EXHIBIT 99.1
EXECUTION COPY
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CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
FEDERAL NATIONAL MORTGAGE ASSOCIATION,
Guarantor (with respect to the Class 1-A-1 Certificates)
and
THE BANK OF NEW YORK,
Trustee
______________________________________
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2002
______________________________________
ASSET-BACKED CERTIFICATES, SERIES 2002-2
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Table of Contents
Page
ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms..................................................................................5
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans..................................................................45
Section 2.02 Acceptance by Trustee of the Mortgage Loans...................................................51
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the Seller...............56
Section 2.04 Representations and Warranties of the Depositor...............................................71
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases...............73
Section 2.06 Authentication and Delivery of Certificates...................................................74
Section 2.07 Covenants of the Master Servicer..............................................................74
Section 2.08 Rights of the Guarantor.......................................................................74
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans.....................................................75
Section 3.02 Subservicing; Enforcement of the Obligations of Master Servicer; Special Servicer.............76
Section 3.03 Rights of the Depositor, the Guarantor, the Seller and the Trustee in Respect of the
Master Servicer............................................................................79
Section 3.04 Trustee to Act as Master Servicer.............................................................79
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account; Distribution Account;
Pre-Funding Account; Seller Shortfall Interest Requirement.................................80
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow Accounts...........................84
Section 3.07 Access to Certain Documentation and Information Regarding the Mortgage Loans..................84
Section 3.08 Permitted Withdrawals from the Certificate Account, Distribution Account and the Carryover
Reserve Fund...............................................................................84
Section 3.09 [Reserved]....................................................................................87
Section 3.10 Maintenance of Hazard Insurance...............................................................87
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................87
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and
Realized Losses; Repurchase of Certain Mortgage Loans.........................................89
Section 3.13 Trustee to Cooperate; Release of Mortgage Files...............................................92
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Section 3.14 Documents, Records and Funds in Possession of Master Servicer to be Held for the Trustee......93
Section 3.15 Servicing Compensation........................................................................93
Section 3.16 Access to Certain Documentation...............................................................94
Section 3.17 Annual Statement as to Compliance.............................................................94
Section 3.18 Annual Independent Public Accountants' Servicing Statement; Financial Statements..............95
Section 3.19 The Cap Contracts.............................................................................95
Section 3.20 Prepayment Charges............................................................................95
Section 3.21 Reports to the Guarantor; Certificate Account Statements......................................96
Section 3.22 Group 1 Mortgage Loans Subject to Relief Act..................................................96
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance Reports..................................................................97
Section 4.02 Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls.........98
Section 4.03 [Reserved]....................................................................................98
Section 4.04 Distributions.................................................................................98
Section 4.05 Monthly Statements to Certificateholders.....................................................104
Section 4.06 Xxxxxx Xxx Guaranty..........................................................................107
Section 4.07 [Reserved]...................................................................................107
Section 4.08 Carryover Reserve Fund.......................................................................107
ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates.............................................................................109
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates..................109
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............................................113
Section 5.04 Persons Deemed Owners........................................................................113
Section 5.05 Access to List of Certificateholders' Names and Addresses....................................113
Section 5.06 Book-Entry Certificates......................................................................114
Section 5.07 Notices to Depository........................................................................115
Section 5.08 Definitive Certificates......................................................................115
Section 5.09 Maintenance of Office or Agency..............................................................115
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01 Respective Liabilities of the Depositor, the Master Servicer and the Seller..................116
Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer or the Seller..................116
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Section 6.03 Limitation on Liability of the Depositor, the Seller, the Master Servicer,
the Guarantor and Others..................................................................116
Section 6.04 Limitation on Resignation of Master Servicer.................................................117
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds...............................................118
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of Default............................................................................118
Section 7.02 Trustee to Act; Appointment of Successor.....................................................120
Section 7.03 Notification to Certificateholders...........................................................121
ARTICLE VIII.
