obligations of the Co-Trustee shall be determined
solely by the express provisions of this Agreement with the exception of
Section 8.10, the Co-Trustee shall not be liable, individually or as
Co-Trustee, except for the performance of
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such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Co-Trustee and the Co-Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the Co-
Trustee and conforming to the requirements of this Agreement that it
reasonably believed in good faith to be genuine and to have been duly
executed by the proper authorities respecting any matters arising
hereunder; and
(ii) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless the Co-Trustee was
grossly negligent or acted in bad faith or with willful misfeasance.
(c) Except as otherwise provided in paragraph (b) above:
(i) the Co-Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) the Co-Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such Opinion of Counsel;
(iii) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) the Co-Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document;
(v) the Co-Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys; and
(vi) the Co-Trustee shall not be required to expend its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such liability is not
assured to it.
(d) The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer, as the case may be, and the Co-Trustee
assumes no responsibility for their correctness. The Co-Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Co-Trustee's execution and authentication of
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the Certificates. The Co-Trustee shall not be accountable for the use or
application by the Depositor or the Master Servicer of any funds paid to the
Depositor or the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Certificate Account by the Depositor or the Master
Servicer.
(e) The Co-Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Co-Trustee.
(f) The Master Servicer covenants and agrees (i) to pay to the
Co-Trustee from time to time, and the Co-Trustee shall be entitled to, such
compensation as shall be agreed in writing by the Master Servicer and the
Co-Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Co-Trustee and (ii)
to pay or reimburse the Co-Trustee, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Co-Trustee on
behalf of the Trust Fund in accordance with any of the provisions of this
Agreement (including, without limitation: (A) the reasonable compensation and
the expenses and disbursements of its counsel, but only for representation of
the Co-Trustee acting in its capacity as Co-Trustee hereunder and (B) to the
extent that the Co-Trustee must engage persons not regularly in its employ to
perform acts or services on behalf of the Trust Fund, which acts or 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
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provisions of this Section 8.12, the Co-Trustee shall resign immediately in
the manner and with the effect specified in paragraph (h) below. The corporation
or national banking association serving as Co-Trustee may have normal banking
and trust relationships with the Depositor, the Seller and the Master Servicer
and their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.
(h) The Co-Trustee may at any time resign and be discharged from the
trusts hereby created by giving 30 days prior written notice of resignation to
the Trustee, the Depositor and the Master Servicer. Upon such resignation the
Trustee (x) may appoint a successor Co-Trustee meeting the requirements in
paragraph (g) above and acceptable to the Master Servicer (in its sole
discretion), so long as such Co-Trustee executes and delivers to the other
parties hereto an instrument agreeing to be bound by the provisions of this
Agreement or (y) may if permitted by the Master Servicer (in its sole
discretion) assume the rights and duties of the resigning Co-Trustee so long as
the Trustee executes and delivers an instrument to that effect.
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ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans.
Subject to Section 9.03, the Trust Fund shall terminate and the
obligations and responsibilities of the Depositor, the Master Servicer, the
Seller and the Trustee created hereby shall terminate upon the earlier of (a)
the repurchase by the Master Servicer of all of the Mortgage Loans (and REO
Properties) remaining in the Trust Fund at the price equal to the sum of (i)
100% of the Stated Principal Balance of each Mortgage Loan in the Trust Fund
(other than in respect of REO Property), (ii) accrued interest thereon at the
applicable Net Mortgage Rate, (iii) the appraised value of any REO Property in
the Trust Fund (up to the Stated Principal Balance of the related Mortgage
Loan), such appraisal to be conducted by an appraiser mutually agreed upon by
the Master Servicer and the Trustee and (iv) any unreimbursed Servicing
Advances, and the principal portion of any unreimbursed Advances, made on the
Mortgage Loans prior to the exercise of such repurchase and (b) the later of (i)
the maturity or other liquidation (or any Advance with respect thereto) of the
last Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to related Certificateholders of all amounts
required to be distributed to them pursuant to this Agreement, as applicable. In
no event shall the trusts created hereby continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof and (ii) the Latest Possible Maturity Date.
The Master Servicer shall have the right to repurchase all Mortgage
Loans and REO Properties in the Trust Fund pursuant to clause (a) in the
preceding paragraph only on or after the date on which the Master Servicer
determines that the customary and reasonable costs and expenses incurred in the
performance of the Master Servicer of its servicing obligations hereunder exceed
the benefits accruing to the Master Servicer; provided, however, that in no
event shall the Master Servicer exercise its right to repurchase all Mortgage
Loans and REO Properties in the Trust Fund pursuant to clause (a) in the
preceding paragraph of this Section 9.01 before the date on which the Stated
Principal Balance of the Mortgage Loans, at the time of any such repurchase, is
less than or equal to ten percent (10%) of the sum of the Stated Principal
Balance of the Initial Mortgage Loans as of the Initial Cut-off Date plus the
Pre-Funded Amount.
Section 9.02 Final Distribution on the Certificates.
If on any Determination Date, (i) the Master Servicer determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, the Master Servicer
shall direct the Trustee to send a final distribution notice promptly to each
Certificateholder or (ii) the Trustee determines that a Class of Certificates
shall be retired after a final distribution on such Class, the Trustee shall
notify the related Certificateholders within five (5) Business Days after such
Determination Date that the final distribution in retirement of such Class of
Certificates is scheduled to be made on the
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immediately following Distribution Date. Any final distribution made pursuant to
the immediately preceding sentence will be made only upon presentation and
surrender of the related Certificates at the Corporate Trust Office of the
Trustee. If the Master Servicer elects to terminate the Trust Fund pursuant to
clause (a) of Section 9.01, at least 20 days prior to the date notice is to be
mailed to the Certificateholders, such electing party shall notify the Depositor
and the Trustee of the date such electing party intends to terminate the Trust
Fund and of the applicable repurchase price of the related Mortgage Loans and
REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which related Certificateholders may surrender their
Certificates for payment of the final distribution and cancellation, shall be
given promptly by the Trustee by letter to related Certificateholders mailed not
earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on related
Certificates will be made upon presentation and surrender of such Certificates
at the office therein designated, (b) the amount of such final distribution, (c)
the location of the office or agency at which such presentation and surrender
must be made, and (d) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of such Certificates at the office therein specified.
The Master Servicer will give such notice to each Rating Agency at the time such
notice is given to the affected Certificateholders.
In the event such notice is given, the Master Servicer shall cause all
funds in the Certificate Account to be remitted to the Trustee for deposit in
the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
related Certificates. Upon such final deposit and the receipt by the Trustee of
a Request for Release therefor, the Co-Trustee shall promptly release to the
Master Servicer the Mortgage Files for the related Mortgage Loans.
Upon presentation and surrender of the related Certificates, the
Trustee shall cause to be distributed to Certificateholders of each affected
Class the amounts allocable to such Certificates held in the Distribution
Account (and, if applicable, the Carryover Reserve Fund) in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not surrender
related Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their related
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the second
notice all related Certificates shall not have been surrendered for
cancellation, the Class A-R shall be entitled to all unclaimed funds and other
assets that remain subject hereto.