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee............................................................................122
Section 8.02 Certain Matters Affecting the Trustee........................................................123
Section 8.03 Trustee Not Liable for Mortgage Loans........................................................124
Section 8.04 Trustee May Own Certificates.................................................................124
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses...........................................124
Section 8.06 Eligibility Requirements for Trustee.........................................................125
Section 8.07 Resignation and Removal of Trustee...........................................................125
Section 8.08 Successor Trustee............................................................................126
Section 8.09 Merger or Consolidation of Trustee...........................................................127
Section 8.10 Appointment of Co-Trustee or Separate Trustee................................................127
Section 8.11 Tax Matters..................................................................................128
Section 8.12 [Reserved.]..................................................................................131
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage Loans.............................132
Section 9.02 Final Distribution on the Certificates.......................................................132
Section 9.03 Additional Termination Requirements..........................................................134
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment....................................................................................135
Section 10.02 Recordation of Agreement; Counterparts.......................................................136
Section 10.03 Governing Law................................................................................136
Section 10.04 Intention of Parties.........................................................................137
Section 10.05 Notices......................................................................................137
Section 10.06 Severability of Provisions...................................................................138
Section 10.07 Assignment...................................................................................139
Section 10.08 Limitation on Rights of Certificateholders...................................................139
Section 10.09 Inspection and Audit Rights..................................................................139
Section 10.10 Certificates Nonassessable and Fully Paid....................................................140
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EXHIBITS
EXHIBIT A Forms of Certificates
EXHIBIT A-1 Form of Class 1-A-1 Certificate
EXHIBIT A-2 Form of Class 2-A-I Certificate
EXHIBIT A-3 Form of Class 2-M-1 Certificate
EXHIBIT A-4 Form of Class M-2 Certificate
EXHIBIT A-5 Form of Class B-1 Certificate
EXHIBIT B Form of Class N Certificates
EXHIBIT C Form of Class X Certificate
EXHIBIT D Form of Class A-R Certificate
EXHIBIT E Form of Tax Matters Person Certificate
EXHIBIT F Mortgage Loan Schedules
EXHIBIT F-1 List of Mortgage Loans
EXHIBIT F-2 Initial Mortgage Loans for which All or a Portion of a
Related Mortgage File is not Delivered to the Trustee on or
prior to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Forms of Delay Delivery Certification
EXHIBIT 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 Form of Trustee Notice with respect to REMIC Provisions
EXHIBIT L Xxxxxx Mae Forms with respect to Relief Act Interest Shortfalls
EXHIBIT L-1 Xxxxxx Xxx Special Information Worksheet (for Military Indulgence)
EXHIBIT L-2 Xxxxxx Mae Form 180 Request For Military Indulgence
EXHIBIT M [Reserved]
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 Contracts
EXHIBIT S Form of Cap Contracts Assignment Agreement
SCHEDULE I Prepayment Charge Schedule and Prepayment Charge Summary
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POOLING AND SERVICING AGREEMENT, dated as of June 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"), FEDERAL NATIONAL MORTGAGE
ASSOCIATION, as Guarantor of the Class 1-A-1 Certificates (the "Guarantor"),
and THE BANK OF NEW YORK, a New York banking corporation, as trustee (the
"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 three real estate mortgage investment conduits (each a
"REMIC" or, in the alternative, the "Lower Tier REMIC," the "Upper Tier
REMIC," and the "X/N 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, the Upper Tier REMIC and the X/N
REMIC. The X/N REMIC is more fully described below. 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:
Uncertificated Uncertificated Lower REMIC Corresponding
Class Principal Balance Pass-Through Rate Certificate Class
LT-1-A-1 (1) (2) Class X-0
XX-0-X-0 (1) (3) Class 2-A-12
LT-2-M-1 (1) (3) Class 2-M-1
LT-M-2 (1) (4) Class M-2
LT-B-1 (1) (4) Class B-1
LT-Accrual (5) (6)
LT-$100 (1) (7) Class A-R
LT-AR (8) (8) Class A-R
(1) The Class LT-1-A-1 Interest, Class LT-2-A-1 Interest, Class LT-2-M-1 Interest, Class LT-M-2 Interest, Class LT-B-1 Interest and
Class LT-$100 Interest (each such class hereafter referred to as an "Accretion Directed Class") each have a principal balance
that is initially equal to 50% of its corresponding Certificate Class issued by the Upper Tier
REMIC. Principal payments, both scheduled and prepaid, Realized Losses, and interest accruing on the Class MT-Accrual Interest
will be allocated to each of the foregoing classes to maintain each Class' size relative to its Corresponding Certificate Class
(i.e., 50%) with any excess payments of principal and Realized Losses being allocated to the Class MT-Accrual Interest in such
manner as to cause the principal balance of the Class MT-Accrual Interest to have a principal balance equal to (a) 50% of the
Group 1 and Group 2 principal balances plus (b) 50% of the excess of the Group 1 and Group 2 principal balances over the sum of
the principal balances of the Class 1-A-1, Class 2-A-1, Class 2-M-1, Class M-2, Class B-1 and Class A-R Certificates for such
Distribution Date.
(2) The interest rate with respect to any Distribution Date (and the related Accrual Period) for the Class LT-A-1 Interests is a
per annum rate equal to the Net Rate Cap for the Class 1-A-1 Certificates.
(3) The interest rate with respect to any Distribution Date (and the related Accrual Period) for the Class LT-2-A-1 Interests and
the Class LT-2-M-1 Interests is a per annum rate equal to the Net Rate Cap for the Class 2-A-1 and Class 2-M-1 Certificates.