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Section 9.03 Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase option on
the Mortgage Loans, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with an
Opinion of Counsel, at the expense of the Master Servicer, to the effect that
the failure of the Trust Fund to comply with the requirements of this Section
9.03 will not (i) result in the imposition of taxes on "prohibited transactions"
of a REMIC, or (ii) cause any REMIC created hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding:
(1) The Master Servicer shall establish a 90-day liquidation
period and notify the Trustee thereof, which shall in turn specify the first
day of such period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury Regulation Section 1.860F-1. The Master Servicer shall
prepare a plan of complete liquidation and shall otherwise satisfy all the
requirements of a qualified liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of Counsel obtained at the
expense of the Master Servicer;
(2) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Master Servicer
as agent of the Trustee shall sell all of the assets of the Trust Fund for
cash; and
(3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Class A-R Certificateholders all cash on hand
(other than cash retained to meet claims) related to such Class of
Certificates, and the Trust Fund shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Master Servicer to specify the 90-day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders.
(c) The Trustee as agent for each REMIC created hereunder hereby agrees
to adopt and sign such a plan of complete liquidation upon the written request
of the Master Servicer, and the receipt of the Opinion of Counsel referred to in
Section 9.03(a)(1), and together with the Holders of the Class A-R Certificates
agree to take such other action in connection therewith as may be reasonably
requested by the Master Servicer.
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ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Seller 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. Notwithstanding the foregoing, no amendment
that significantly changes the permitted activities of the trust created by this
Agreement may be made without the consent of Certificateholders representing not
less than 51% of the Voting Rights of each Class of Certificates affected by
such amendment.
The Trustee, the Depositor, the Master Servicer and the Seller may also
at any time and from time to time amend this Agreement, without the consent of
the Certificateholders, to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of the Trust Fund as a REMIC under the Code or to avoid or minimize the risk of
the imposition of any tax on the Trust Fund pursuant to the Code that would be a
claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee have been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such opinion
but in any case shall not be an expense of the Trustee, to the effect that such
action is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Seller and the Trustee and the Holders of each Class of
Certificates affected thereby evidencing not less than 51% of the Voting Rights
of such Class for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders of Certificates; provided that no such
amendment 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.
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Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund or the Certificateholders or cause the Trust Fund to fail
to qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
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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 or any Subsequent Transfer 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 and any Subsequent Transfer
Agreement shall be deemed to be an assignment and a grant pursuant to the terms
of this Agreement by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets that constitute
the Trust Fund, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of the Master Servicer or the
Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02, 2.03, 2.04 and 3.12; and
(v) The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
(i) Each report to Certificateholders described in Section 4.05;
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(ii) Each annual statement as to compliance described in Section 3.17;
and
(iii) Each annual independent public accountants' servicing report
described in Section 3.18.
(b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when sent by facsimile transmission,
first class mail or delivered to (i) in the case of the Depositor, CWABS, Inc.,
0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxx, with a
copy to the same address, Attention: Legal Department; (ii) in the case of the
Seller, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxx Xxxxx, with a copy to the same address, Attention: Legal
Department, or such other address as may be hereafter furnished to the Depositor
and the Trustee by the Master Servicer in writing; (iii) in the case of the
Master Servicer, Countrywide Home Loans Servicing LP, 000 Xxxxxxxxxxx Xxx, Xxxx
Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxx or such other address as may be
hereafter furnished to the Depositor and the Trustee by the Master Servicer in
writing; (iv) in the case of the Trustee, The Bank of New York, 0 Xxxx Xxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust MBS
Administration, CWABS, Series 2002-1, or such other address as the Trustee may
hereafter furnish to the Depositor or the Master Servicer; (v) in the case of
the Co-Trustee, BNY Western Trust Company, a subsidiary of The Bank of New York
Company Inc., 000 X. Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx, 00000,
Attention: MBS Support Services; and (vi) in the case of the Rating Agencies,
(x) Xxxxx'x Investors Service, Inc., Attention: ABS Monitoring Department, 00
Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (y) Standard & Poor's
Ratings Services, a division of The XxXxxx-Xxxx Companies, Attention: Mortgage
Surveillance Group, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. Notices
to Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
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
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or winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09 Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor, the Seller or the Trustee during the
Master Servicer's normal business hours, to examine all the books of account,
records, reports and other papers of the Master Servicer relating to the
Mortgage Loans, to make copies and extracts therefrom, to cause such books to be
audited by independent certified public accountants selected by the Depositor,
the Seller or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Master Servicer hereby authorizes
such accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense incident to the exercise by the Depositor,
the Seller or the Trustee of any right under this Section 10.09 shall be borne
by the party requesting such inspection; all other such expenses shall be borne
by the Master Servicer.
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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 Depositor, the Master Servicer, the Seller, the
Trustee and the Co-Trustee have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
CWABS, INC.,
as Depositor
By: /s/ Xxxx Xxxxx
-------------------
Name: Xxxx Xxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By: /s/ Xxxx Xxxxx
---------------------
Name: Xxxx Xxxxx
Title: First Vice President
COUNTRYWIDE HOME LOANS
SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: /s/ Xxxx Xxxxx
---------------------
Name: Xxxx Xxxxx
Title: First Vice President
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By: /s/Xxxxxxxx Xxxxxxxxxxx
----------------------------
Name: Xxxxxxxx Xxxxxxxxxxx
Title: Vice President
BNY WESTERN TRUST COMPANY,
not in its individual capacity,
but solely as Co-Trustee
By: /s/ Xxxxxxxxx Xxxxxx
------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 27th day of March, 2002, before me, a notary public in and for
said State, appeared Xxxx Xxxxx, personally known to me on the basis of
satisfactory evidence to be the Vice President of Countrywide Home Loans, Inc.,
one of the corporations that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxx
------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 27th day of March, 2002, before me, a notary public in and for
said State, appeared Xxxx Xxxxx, personally known to me on the basis of
satisfactory evidence to be the First 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 Xxxxxx
----------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 27th day of March, 2002, before me, a notary public in and for
said State, appeared Xxxx Xxxxx, 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 Xxxxxx
------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 27th day of March, 2002, before me, a notary public in and for
said State, appeared Xxxxxxxx Xxxxxxxxxxx, personally known to me on the basis
of satisfactory evidence to be a Vice President of The Bank of New York, a New
York banking corporation that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxxxxx Xxxxx
-----------------------------------
Notary Public
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 27th day of March, 2002, before me, a notary public in and for
said State, appeared Xxxxxxxxx Xxxxxx, personally known to me on the basis of
satisfactory evidence to be a Vice President of BNY Western Trust Company, a
California banking corporation that executed the within instrument, and also
known to me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxx Xxxxxxxxx
------------------------------
Notary Public
[Notarial Seal]
Exhibit A-1
through A-6
[Exhibits A-1 through A-6 are
photocopies of such Certificates as
delivered.]
[See appropriate documents delivered at closing.]
A-1
Exhibit B
[Reserved]
B-1
Exhibit C
[Reserved]
C-1
Exhibit D
Exhibit D is a photocopy
of the Class A-R Certificate
as delivered.]
[See appropriate documents delivered at closing.]
D-1
Exhibit E
Exhibit E is a photocopy
of the Tax Matters Person Certificate
as delivered.]
[See appropriate documents delivered at closing.]
E-1
Exhibit F-1 and F-2
[Exhibit F-1 and F-2 are schedules of Mortgage Loans]
[Delivered to Trustee at closing and on file with the Trustee.]