(4) The interest rate with respect to any Distribution Date (and the related Accrual Period) for the Class LT-M-2 Interests and the
Class LT-B-1 Interests is a per annum rate equal to the Net Rate Cap for the Class M-2 and Class B-1 Certificates.
(5) The principal balance of the Class LT-Accrual Interest initially equals the excess of the principal balance of the Group 1 and
Group 2 Mortgage Loans over the aggregate principal balance of the Class LT-1-A-1 Interest, Class LT-2-A-1 Interest, Class
LT-2-M-1 Interest, Class LT-M-2 Interest, Class LT-B-1 Interest and Class LT-$100 Interest.
(6) The interest rate with respect to any Distribution Date (and the related Accrual Period) for the Class LT-Accrual Interest is a
per annum rate (hereafter referred to as the "Pool WAC Rate") equal to the weighted average of the adjusted Net Mortgage Rates
in respect of each of the Mortgage Loans in Group 1 (reduced by the Adjusted Guaranty Fee Rate) and Group 2.
(7) The LT-$100 Interest does not pay any interest.
(8) The Class LT-AR Interest is 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 interest shall be distributed with respect
to each of the Lower Tier Interests based on the above-described
pass-through rates.
The following table specifies the class designation, interest rate,
and principal amount for each class of Upper Tier REMIC Interest:
Original Certificate Principal
Class Balance Pass-Through Rate
Class 1-A-1....................... $605,800,000 (1)
Class 2-A-1....................... $244,160,000 (2)
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Class 2-M-1....................... $ 16,800,000 (3)
Class M-2......................... $ 38,595,000 (4)
Class B-1......................... $ 24,645,000 (5)
Class UTR-X....................... (6) (6)(7)
Class A-R......................... $100 (8)
(1) Interest will accrue on the Class 1-A-1 Certificates during each Interest Accrual Period at a rate equal to the Class 1-A-1
Pass-Through Rate for such Distribution Date.
(2) Interest will accrue on the Class 2-A-1 Certificates during each Interest Accrual Period at a rate equal to the Class 2-A-1
Pass-Through Rate for such Distribution Date.
(3) Interest will accrue on the Class 2-M-1 Certificates during each Interest Accrual Period at a rate equal to the Class 2-M-1
Pass-Through Rate for such Distribution Date.
(4) Interest will accrue on the Class M-2 Certificates during each Interest Accrual Period at a rate equal to the Class M-2
Pass-Through Rate for such Distribution Date.
(5) Interest will accrue on the Class B-1 Certificates during each Interest Accrual Period at a rate equal to the Class B-1
Pass-Through Rate for such Distribution Date.
(6) For each Interest Accrual Period the Class UTR-X Certificates are entitled to a specified portion of the interest on the Group
1 and Group 2 Mortgage Loans equal to the excess of the Pool WAC Rate over the product of two and the weighted average of the
Lower Tier REMIC Regular Interests with the Lower Tier Accretion Directed Interests subject to a cap equal to the Pass-Through
Rate of the corresponding Certificate Class and the LT-Accrual Class subject to a cap of 0.00%. The Pass-Through Rate of the
Class UTR-X Interest shall be a rate sufficient to entitle it to all interest accrued on the Mortgage Loans less the interest
accrued on the other interests issued by the Upper Tier REMIC.
(7) For each Interest Accrual Period the Class UTR-X Certificates are entitled to Prepayment Charges with respect to the related
Accrual Period.
(8) The Class A-R Certificates are the sole class of residual interest in the Upper Tier REMIC. The Class A-R Certificates are not
entitled to distributions of interest.
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class UTR-X Interest as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as the "Class X/N REMIC". The Class X/N REMIC will issue the Class
X Interest, which is hereby designated a class of regular interest in the
Class X/N REMIC for federal income tax purposes. Interests in the Class X
Interest will be represented by the Class X and Class N Certificates, which
will be entitled to all payments in respect of the Class X Interest. The Class
X/N/R REMIC Residual Interest is hereby designated as the sole class of
residual interest in the Class X/N REMIC for federal income tax purposes. The
Class N Certificates will have an initial Notional Amount of $70,000,000 and a
per annum Pass-Through Rate of 8%. The Trustee will treat the Class N and
Class X Certificates as provided in Section 8.11 hereunder.
For any purpose for which the Net Rate Cap and the Adjusted Net
Mortgage Rate are calculated, the interest rate on the Mortgage Loans shall be
appropriately adjusted to account for the difference between the monthly day
count convention of the Mortgage Loans and the monthly day count convention of
the regular interests issued by the REMIC.