F-1
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of March 1, 2002
among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller , Countrywide Home Loans Servicing LP, as
Master Servicer, The Bank of New York, as Trustee, and BNY
Western Trust Company, as Co-Trustee, relating to the Asset-
Backed Certificates, Series 2002-1
-------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed in the attached list of exceptions) the Co-Trustee
has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of , without recourse", or, if the original Mortgage Note has been
lost or destroyed and not replaced, an original lost note affidavit from the
Seller, stating that the original Mortgage Note was lost or destroyed, together
with a copy of the related Mortgage Note; and
(ii) a duly executed assignment of the Mortgage in the form permitted
by Section 2.01 of the Pooling and Servicing Agreement referred to above.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
G-1-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:____________________________
Name:
Title:
G-1-2
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of March 1, 2002
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, The Bank of New York, as Trustee, and BNY Western
Trust Company, as Co-Trustee, relating to the Asset-Backed
Certificates, Series 2002-1 [and the Subsequent Transfer
Agreement dated as of _________, 2001 among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller, and The
Bank of New York, as Trustee]
-------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as listed in the following paragraph, as to each [Initial Mortgage
Loan][Subsequent Mortgage Loan] listed in the [Mortgage Loan Schedule][Loan
Number and Borrower Identification Mortgage Loan Schedule] (other than any
[Mortgage Loan][Loan Number and Borrower Identification Mortgage Loan Schedule]
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 [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original
recorded Mortgage, [and in the case of each [Initial
Mortgage Loan][Subsequent Mortgage Loan] that is a MERS
Mortgage Loan, the original Mortgage, noting thereon the
presence of the MIN of the [Initial Mortgage
Loan][Subsequent Mortgage Loan] and language indicating that
the [Initial Mortgage Loan][Subsequent Mortgage Loan] is a
MOM Loan if the [Initial Mortgage Loan][Subsequent Mortgage
Loan] is a MOM Loan, with
G-2-1
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 [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage to "Asset-Backed Certificates,
Series 2002-1, CWABS, Inc., by The Bank of New York, a New
York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of March 1, 2002, without
recourse", or, in the case of each [Initial Mortgage
Loan][Subsequent Mortgage Loan] with respect to property
located in the State of California that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage in blank
(each such assignment, when duly and validly completed, to be
in recordable form and sufficient to effect the assignment of
and transfer to the assignee thereof, under the Mortgage to
which such assignment relates);
(iv) original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such
Mortgage [(noting the presence of a MIN in the case of each
MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any, with
evidence of recording thereon if recordation thereof is
permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto
or, in the event such original title policy has not been
received from the insurer, any one of an original title
binder, an original preliminary title report or an original
title commitment, or a copy thereof certified by the title
company, with the original policy of title insurance to be
delivered within one year of the Closing Date.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv), as applicable, the Trustee has received, in lieu
thereof, a true and complete copy of such Mortgage and/or such assignment or
assignments of the Mortgage, as applicable, each certified by the Seller, the
applicable title company, escrow agent or attorney, or the originator of such
[Initial Mortgage Loan][Subsequent 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
[Initial Mortgage Loan][Subsequent Mortgage Loan], and (ii) the information set
forth in items (i), (iv), (v), (vi), (viii), (xi) and (xiv) of the definition of
the "Mortgage Loan Schedule" in Section 1.01 of the Pooling and Servicing
Agreement accurately reflects information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and
G-2-2
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 [Initial Mortgage
Loans][Subsequent Mortgage Loan] identified on the [Mortgage Loan Schedule][Loan
Number and Borrower Identification Mortgage Loan Schedule] or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:
----------------------------------
Name:
Title:
G-2-3
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of March 1, 2002 (the
"Pooling and Servicing Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller, Countrywide
Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and BNY Western Trust Company, as Co-Trustee, relating
to the Asset-Backed Certificates, Series 2002-1 [and the
Subsequent Transfer Agreement dated as of _________, 2001 (the
"Subsequent Transfer Agreement") among CWABS, Inc., as Depositor,
Countrywide Home Loans, Inc., as Seller, and The Bank of New
York, as Trustee]
----------------------------------------------------------------
Gentlemen:
[Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the above-captioned Pooling and Servicing Agreement.] The
undersigned hereby certifies that [, with respect to the Subsequent Mortgage
Loans delivered in connection with the Subsequent Transfer Agreement,] as to
each Delay Delivery Mortgage Loan listed on the Schedule A attached hereto
(other than any [Initial Mortgage Loan][Subsequent Mortgage Loan] paid in full
or listed on Schedule B attached hereto) the Co-Trustee has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following
form: "Pay to the order of _______________ without recourse", with all
intervening endorsements that show a complete chain of endorsement
from the originator to the Seller, or, if the original Mortgage Note
has been lost or destroyed and not replaced, an original lost note
affidavit from the Seller, stating that the original Mortgage Note was
lost or destroyed, together with a copy of the related Mortgage Note;
(ii) in the case of each [Initial Mortgage Loan][Subsequent
Mortgage Loan] that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage to "Asset-Backed Certificates, Series
2002-1, CWABS, Inc., by The Bank of New York, a New York banking
corporation, as trustee under the Pooling and Servicing Agreement
dated as of March 1, 2002, without recourse", or, in the case of each
[Initial Mortgage Loan][Subsequent Mortgage Loan] with respect to
property located in the State of
G-3-1
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.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the [Initial Mortgage Loans][Subsequent Mortgage Loans] identified on the
[Mortgage Loan Schedule][Loan Number and Borrower Identification Mortgage Loan
Schedule] or (ii) the collectibility, insurability, effectiveness or suitability
of any such [Initial Mortgage Loan][Subsequent Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
THE BANK OF NEW YORK,
as Trustee
By:
---------------------------
Name:
Title:
G-3-2
EXHIBIT G-4
FORM OF INITIAL CERTIFICATION OF TRUSTEE
(SUBSEQUENT MORTGAGE LOANS)
[Date]
[Depositor]
[Seller]
[Master Servicer]
Re: Pooling and Servicing Agreement dated as of March 1, 2002
among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller, Countrywide Home Loans Servicing LP, as
Master Servicer, The Bank of New York, as Trustee, and BNY
Western Trust Company, as Co-Trustee, relating to the Asset-
Backed Certificates, Series 2002-1
--------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, as to
each Subsequent Mortgage Loan listed in the Loan Number and Borrower
Identification Mortgage Loan Schedule (other than any Subsequent 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 Subsequent Mortgage Loan, without recourse in the following
form: "Pay to the order of __________, without recourse", or, if the original
Mortgage Note has been lost or destroyed and not replaced, an original lost note
affidavit from the Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note; and
(ii) a duly executed assignment of the Mortgage in the form permitted
by Section 2.01 of the Pooling and Servicing Agreement referred to above.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
G-4-1
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Loan Number and Borrower Identification
Mortgage Loan Schedule or (ii) the collectibility, insurability, effectiveness
or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By:____________________________
Name:
Title:
G-4-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Seller]
Re: Pooling and Servicing Agreement dated as of March 1, 2002 among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as Seller, Countrywide
Home Loans Servicing LP, as Master Servicer, The Bank of New
York, as Trustee, and BNY Western Trust Company, as Co-Trustee, relating
to the Asset-Backed Certificates, Series 2002-1 [and the Subsequent
Transfer Agreement dated as of ____________, 2001 among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as Seller, and The Bank of New
York, as Trustee]
------------------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each [Initial Mortgage Loan][Subsequent Mortgage Loan] listed in the [Mortgage
Loan Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule]
(other than any [Initial Mortgage Loan][Subsequent Mortgage Loan] paid in full
or listed on the attached Document Exception Report) the Co-Trustee has
received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller, or, if the original Mortgage Note has been lost or destroyed and not
replaced, an original lost note affidavit from the Seller, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;
(ii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage, [and in
the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] that is a
MERS Mortgage Loan, the original Mortgage, noting thereon the presence of the
MIN of the [Initial Mortgage Loan][Subsequent Mortgage Loan] and language
indicating that the [Initial Mortgage Loan][Subsequent Mortgage Loan] is a MOM
Loan if the [Initial Mortgage Loan][Subsequent 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 [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Asset-Backed
H-1
Certificates, Series 2002-1, CWABS, Inc., by The Bank of New York, a New York
banking corporation, as trustee under the Pooling and Servicing Agreement dated
as of March 1, 2002, without recourse", or, in the case of each [Initial
Mortgage Loan][Subsequent Mortgage Loan] with respect to property located in the
State of California that is not a MERS Mortgage Loan, a duly executed assignment
of the Mortgage in blank (each such assignment, when duly and validly completed,
to be in recordable form and sufficient to effect the assignment of and transfer
to the assignee thereof, under the Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage [(noting the
presence of a MIN in the case of each MERS Mortgage Loan)];
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of recording thereon
if recordation thereof is permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or any one of an
original title binder, an original preliminary title report or an original title
commitment, or a copy thereof certified by the title company.