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For federal income tax purposes, the Trustee will treat each
reference in the preceding Preliminary Statement to the "Net Rate Cap" for the
Class M-2 Certificates, the Class B-1 Certificates, or both as a reference to
"the lesser of the Net Rate Cap and the Adjusted Net Rate Cap." The Trustee
will treat any entitlement of the Class M-2 Certificates or Class B-1
Certificates to monies in excess of the Adjusted Net Rate Cap under Section
4.04(b) herein as paid to the Class X Certificateholders, deposited by the
Class X Certificateholders in the Carryover Reserve Fund and then paid to each
of the Class M-2 Certificates or Class B-1 Certificates, as applicable.
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ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms.
In addition to those defined terms defined in Section 1.02, whenever
used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
Accrual Period: With respect to any Distribution Date and the
Certificates (other than the Class N and Class X Certificates), the period
commencing on the immediately preceding Distribution Date (or, in the case of
the first Distribution Date, the Closing Date) and ending on the day
immediately preceding such Distribution Date. With respect to any Distribution
Date and the Class N and Class X Certificates, the calendar month preceding
the month in which such Distribution Date occurs. All calculations of interest
on the Certificates (other than the Class X and Class N Certificates) will be
made on the basis of the actual number of days elapsed in the related Accrual
Period and on a 360 day year. All calculations of interest on the Class X and
Class N Certificates will be made on the basis of a 360-day year consisting of
twelve 30-day months.
Adjustable Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable in
accordance with the terms of the related Mortgage Note.
Adjusted Guaranty Fee Rate: For any Distribution Date, a per annum
rate equal to the Guaranty Fee Rate multiplied by a fraction the numerator of
which is the Certificate Principal Balance of the Class 1-A-1 Certificates
(prior to giving effect to distributions on such Distribution Date) and the
denominator of which is the Stated Principal Balances of the Mortgage Loans in
Loan Group 1.
Adjusted Maximum Mortgage Rate: With respect to (a) each Adjustable
Rate Mortgage Loan, the Maximum Mortgage Rate less the Expense Fee Rate and
(b) each Fixed Rate Mortgage Loan, the Mortgage Rate less the Expense Fee
Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage
Rate less the Expense Fee Rate.
Adjusted Net Rate Cap: For any Distribution Date, a per annum rate
equal to the weighted average of the Net Rate Caps for the Class 1-A-1, Class
2-A-1 and Class 2-M-1 Certificates for such Distribution Date, weighted on the
basis of the Adjusted Subordinate Group 1 Balance and Adjusted Subordinate
Group 2 Balance.
Adjusted Subordinate Group 1 Balance: For any Distribution Date, the
aggregate Stated Principal Balances of the Group 1 Mortgage Loans as of the
last day of the related Due Period, less the Certificate Principal Balance of
the Class A-1 Certificates less the product of (i) the Overcollateralized
Amount and (ii) the percentage equivalent of a fraction, the numerator of
which is (A) the sum of the aggregate Stated Principal Balance of the Group 1
Mortgage Loans
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and the Pre-Funded Amount allocable to Loan Group 1 and the denominator of
which is (B) the aggregate Stated Principal Balance of all Mortgage Loans and
the Pre-Funded Amount.
Adjusted Subordinate Group 2 Balance: For any Distribution Date, the
aggregate Stated Principal Balances of the Group 2 Mortgage Loans as of the
last day of the related Due Period less the Class Principal Balance of the
Class 2-A-1 and Class 2-M-1 Certificates less the product of (i) the
Overcollateralized Amount and (ii) the percentage equivalent of a fraction,
the numerator of which is (A) the sum of the aggregate Stated Principal
Balance of the Group 2 Mortgage Loans and the Pre-Funded Amount allocable to
Loan Group 2 and the denominator of which is (B) the aggregate Stated
Principal Balance of all Mortgage Loans and the Pre-Funded Amount.
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.
Amount Held for Future Distribution: As to any Distribution Date,
the aggregate amount held in the Certificate Account at the close of business
on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage
Loans due after the related Due Date and (ii) Principal Prepayments and
Liquidation Proceeds received in respect of such Mortgage Loans after the last
day of the related Prepayment Period or Due Period, respectively.
Applied Realized Loss Amount: With respect to any Distribution Date,
the sum of the Realized Losses with respect to the Mortgage Loans which are to
be applied in reduction of the Certificate Principal Balance of the
Subordinate Certificates pursuant to this Agreement, which shall equal the
amount, if any, by which, Certificate Principal Balance of all Certificates
(after all distributions of principal on such Distribution Date) exceeds the
sum of (x) the Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (y) the amount on deposit in the Pre-Funding Account, if
any.
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
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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.
Basic Principal Distribution Amount: With respect to each
Distribution Date and a Loan Group, the sum of (1) the Principal Remittance
Amount for such Loan Group for such Distribution Date, and (2) for the
Distribution Date immediately following the end of the Pre-Funding Period, any
amounts remaining in the Pre-Funding Account allocated to such Loan Group (net
of any investment income therefrom).
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 Xxxxxx Xxx or banking institutions in the State of Texas, 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: The First Cap Contract or the Second Cap Contract, as
applicable.
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: BNP Paribas.
Cap Contract Notional Balance: For each Cap Contract and each
Distribution Date identified below, the corresponding amount identified below:
First Cap Second Cap First Cap Second Cap
Contract Contract Contract Contract
Month of Notional Notional Month of Notional Notional
Payment Date Balances ($) Balances ($) Payment Date Balances ($) Balances ($)
--------------------- -------------- ------------- -------------------- -------------- -------------
July 2002........... 240,000,000.00 98,000,000.00 October 2003........ 192,658,781.33 79,988,860.33
August 2002......... 238,407,293.35 97,574,524.82 November 2003....... 189,311,595.14 78,596,680.67
September 2002...... 236,440,717.54 96,997,245.83 December 2003....... 186,021,049.52 77,228,385.66
October 2002........ 234,102,225.08 96,267,951.76 January 2004........ 182,786,199.27 75,883,043.23
November 2002....... 231,395,469.90 95,387,105.56 February 2004....... 179,606,114.88 74,560,447.79
December 2002....... 228,402,402.14 94,355,871.62 March 2004.......... 176,479,882.13 73,260,220.14
January 2003........ 225,127,481.34 93,182,374.47 April 2004.......... 173,406,602.09 71,981,984.34
February 2003....... 221,576,722.48 91,868,990.63 May 2004............ 170,385,390.61 70,725,382.64
March 2003.......... 217,757,559.43 90,419,078.90 June 2004........... 167,415,378.23 69,490,045.35
April 2003.......... 213,986,320.86 88,857,677.65 July 2004........... 164,495,709.89 40,965,372.46
May 2003............ 210,278,531.90 87,315,919.11 August 2004......... 96,975,326.81 40,249,056.01
June 2003........... 206,633,398.42 85,800,180.25 September 2004...... 95,282,433.40 39,544,872.03
July 2003........... 203,049,875.64 84,310,027.61 October 2004........ 93,618,257.73 38,852,618.09
August 2003......... 199,526,936.06 84,845,035.01 November 2004....... 91,982,319.94 38,172,095.10
September 2003...... 196,063,569.20 81,404,783.32 December 2004....... 90,374,148.13 37,503,107.29
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First Cap Second Cap First Cap Second Cap
Contract Contract Contract Contract
Month of Notional Notional Month of Notional Notional
Payment Date Balances ($) Balances ($) Payment Date Balances ($) Balances ($)
--------------------- -------------- ------------- -------------------- -------------- -------------
January 2005........ 88,793,278.18 36,845,462.09 April 2005.......... 84,209,953.24 34,938,704.39
February 2005....... 87,239,253.70 35,198,970.18 May 2005............ 82,733,801.78 34,324,567.29
March 2005.......... 85,711,625.84 35,563,445.33 June 2005........... 81,282,744.62 33,720,856.90
Cap Contract Termination Date: With respect to each Cap Contract,
the Distribution Date in June 2005.
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 2002-2". 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-5, Exhibit B, Exhibit C, 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 2002-2". Funds in the Certificate Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in
this Agreement.
Certificate Group: Any of the Group 1 Certificates or Group 2
Certificates.
Certificate Owner: With respect to a Book-Entry Certificate, the
person that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than the
Class N and Class X Certificates) and as of any Distribution Date, the Initial
Certificate Principal Balance of such Certificate less the sum of (i) all
amounts distributed with respect to such Certificate in reduction of the
Certificate Principal Balance thereof on previous Distribution Dates pursuant
to Section 4.04, and (ii) 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 N
and Class X Certificates do not have a Certificate Principal Balance. With
respect to any Certificate (other than the Class N and Class X Certificate) of
a Class and any Distribution Date, the portion of the Certificate Principal
Balance of such Class represented by such Certificate equal to the product of
the Percentage Interest evidenced by such Certificate and the Certificate
Principal Balance of such Class.
Certificate Register: The register maintained pursuant to Section
5.02 hereof.
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Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register (initially, Cede & Co., as nominee
for the Depository, in the case of any Class of Regular Certificates, except
that solely for the purpose of giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Depositor or any affiliate of
the Depositor shall be deemed not to be Outstanding and the Voting Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Voting Interests necessary to effect such consent has been
obtained; provided that if any such Person (including the Depositor) owns 100%
of the Voting Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof (other than the second sentence of Section 10.01 hereof) that requires
the consent of the Holders of Certificates of a particular Class as a
condition to the taking of any action hereunder. The Trustee is entitled to
rely conclusively on a certification of the Depositor or any affiliate of the
Depositor in determining which Certificates are registered in the name of an
affiliate of the Depositor.
Class: All Certificates bearing the same Class designation as set
forth in Section 5.01 hereof.