If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (xiii) and (xiv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the [Initial Mortgage Loans][Subsequent Mortgage Loan] identified on the
[Mortgage Loan Schedule][Loan Number and Borrower Identification Mortgage Loan
Schedule] or (ii) the collectibility, insurability, effectiveness or suitability
of any such [Initial Mortgage Loan][Subsequent Mortgage Loan].
H-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
The Bank of New York,
as Trustee
By: ___________________________
Name:
Title:
H-3
EXHIBIT I
TRANSFER AFFIDAVIT
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _______________, the proposed
Transferee of an Ownership Interest in a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, dated as
of March 1, 2002 (the "Agreement"), by and among CWABS, Inc., as depositor (the
"Depositor"), Countrywide Home Loans, Inc., as Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York, as Trustee, and BNY
Western Trust Company, as Co-Trustee. Capitalized terms used, but not defined
herein or in Exhibit 1 hereto, shall have the meanings ascribed to such terms in
the Agreement. The Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee.
2. The Transferee is not an employee benefit plan that is subject to
Title I of ERISA or to Section 4975 of the Internal Revenue Code of 1986, nor is
it acting on behalf of or with plan assets of any such plan. The Transferee is,
as of the date hereof, and will be, as of the date of the Transfer, a Permitted
Transferee. The Transferee is acquiring its Ownership Interest in the
Certificate for its own account.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal
I-1
consequences of the acquisition of an Ownership Interest in the Certificate
including, without limitation, the restrictions on subsequent Transfers and the
provisions regarding voiding the Transfer and mandatory sales. The Transferee
expressly agrees to be bound by and to abide by the provisions of Section
5.02(c) of the Agreement and the restrictions noted on the face of the
Certificate. The Transferee understands and agrees that any breach of any of the
representations included herein shall render the Transfer to the Transferee
contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the Class
A-R Certificates.
8. The Transferee's taxpayer identification number is _____.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the Transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
Transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.
11. The Transferee has provided financial statements or other financial
information requested by the Transferor in connection with the transfer of the
Class A-R Certificates to permit the Transferor to assess the financial
capability of the Transferee to pay such taxes.
* * *
I-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of _____________, 20__.
[NAME OF TRANSFEREE]
By:_________________________
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------
[Assistant] Secretary
Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ____________ of the Transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of _______, 20__.
______________________
NOTARY PUBLIC
My Commission expires the ___ day of
___________________, 20__.
I-3
EXHIBIT 1
Certain Definitions
-------------------
"Ownership Interest": As to any Certificate, any ownership interest in
such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
4224, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that certain Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, bank, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
EXHIBIT 2
Section 5.02(c) of the Agreement
--------------------------------
(c) Each Person who has or who acquires any Ownership Interest in a
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class A-R Certificate
unless, in addition to the certificates required to be delivered to
the Trustee under subparagraph (b) above, the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial
owner or the proposed transferee in the form attached hereto as
Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Class A-R Certificate, (B) to obtain a
Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of a Class
A-R Certificate and (C) not to Transfer its Ownership Interest in a
Class A-R Certificate or to cause the Transfer of an Ownership
Interest in a Class A-R Certificate to any other Person if it has
actual knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class A-R Certificate that is in
fact not permitted by Section 5.02(b) and this Section 5.02(c) or for
making any payments due on such Certificate to the Holder thereof or
taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit and Transferor
Certificate. The Trustee shall be entitled but not obligated to
recover from any Holder of a Class A-R Certificate that was in fact
not a Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class A-R Certificate at and
after either such time. Any such payments so recovered by the Trustee
shall be paid and delivered by the Trustee to the last preceding
Permitted Transferee of such Certificate.
(v) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class A-R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee, the Seller or the Master
Servicer to the effect that the elimination of such restrictions will not cause
the Trust Fund to fail to qualify as a REMIC at any time that the Certificates
are outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
Ownership Interest in a Class A-R Certificate hereby consents to any amendment
of this Agreement that, based on an Opinion of Counsel furnished to the Trustee,
is reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class A-R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class A-R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
-2-
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE FOR
CLASS A-R CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
0 Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed
Certificates, Series 2002-1
---------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class A-R Certificates, we
certify that we have no knowledge the Transferee is not a Permitted Transferee.
All capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of March 1,
2002, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and BNY Western Trust Company, as Co-Trustee.
Very truly yours,
---------------------------
Name of Transferor
By:_________________________
Name:
Title:
J-1
EXHIBIT K
[Reserved]
K-1
EXHIBIT L
[Reserved]
L-1
EXHIBIT M
REQUEST FOR RELEASE
(for Co-Trustee)
Loan Information
----------------
Name of Mortgagor: ________________________________________
Master Servicer
Loan No.: ________________________________________
Co-Trustee
----------
Name: ________________________________________
Address: ________________________________________
________________________________________
Co-Trustee
Mortgage File No.: ________________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Co-Trustee for the
Holders of Asset-Backed Certificates, Series 2002-1, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement dated as of March 1, 2002 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer, the Trustee and
the Co-Trustee.
( ) Mortgage Note dated ___________, ____, in the original principal sum of
$________, made by __________________, payable to, or endorsed to the
order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Deed of Trust recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________________ as instrument no. __________ in the County Recorder's
Office of the County of __________, State of _______________ in
book/reel/docket
M-1
_______________ of official records at page/image _____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) __________________________________________________
( ) __________________________________________________
( ) __________________________________________________
( ) __________________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of
the Documents in trust for the benefit of the Trust Fund, solely for
the purposes provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit
the Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions
nor shall the Master Servicer assert or seek to assert any claims or
rights of setoff to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Co-Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to
the Documents has been liquidated and the proceeds thereof have been
remitted to the Certificate Account and except as expressly provided in
the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of the
Trust Fund, and the Master Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the Master
Servicer's possession, custody or control.