Class A-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 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 Margin: For any Distribution Date on or prior to the
Optional Termination Date, 1.800% per annum and, for any Distribution Date
after the Optional Termination Date, 2.700% per annum.
Class B-1 Net Rate Carryover Amount: For any Distribution Date on
which the Class B-1 Pass-Through Rate 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 have accrued for such Distribution Date had the Pass-Through
Rate for that Class not been determined based on the Net Rate Cap, over (ii)
the amount of interest accrued on the Class B-1 Certificates at the Net Rate
Cap for such Distribution Date and (B) the Class B-1 Net Rate Carryover Amount
for all previous Distribution Dates not previously paid pursuant to Section
4.04, together with interest thereon at the Pass-Through Rate (without giving
effect to the Net Rate Cap).
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Class B-1 Pass-Through Rate: For the first Distribution Date, 3.639%
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 1-A-1 and Class
2-A-1 Certificate Principal Balances (after taking into account distribution
of the Class A Principal Distribution Amount on such Distribution Date), (B)
the Class 2-M-1 Certificate Principal Balance (after taking into account
distribution of the Class 2-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) 98.50% of the
aggregate 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.
Class M-2 Margin: For any Distribution Date on or prior to the
Optional Termination Date, 1.150% per annum and, for any Distribution Date
after the Optional Termination Date, 1.725% per annum.
Class M-2 Net Rate Carryover Amount: For any Distribution Date on
which the Class M-2 Pass-Through Rate 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 have accrued for such Distribution Date had the Pass-Through
Rate for that Class not been determined based on the Net Rate Cap, over (ii)
the amount of interest accrued on the Class M-2 Certificates at the Net Rate
Cap for such Distribution Date and (B) the Class M-2 Net Rate Carryover Amount
for all previous Distribution Dates not previously paid pursuant to Section
4.04, together with interest thereon at the Pass-Through Rate (without giving
effect to the Net Rate Cap).
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Class M-2 Pass-Through Rate: For the first Distribution Date, 2.989%
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 1-A-1 and Class
2-A-1 Certificate Principal Balances (after taking into account distribution
of the Class 1-A-1 and Class 2-A-1 Principal Distribution Amounts on such
Distribution Date), (B) the Class 2-M-1 Certificate Principal Balance (after
taking into account distribution of the Class 2-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 of the Mortgage Loans for such
Distribution Date.
Class N Certificate: Any Certificate designated as a "Class N
Certificate" on the face thereof, in the form of Exhibit B hereto,
representing the right to distributions as set forth herein.
Class N Current Interest: For any Distribution Date, the interest
accrued on the Class N Notional Amount during the related Accrual Period at
the Class N Pass-Through Rate plus any amount previously distributed with
respect to interest for such Class that is recovered as a voidable preference
by a trustee in bankruptcy.
Class N Interest Carry Forward Amount: For any Distribution Date,
the excess of (a) the Class N Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class N
Certificates with respect to interest on such prior Distribution Dates.
Class N Notional Amount: As of any date of determination, an amount
equal to the Original Class N Notional Amount reduced by the aggregate
distributions of principal made to the Class N Certificates pursuant to
Section 4.04(e)(xi).
Class N Pass-Through Rate: For each Distribution Date, 8.00% per
annum.
Class X Certificate: Any Certificate designated as a "Class X
Certificate" on the face thereof, in the form of Exhibit C hereto,
representing the right to distributions as set forth herein.
Class X Distributable Amount: With respect to any Distribution Date,
the excess of (i) the aggregate of amounts distributable on the Class X
Interest for such Distribution Date as provided in the Preliminary Statement,
over (ii) the aggregate of amounts distributable to the Class N Certificates
pursuant to Section 4.04(e)(xi).
Class X Interest: As defined in the Preliminary Statement.
Class 1-A-1 Certificate: Any Certificate designated as a "Class
1-A-1 Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
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Class 1-A-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class 1-A-1
Certificates.
Class 1-A-1 Current Interest: For any Distribution Date, the
interest accrued on the Class 1-A-1 Certificate Principal Balance during the
related Accrual Period at the Class 1-A-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 0-X-0 Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx: For any Distribution
Date, the excess of (a) the Class 1-A-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 1-A-1
Certificates with respect to interest on such prior Distribution Dates.
Class 1-A-1 Margin: For any Distribution Date on or prior to the
Optional Termination Date, 0.120% per annum and, for any Distribution Date
after the Optional Termination Date, 0.240% per annum.
Class 1-A-1 Net Rate Carryover Amount: For any Distribution Date on
which the Class 1-A-1 Pass-Through Rate is based upon the Net Rate Cap, the
sum of (A) the excess of (i) the amount of interest the Class 1-A-1
Certificates would otherwise have accrued for such Distribution Date had the
Pass-Through Rate for that Class not been determined based on the Net Rate
Cap, up to but not exceeding the Maximum Rate, over (ii) the amount of
interest accrued on the Class 1-A-1 Certificates at the Net Rate Cap for such
Distribution Date and (B) the Class 1-A-1 Net Rate Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Pass-Through Rate, without giving effect
to the Net Rate Cap, up to but not exceeding the Maximum Rate.
Class 1-A-1 Pass-Through Rate: For the first Distribution Date,
1.959% per annum. For any Distribution Date thereafter, the lesser of (i)
One-Month LIBOR plus the Class 1-A-1 Margin, and (ii) the Net Rate Cap for
such Distribution Date.
Class 1-A-1 Principal Distribution Amount: For any Distribution
Date, the product of (x) a fraction, the numerator of which is the Principal
Remittance Amount for such Distribution Date attributable to the Mortgage
Loans in Loan Group 1 and the denominator of which is the Principal Remittance
Amount for such Distribution Date attributable to all Mortgage Loans and (y)
the excess of (i) the sum of (a) the Certificate Principal Balances of the
Class 1-A-1 and Class 2-A-1 Certificates immediately prior to such
Distribution Date, and (b) the Certificate Principal Balance of the Class
2-M-1 Certificates immediately prior to such Distribution Date, over (ii)
84.90% of the aggregate Stated Principal Balances of the Mortgage Loans for
such Distribution Date.
Class 2-A-1 Certificate: Any Certificate designated as a "Class
2-A-1 Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.
Class 2-A-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class 2-A-1
Certificates.
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Class 2-A-1 Current Interest: For any Distribution Date, the
interest accrued on the Class 2-A-1 Certificate Principal Balance during the
related Accrual Period at the Class 2-A-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 0-X-0 Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx: For any Distribution
Date, the excess of (a) the Class 2-A-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 2-A-1
Certificates with respect to interest on such prior Distribution Dates.
Class 2-A-1 Margin: For any Distribution Date on or prior to the
Optional Termination Date, 0.260% per annum and, for any Distribution Date
after the Optional Termination Date, 0.520% per annum.
Class 2-A-1 Net Rate Carryover Amount: For any Distribution Date on
which the Class 2-A-1 Pass-Through Rate is based upon the Net Rate Cap, the
sum of (A) the excess of (i) the amount of interest the Class 2-A-1
Certificates would otherwise have accrued for such Distribution Date had the
Pass-Through Rate for that Class not been determined based on the Net Rate
Cap, up to but not exceeding the Maximum Rate, over (ii) the amount of
interest accrued on the Class 2-A-1 Certificates at the Net Rate Cap for such
Distribution Date and (B) the Class 2-A-1 Net Rate Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Pass-Through Rate without giving effect
to the Net Rate Cap, up to but not exceeding the Maximum Rate.
Class 2-A-1 Pass-Through Rate: For the first Distribution Date,
2.099% per annum. For any Distribution Date thereafter, the lesser of (i)
One-Month LIBOR plus the Class 2-A-1 Margin, and (ii) the Net Rate Cap for
such Distribution Date.
Class 2-A-1 Principal Distribution Amount: For any Distribution
Date, the product of (x) a fraction, the numerator of which is the Principal
Remittance Amount for such Distribution Date attributable to the Mortgage
Loans in Loan Group 2 and the denominator of which is the Principal Remittance
Amount for such Distribution Date attributable to all Mortgage Loans and (y)
the excess of (i) the sum of (a) the Certificate Principal Balance of the
Class 1-A-1 Certificates immediately prior to such Distribution Date times a
fraction the numerator of which is the Certificate Principal Balance of the
Class 2-A-1 Certificates and the denominator of which is the Certificate
Principal Balance of the Group 2 Certificates, and (b) the Certificate
Principal Balance of the Class 2-A-1 Certificates immediately prior to such
Distribution Date, over (ii) 72.90% of the aggregate Stated Principal Balances
of the Mortgage Loans for such Distribution Date.
Class 2-M-1 Certificate: Any Certificate designated as a "Class
2-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 2-M-1 Certificate Principal Balance: As of any date of
determination, the Certificate Principal Balance of the Class 2-M-1
Certificates.
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Class 2-M-1 Current Interest: For any Distribution Date, the
interest accrued on the Class 2-M-1 Certificate Principal Balance during the
related Accrual Period at the Class 2-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 2-M-1 Interest Carry Forward Amount: For any Distribution
Date, the excess of (a) the Class 2-M-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class 2-M-1
Certificates with respect to interest on such prior Distribution Dates.
Class 2-M-1 Margin: For any Distribution Date on or prior to the
Optional Termination Date, 0.600% per annum and, for any Distribution Date
after the Optional Termination Date, 0.900% per annum.