[Master Servicer]
By _______________________________
Its ______________________________
Date: _________________, ____
M-2
EXHIBIT N
REQUEST FOR RELEASE
[Mortgage Loans Paid in Full, Repurchased or Replaced]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 2002-1
__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]
LOAN NUMBER:_______________ BORROWER'S NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
______________ ______________________ DATED:____________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
N-1
Exhibit O
[Exhibit O is a photocopy
of the Depository Agreement
as delivered.]
[See appropriate documents delivered at closing.]
O-1
EXHIBIT P
FORM OF MORTGAGE NOTE AND MORTGAGE
P-1
EXHIBIT Q
[FORM OF SUBSEQUENT TRANSFER AGREEMENT]
SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________, 200[_] (this
"Subsequent Transfer Agreement"), among CWABS, INC., a Delaware corporation, as
depositor (the "Depositor"), COUNTRYWIDE HOME LOANS, INC., a New York
corporation, in its capacity as seller under the Pooling and Servicing Agreement
referred to below ( the "Seller") and The Bank of New York, a New York banking
corporation, as trustee (the "Trustee");
WHEREAS, the Depositor, the Seller, the Trustee and Countrywide Home
Loans Servicing LP, as Master Servicer, have entered in the Pooling and
Servicing Agreement, dated as of March 1, 2002 (the "Pooling and Servicing
Agreement"), relating to the CWABS, Inc. Asset-Backed Certificates, Series
2002-1 (capitalized terms not otherwise defined herein are used as defined in
the Pooling and Servicing Agreement);
WHEREAS, Section 2.01(b) of the Pooling and Servicing Agreement
provides for the parties hereto to enter into this Subsequent Transfer Agreement
in accordance with the terms and conditions of the Pooling and Servicing
Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and adequacy of which are hereby acknowledged
the parties hereto agree as follows:
(a) The "Subsequent Transfer Date" with respect to this Subsequent
Transfer Agreement shall be ________ __, 200[_].
(b) The "Subsequent Transfer Date Aggregate Purchase Amount" with
respect to this Subsequent Transfer Agreement shall be $_______________;
provided, however, that such amount shall not exceed the amount on deposit in
the Pre-Funding Account.
(c) [reserved]
(d) [reserved]
(e) The Subsequent Mortgage Loans conveyed on the Subsequent Transfer
Date shall be determined by the Seller as follows.
(i) The Seller shall list all funded mortgage loans then owned by it
eligible for inclusion in the Trust Fund that qualify for inclusion in the
Trust Fund by the date on which they were funded, and for each date, the
Mortgagors shall be listed alphabetically. Beginning with the earliest
date, sequentially by date and within a date alphabetically, the listed
loans shall be transferred to the Trust Fund until either their aggregate
Stated Principal Balance is as close as possible or to equal to the
Subsequent Transfer Date Aggregate Purchase Amount without exceeding it or
all of the listed loans have been transferred. No fixed rate mortgage loan
that would be a Credit Comeback Loan is
Q-1
eligible for conveyance to the Trust Fund on a Subsequent Transfer Date
occurring after ____, 200[_].
Once the potential Subsequent Mortgage Loans are identified in
this manner, the total potential Mortgage Loans shall be tested for
compliance with the Pool Characteristics as provided in Section
2.01(e)(vii) of the Pooling and Servicing Agreement after taking into
account the addition of such potential Subsequent Mortgage Loans. If,
as a result of the potential addition of Subsequent Mortgage Loans
described in the preceding sentence, any Pool Characteristic is outside
any permitted parameter, then beginning with the last mortgage loan
initially added as a potential Subsequent Mortgage Loan and progressing
in reverse order, any potential Subsequent Mortgage Loan having a
characteristic that is outside of the permitted parameters of a
parameter violated by the total potential Mortgage Pool shall be
removed. Then additional mortgage loans shall be added as provided in
the preceding paragraph except that no mortgage loan shall be added if
it has a Pool Characteristic that is outside of the permitted
parameters of a parameter violated by the total potential Mortgage
Pool. This procedure shall be repeated until the Pool Characteristics
are satisfied after taking into account the addition of the potential
Subsequent Mortgage Loans.
(f) In case any provision of this Subsequent Transfer Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions or obligations shall not in any way be affected or
impaired thereby.
(g) In the event of any conflict between the provisions of this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement, the
provisions of the Pooling and Servicing Agreement shall prevail.
(h) This Subsequent Transfer Agreement shall be governed by, and shall
be construed and enforced in accordance with the laws of the State of New York.
(i) The Subsequent Transfer Agreement may be executed in one or more
counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
Q-2
IN WITNESS WHEREOF, the parties to this Subsequent Transfer Agreement
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: _______________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By: _______________________________
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By:________________________________
Name:
Title:
Q-3
EXHIBIT R
[FORM OF CAP CONTRACT]
BEAR XXXXXXX
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
000 XXXX XXXXXX
XXXXX 0000
XXX XXXX, XXX XXXX 00000
000-000-0000
DATE: March 18, 2002
TO: Countrywide Home Loans, Inc.
ATTENTION: Xx. Xxxx Xxxxx
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and
Agreement
REFERENCE NUMBER: FXNCC4743 - amended
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the current Transaction entered into on the Trade Date specified
below (the "Current Transaction") between Bear Xxxxxxx Financial Products Inc.
("BSFP") and Countrywide Home Loans, Inc. ("Counterparty"). This Agreement,
which evidences a complete and binding agreement between you and us to enter
into the Transaction on the terms set forth below, constitutes a "Confirmation"
as referred to in the "ISDA Form Master Agreement" (as defined below), as well
as a "Schedule" as referred to in the ISDA Form Master Agreement.
1. This Agreement is subject to the 1991 ISDA Definitions (the "1991
Definitions"), as supplemented by the 1998 Supplement to the 1991 ISDA
Definitions (the "Supplement") and as amended and supplemented by the 1998 ISDA
Euro Definitions (the "Euro Definitions") (collectively the "Definitions"), each
as published by the International Swaps and Derivatives Association, Inc.
("ISDA"). You and we have agreed to enter into this Agreement in lieu of
negotiating a Schedule to the ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA Form Master Agreement") but, rather, an ISDA Form Master
Agreement shall be deemed to have been executed by you and us on the date we
entered into the Transaction. In the event of any inconsistency between the
provisions of this Agreement and the Definitions or the ISDA Form Master
Agreement, this Agreement shall prevail for purposes of the Transaction.
R-1
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 2 of 13
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Rate Cap
Notional Amount: Shall equal:
(i) USD 230,000,000 for the initial
Calculation Period, and
(ii) the amount as detailed in the
Schedule of Notional Amounts
attached hereto.
Trade Date: March 13, 2002
Effective Date: Xxxxx 00, 0000
Xxxxxxxxxxx Date: December 25, 2011, subject to
adjustment in accordance
with the Business Day Convention.
Fixed Amount (Premium):
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: November 20, 2001
Fixed Amount: USD 599,000
Floating Amounts:
Floating Rate Payer: BSFP
Cap Rate: 6.25000%
Period End Dates: The 25th calendar day of
each month during the Term of this
Transaction, commencing April
25, 2002 and ending on the
Termination Date, subject to
adjustment in accordance with the
Business Day Convention.
R-2
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 3 of 13
Floating Rate Payer
Payment Dates: Each Payment shall be applicable.
The Floating Rate Payer Payment
Date shall be one Business day
preceding each Floating Rate
Payer Period End Dates.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Floating Rate Day
Count Fraction: Actua1/360
Reset Dates: The first day of each Calculation
Period
Compounding: Inapplicable
Business Days: New York and London
Business Day Convention: Modified Following
Calculation Agent: BSFP
3. Additional Provisions: 1) Each party hereto is
hereby advised and acknowledges
that the other party has engaged
in (or refrained from engaging in)
substantial financial transactions
and has taken (or refrained from
taking) other material actions in
reliance upon the entry by the
parties into the Transaction
being entered into on the terms
and conditions set forth herein
and in the Confirmation relating
to such Transaction, as
applicable. This paragraph(1)
shall be deemed repeated on the
trade date of each Transaction.
4. Provisions Deemed Incorporated in a Schedule to the Master Agreement:
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form
Master Agreement will apply to any Transaction.
2) Termination Provisions. For purposes of the Master Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty for any
purpose.
R-3
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 4 of 13
(b) "Specified Transaction" is not applicable to BSFP or Counterparty for any
purpose, and, accordingly, Section 5(a)(v) shall not apply to BSFP or
Counterparty.
(c) The "Cross Default" provisions of Section 5(a)(vi) will not apply to BSFP
or to Counterparty.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to BSFP or Counterparty.
(e) The "Automatic Early Termination" provision of Section 6(a) will not apply
to BSFP or to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
3) Tax Representations. Not applicable.
4) Limitation on Events of Default. Notwithstanding the terms of Sections 5
and 6 of this Agreement, if at any time and so long as the Counterparty has
satisfied in full all its payment obligations under Section 2(a)(i) of this
Agreement and has at the time no future payment obligations, whether
absolute or contingent, under such Section, then unless BSFP is required
pursuant to appropriate proceedings to return to the Counterparty or
otherwise returns to the Counterparty upon demand of the Counterparty any
portion of any such payment, (a) the occurrence of an event described in
Section 5(a) of this Agreement with respect to the Counterparty shall not
constitute an Event of Default or Potential Event of Default with respect
to the Counterparty as Defaulting Party and (b) BSFP shall be entitled to
designate an Early Termination Date pursuant to Section 6 of this Agreement
only as a result of the occurrence of a Termination Event set forth in
either Section 5(b)(i) or 5(b)(ii) of this Agreement with respect to BSFP
as the Affected Party.
R-4
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 5 of 13
5) Documents to be Delivered. For the purpose of Section 4(a):
(1) Tax forms, documents, or certificates to be delivered are:
(2) Other documents to be delivered are:
Party required to deliver document Form/Document/Certificate Date by which to be delivered
BSFP and the Counterparty Any document required or reasonably Promptly after the earlier of (i)
requested to allow the other party reasonable demand by either
to make payments under this party or (ii) learning that such
Agreement without any deduction or form or document is required
withholding for or on the account of
any Tax or with such deduction or
withholding at a reduced rate
Party required to deliver Form/Document/ Certificate Date by which to be Covered by Section 3(d)
document delivered Representation
BSFP and the Counterparty Any documents required by the Upon the execution and Yes
receiving party to evidence the delivery of this
authority of the delivering Agreement and such
party or its Credit Support Confirmation
Provider, if any, for it to
execute and deliver this
Agreement, any Confirmation,
and any Credit Support
Documents to which it is a
party, and to evidence the
authority of the delivering
party or its Credit Support
Provider to perform its
obligations under this
Agreement, such Confirmation
and/or Credit Support Document,
as the case may be
R-5
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 6 of 13
BSFP and the Counterparty A certificate of an authorized Upon the execution and Yes
officer of the party, as to the delivery of this
incumbency and authority of the Agreement and such
respective officers of the Confirmation
party signing this Agreement,
any relevant Credit Support
Document, or any Confirmation,
as the case may be
(3) BSFP will provide a Legal Opinion.
6) Miscellaneous. Miscellaneous
(a) Address for Notices: For the purposes of Section 12(a) of this Agreement:
Address for notices or communications to BSFP:
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager-- Suite 2700
Facsimile: (000) 000-0000
with a copy to:
Address: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
Attention: Derivative Operations - 7th Floor
Facsimile: (000) 000-0000
(For all purposes)
Address for notices or communications to the Counterparty:
Address: 0000 Xxxx Xxxxxxx
Xxxx Xxxx XX-000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
(b) Process Agent. For the purpose of Section 13(c):
BSFP appoints as its
Process Agent: Not Applicable
The Counterparty appoints
as its Process Agent: Not Applicable
R-6
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 7 of 13
(c) Offices. The provisions of Section 10(a) will not apply to this Agreement;
neither BSFP nor the Counterparty have any Offices other than as set forth
in the Notices Section and BSFP agrees that, for purposes of Section 6(b)
of this Agreement, it shall not in future have any Office other than one in
the United States.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
BSFP is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BSFP.
(f) Credit Support Document. Not applicable for either BSFP or the
Counterparty.
(g) Credit Support Provider.
BSFP: Not Applicable
The Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the law of
the State of New York shall govern their rights and duties in whole.
(i) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall
be held to be invalid or unenforceable (in whole or in part) for any
reason, the remaining terms, provisions, covenants, and conditions hereof
shall continue in full force and effect as if this Agreement had been
executed with the invalid or unenforceable portion eliminated, so long as
this Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter of
this Agreement and the deletion of such portion of this Agreement will not
substantially impair the respective benefits or expectations of the
parties.
The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid or
enforceable term, provision, covenant or condition, the economic effect of which
comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(j) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any and
all communications between officers or employees of the parties, waives any
further notice of such monitoring or recording, and agrees to notify its
officers and employees of such monitoring or recording.
R-7
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 8 of 13
(k) Waiver of Jury Trial. Each party waives any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document.
(l) BSFP will not unreasonably withhold or delay its consent to an assignment
of this Agreement to any other third party.
7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement, provided that BSFP shall not be deemed to have any
Affiliates for purposes of this Agreement, including for purposes of
Section 6(b)(ii).
8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Each party represents to the other party on each date
when it enters into a Transaction that:--
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction (whether written or
oral), other than the representations expressly made in this Agreement or the
Confirmation in respect of that Transaction.
(2) Evaluation and Understanding.
(i) It has the capacity to evaluate (internally or through
independent professional advice) the Transaction and has made its own decision
to enter into the Transaction; and
(ii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those terms and conditions and to
assume those risks, financially and otherwise.
(3) Purpose. It is entering into the Transaction for the
purposes of managing its borrowings or investments, hedging its underlying
assets or liabilities or in connection with a line of business.
Principal. It is entering into the Transaction as principal, and not as agent or
in any other capacity, fiduciary or otherwise.
NEITHER THE BEAR XXXXXXX COMPANIES INC. NOR ANY SUBSIDIARY OR
AFFILIATE OF THE BEAR XXXXXXX COMPANIES INC. OTHER THAN BSFP IS
AN OBLIGOR OR A CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.
R-8
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 9 of 13
5. Account Details and
Settlement Information: Payments to BSFP:
Citibank, N.A., New York
ABA Number: 000-0000-00, for the account
of Bear, Xxxxxxx Securities Corp.
Account Number: 0925-3186, for further
credit to Bear Xxxxxxx Financial Products
Inc. Sub-account Number: 102-04654-1-3
Attention: Derivatives Department
Payments to Counterparty:
[Please provide]
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to 000-000-0000. For inquiries regarding U.S. Transactions, please
contact Xxxxx Xxxxxx by telephone at 000-000-0000. For all other inquiries
please contact Xxxxxxx Xxxxxxx by telephone at 000-0-000-0000. Originals will be
provided for your execution upon your request.
R-9
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 10 of 13
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By:______________________________
Name: Xxxxx Xxxxxxx
Title: D. P. C. Manager
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
COUNTRYWIDE HOME LOANS, INC.
By:______________________________
Name:
Title:
(Authorized Signatory)
cc: Xxxx Xxxxxxx
R-10
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 11 of 13
SCHEDULE OF NOTIONAL AMOUNTS
(all such dates subject to adjustment in accordance with the
Business Day Convention)
Applicable Notional
From and including To but excluding Amount (USD)
------------------ ---------------- ------------
Effective Date April 25, 2002 230,000,000.00
April 25, 2002 May 25, 2002 228,754,463.96
May 25, 2002 June 25, 2002 227,150,298.87
June 25, 2002 July 25, 2002 225,188,083.16
July 25, 2002 August 25, 2002 222,870,030.37
August 25, 2002 September 25, 2002 220,200,022.81
September 25, 2002 October 25, 2002 217,183,634.22
October 25, 2002 November 25, 2002 213,831,178.90
November 25, 2002 December 25, 2002 210,175,065.52
December 25, 2002 January 25, 2003 206,547,866.94
January 25, 2003 February 25, 2003 202,981,782.03
February 25, 2003 March 25, 2003 199,475,793.49
March 25, 2003 April 25, 2003 196,028,900.85
April 25, 2003 May 25, 2003 192,640,120.18
May 25, 2003 June 25, 2003 189,308,483.85
June 25, 2003 July 25, 2003 186,033,040.19
July 25, 2003 August 25, 2003 182,812,853.32
August 25, 2003 September 25, 2003 179,647,002.81
September 25, 2003 October 25, 2003 176,534,583.48
October 25, 2003 November 25, 2003 173,474,705.11
November 25, 2003 December 25, 2003 170,466,492.22
December 25, 2003 January 25, 2004 167,509,083.82
January 25, 2004 February 25, 2004 164,601,633.16
February 25, 2004 March 25, 2004 121,307,480.63
March 25, 2004 April 25, 2004 119,199,965.94
April 25, 2004 May 25, 2004 117,128,076.74
May 25, 2004 June 25, 2004 115,091,219.00
June 25, 2004 July 25, 2004 113,088,808.49
July 25, 2004 August 25, 2004 111,120,270.68
August 25, 2004 September 25, 2004 109,185,040.55
September 25, 2004 October 25, 2004 107,282,562.40
October 25, 2004 November 25, 2004 105,412,289.78
November 25, 2004 December 25, 2004 103,573,685.27
December 25, 2004 January 25, 2005 101,766,220.34
January 25, 2005 February 25, 2005 99,989,375.21
February 25, 2005 March 25, 2005 65,495,092.50
March 25, 2005 April 25, 2005 64,350,338.83
R-11
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 12 of 13
April 25, 2005 May 25, 2005 63,224,992.90
May 25, 2005 June 25, 2005 62,118,730.58
June 25, 2005 July 25, 2005 61,031,233.13
July 25, 2005 August 25, 2005 59,962,187.08
August 25, 2005 September 25, 2005 58,911,284.18
September 25, 2005 October 25, 2005 57,878,221.24
October 25, 2005 November 25, 2005 56,862,700.15
November 25, 2005 December 25, 2005 55,864,427.69
December 25, 2005 January 25, 2006 54,883,115.54
January 25, 2006 February 25, 2006 53,918,480.14
February 25, 2006 March 25, 2006 37,079,169.84
March 25, 2006 April 25, 2006 36,426,690.15
April 25, 2006 May 25, 2006 35,785,308.24
May 25, 2006 June 25, 2006 35,154,838.46
June 25, 2006 July 25, 2006 34,535,098.25
July 25, 2006 August 25, 2006 33,925,908.06
August 25, 2006 September 25, 2006 33,327,091.33
September 25, 2006 October 25, 2006 32,738,474.42
October 25, 2006 November 25, 2006 32,159,886.57
November 25, 2006 December 25, 2006 31,591,159.87
December 25, 2006 January 25, 2007 31,032,129.17
January 25, 2007 February 25, 2007 30,482,632.08
February 25, 2007 March 25, 2007 29,942,508.90
March 25, 2007 April 25, 2007 29,411,602.58
April 25, 2007 May 25, 2007 28,889,758.67
May 25, 2007 June 25, 2007 28,376,825.29
June 25, 2007 July 25, 2007 27,872,653.08
July 25, 2007 August 25, 2007 27,377,095.17
August 25, 2007 September 25, 2007 26,890,007.11
September 25, 2007 October 25, 2007 26,411,246.84
October 25, 2007 November 25, 2007 25,940,674.71
November 25, 2007 December 25, 2007 25,478,153.33
December 25, 2007 January 25, 2008 25,023,547.63
January 25, 2008 February 25, 2008 24,576,724.76
February 25, 2008 March 25, 2008 24,137,554.09
March 25, 2008 April 25, 2008 23,705,907.17
April 25, 2008 May 25, 2008 23,281,657.66
May 25, 2008 June 25, 2008 22,864,681.33
June 25, 2008 July 25, 2008 22,454,856.02
July 25, 2008 August 25, 2008 22,052,061.60
August 25, 2008 September 25, 2008 21,656,179.92
September 25, 2008 October 25, 2008 21,267,094.82
October 25, 2008 November 25, 2008 20,884,692.06
November 25, 2008 December 25, 2008 20,508,859.28
R-12
Reference Number: FXNCC4743
Countrywide Home Loans, Inc.
March 18, 2002
Page 13 of 13
December 25, 2008 January 25, 2009 20,139,486.02
January 25, 2009 February 25, 2009 19,776,463.64
February 25, 2009 March 25, 2009 19,419,685.31
March 25, 2009 April 25, 2009 19,069,045.97
April 25, 2009 May 25, 2009 18,724,442.32
May 25, 2009 June 25, 2009 18,385,772.77
June 25, 2009 July 25, 2009 18,052,937.43
July 25, 2009 August 25, 2009 17,725,838.05
August 25, 2009 September 25, 2009 17,404,378.05
September 25, 2009 October 25, 2009 17,088,462.42
October 25, 2009 November 25, 2009 16,777,997.75
November 25, 2009 December 25, 2009 16,472,892.19
December 25, 2009 January 25, 2010 16,173,055.42
January 25, 2010 February 25, 2010 15,878,398.60
February 25, 2010 March 25, 2010 15,588,834.40
March 25, 2010 April 25, 2010 15,304,276.93
April 25, 2010 May 25, 2010 15,024,641.72
May 25, 2010 June 25, 2010 14,749,845.74
June 25, 2010 July 25, 2010 14,479,807.30
July 25, 2010 August 25, 2010 14,214,446.10
August 25, 2010 September 25, 2010 13,953,683.17
September 25, 2010 October 25, 2010 13,697,440.86
October 25, 2010 November 25, 2010 13,445,642.82
November 25, 2010 December 25, 2010 13,198,213.95
December 25, 2010 January 25, 2011 12,955,080.42
January 25, 2011 February 25, 2011 12,716,169.63
February 25, 2011 March 25, 2011 12,481,410.19
March 25, 2011 April 25, 2011 12,250,731.89
April 25, 2011 May 25, 2011 12,024,065.71
May 25, 2011 June 25, 2011 11,801,343.76
June 25, 2011 July 25, 2011 11,582,499.31
July 25, 2011 August 25, 2011 11,367,466.71
August 25, 2011 September 25, 2011 11,156,181.44
September 25, 2011 October 25, 2011 10,948,580.02
October 25, 2011 November 25, 2011 10,744,600.06
November 25, 2011 Termination Date 10,544,180.20
R-13
EXHIBIT S
[FORM OF CAP CONTRACT ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of March 27, 2002 ("Assignment
Agreement"), among COUNTRYWIDE HOME LOANS, INC. ("Assignor"), THE BANK OF NEW
YORK, NOT IN AN INDIVIDUAL CAPACITY, BUT AS TRUSTEE FOR CWABS, INC. ASSET-BACKED
CERTIFICATES, SERIES 2002-1 ("Assignee"), pursuant to a Pooling and Servicing
Agreement dated as of March 1, 2002 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as depositor, Assignor, as seller, Countrywide Home Loans
Servicing LP, as master servicer, Assignee, as trustee, and BNY Western Trust
Company, as co-trustee, and BEAR XXXXXXX FINANCIAL PRODUCTS INC. ("Remaining
Party").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, effective as of March 27, 2002, Assignor desires to assign all
of its rights and delegate all of its duties and obligations to Assignee under
that certain Transaction (the "Assigned Transaction") as evidenced by the
certain confirmation and agreement dated March 18, 2002 whose reference number
is FXNCC4743 (the "Confirmation and Agreement"), a copy of which is attached
hereto as Exhibit I;
WHEREAS, Assignor and Remaining Party have executed and delivered the
Confirmation and Agreement in lieu of negotiating both an ISDA Master Agreement
(Multicurrency--Cross Border) form (the "ISDA Form Master Agreement") and a
Schedule thereto;
WHEREAS, Assignee desires to accept the assignment of rights and assume
the delegation of duties and obligations of the Assignor under the Assigned
Transaction, including any modifications agreed to by the parties; and
WHEREAS, Assignor desires to obtain the written consent of Remaining
Party to the assignment, delegation, and assumption and Remaining Party desires
to grant such consent in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Assignment and Assumption. Effective as of and from March 27, 2002
(the "Effective Date"), Assignor hereby assigns all of its rights and delegates
all of its duties and obligations to Assignee and Assignee hereby assumes all
Assignor's rights, duties, and obligations under the Assigned Transaction
arising on or after the Effective Date.
S-1
2. Release. Effective as of and from the Effective Date, Remaining
Party and Assignor hereby release one another from all duties and obligations
owed under and in respect of the Assigned Transaction, and Assignor hereby
terminates its rights under and in respect of the Assigned Transaction.
3. Limitation on Liability. Assignor and Remaining Party agree to the
following: (a) the sole recourse in respect of the obligations of Assignee
hereunder and under the Assigned Transaction shall be to the Trust Fund (as
defined in the Pooling and Servicing Agreement); (b) The Bank of New York
("BNY") is entering into this Assignment Agreement solely in its capacity as
trustee and not in its individual capacity under the Pooling and Servicing
Agreement; and (c) in no case shall BNY (or any person acting as successor
trustee under the Pooling and Servicing Agreement) be personally liable for or
on account of any of the statements, representations, warranties, covenants or
obligations stated to be those of Assignor under the terms of the Assigned
Transaction, all such liability, if any, being expressly waived by Assignor and
Remaining Party and any person claiming by, through or under either such party.
4. Consent and Acknowledgment of Remaining Party. Remaining Party
hereby consents to the assignment and delegation by Assignor to Assignee of all
the rights, duties, and obligations of Assignor under the Assigned Transaction
pursuant to this Assignment Agreement. In addition, Remaining Party hereby
acknowledges that the responsibilities of Assignee under the Assigned
Transaction will be performed on its behalf by Countrywide Home Loans Servicing
LP, as master servicer under the Pooling and Servicing Agreement.
5. Representations. Each party hereby represents and warrants to the
other parties as follows:
(a) It is duly organized, validly existing and in good standing under
the laws of its organization or incorporation;
(b) It has the power to execute and deliver this Assignment
Agreement; and
(c) Its obligations under this Assignment Agreement constitute its
legal, valid and binding obligations, enforceable in
accordance with their respective terms.
Each of Assignor and Remaining Party represents that no event or
condition has occurred that constitutes an Event of Default, a Potential Event
of Default or, to the party's knowledge, a Termination Event (as such terms are
defined in the Confirmation and Agreement), with respect to the party, and no
such event would occur as a result of the party's entering into or performing
its obligations under this Assignment Agreement.
6. Indemnity. Each of Assignor and Remaining Party hereby agrees to
indemnify and hold harmless Assignee with respect to any and all claims arising
under the Assigned Transaction prior to the Effective Date. Each of Assignee
(subject to the limitations set forth in paragraph 3 above) and Remaining Party
hereby agrees to indemnify and hold harmless Assignor with respect to any and
all claims arising under the Assigned Transaction on or after the Effective
Date.
S-2
7. Governing Law. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
8. Notices. For the purposes of this Assignment Agreement and Section
12(a) of the Assigned Transaction, the addresses for notices or communications
are as follows: (i) in the case of Assignor, Countrywide Home Loans, Inc., 0000
Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxx, with a copy to
the same address, Attention: Legal Department, or such other address as may be
hereafter furnished in writing to Assignee and Remaining Party; (ii) in the case
of Assignee, The Bank of New York, 0 Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Trust MBS Administration, CWABS, Series 2002-1, or
such other address as may be hereafter furnished in writing to Assignor and
Remaining Party; and (iii) in the case of Remaining Party, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: DPC Manager - Suite 1700, facsimile (212)
272-5823, with a copy to Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000,
facsimile (000) 000-0000, or such other address as may be hereafter furnished in
writing to Assignor and Assignee.
9. Payments. All payments remitted by Remaining Party under the
Assigned Transaction shall be made by wire transfer according to the following
instructions:
The Bank of New York,
New York, NY
ABA # 000-000-000
GLA # 111-565
For Further Credit: TAS A/C 081966
Attn: Xxxxx X. Xxxxxxx (000) 000-0000
10. Counterparts. This Assignment Agreement may be executed and
delivered in counterparts (including by facsimile transmission),
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same instrument.
S-3
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.
By:_______________________________________
Name: ____________________________________
Title: ___________________________________
THE BANK OF NEW YORK, NOT IN AN INDIVIDUAL
CAPACITY, BUT AS TRUSTEE FOR CWABS, INC.
ASSET BACKED CERTIFICATES, SERIES 2002-1
By: _______________________________________
Name:______________________________________
Title:_____________________________________
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By:________________________________________
Name:______________________________________
Title:______________________________________
S-4