Class 2-M-1 Net Rate Carryover Amount: For any Distribution Date on
which the Class 2-M-1 Pass-Through Rate is based upon the Net Rate Cap, the
sum of (A) the excess of (i) the amount of interest the Class 2-M-1
Certificates would otherwise have accrued for such Distribution Date had the
Pass-Through Rate for that Class not been determined based on the Net Rate
Cap, up to but not exceeding the Maximum Rate, over (ii) the amount of
interest accrued on the Class 2-M-1 Certificates at the Net Rate Cap for such
Distribution Date and (B) the Class 2-M-1 Net Rate Carryover Amount for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the Pass-Through Rate without giving effect
to the Net Rate Cap, up to but not exceeding the Maximum Rate.
Class 2-M-1 Pass-Through Rate: For the first Distribution Date,
2.439% per annum. For any Distribution Date thereafter, the lesser of (i)
One-Month LIBOR plus the Class 2-M-1 Margin, and (ii) the Net Rate Cap for
such Distribution Date.
Class 2-M-1 Principal Distribution Amount: For any Distribution Date
(1) the product of (x) a fraction, the numerator of which is the Principal
Remittance Amount for such Distribution Date attributable to the Mortgage
Loans in Loan Group 2 and the denominator of which is the Principal Remittance
Amount for such Distribution Date attributable to all Mortgage Loans and (y)
the excess of (i) the sum of (a) the Certificate Principal Balance of the
Class 1-A-1 and Class 2-A-1 Certificates immediately prior to such
Distribution Date and (b) the Certificate Principal Balance of the Class 2-M-1
Certificates immediately prior to such Distribution Date over (ii) 84.90% of
the aggregate Stated Principal Balances of the Mortgage Loans for such
Distribution Date, 1ess (2) the Class 2-A-1 Principal Distribution Amount.
Closing Date: June 28, 2002.
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.
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Compensating Interest: With respect to any Mortgage Loan, an amount
to be applied to the interest portion of a Prepayment Interest Shortfall on
such Mortgage Loan pursuant to Section 4.02 hereof which amount in the
aggregate in any month shall not exceed one half of the Servicing Fee.
Confirmation And Agreement: The Confirmation and Agreement dated
June 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 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (Attention: Corporate Trust MBS Administration), telephone:
(000) 000-0000, facsimile: (000) 000-0000.
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.
Cumulative Loss Trigger Event: With respect to a Distribution Date
after the Stepdown Date exists if the aggregate amount of Realized Losses on
the Mortgage Loans from (and including) the Cut-off Date for each Mortgage
Loan to (and including) the last day of the related Due Period exceeds the
applicable percentage, for such Distribution Date, of the Cut-off Date
Principal Balance of the Mortgage Loans, as set forth below:
Distribution Date Percentage
----------------- ----------
July 2005-- June 2006 .........................2.50%
July 2006-- June 2007 .........................3.75%
July 2007-- June 2008 .........................5.00%
July 2008 and thereafter.........................5.75%
Current Interest: With respect to each class of the Certificates and
each Distribution Date, the interest accrued at the applicable Pass-Through
Rate for the applicable Accrual Period on the Certificate Principal Balance of
such class, plus any amount previously distributed with respect to interest
for such class that is recovered as a voidable preference by a trustee in
bankruptcy.
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Cut-off Date: In the case of any Initial Mortgage Loan, the later of
(x) June 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.
Deficiency Amount: With respect to any Distribution Date, the sum of
(i) the Guaranteed Interest Distribution Amount and (ii) the Guaranteed
Principal Distribution Amount.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount
less than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy Code.
Delay Delivery Mortgage Loans: (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 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 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 Trustee as provided in Section 2.01, Countrywide Home Loans, Inc. shall
hold such files as agent and in trust for the Trustee.
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Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by
a Replacement Mortgage Loan.
Delinquency Trigger Event: With respect to any Distribution Date
after the Stepdown Date exists if the product of (i) 2.32 times (ii) the
fraction (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.
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.
Depository Agreement: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
O.
Depository Participant: A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the 15th
day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.
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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 2002-2". 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 July 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.
Early Payment Default Loan: Any Mortgage Loan with respect to which
the related Mortgagor has not made the Monthly Payment due July 1, 2002 within
60 days of such Due Date.
Eligible Account: Any of (i) an account or accounts maintained with
a federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, if Xxxxx'x is not a Rating Agency) are rated by each Rating
Agency in one of its two highest long-term and its highest short-term rating
categories respectively, at the time any amounts are held on deposit therein,
or (ii) an account or accounts in a depository institution or trust company in
which such accounts are insured by the FDIC (to the limits established by the
FDIC) and the uninsured deposits in which accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to
each Rating Agency, the Certificateholders have a claim with respect to the
funds in such account or a perfected first priority security interest against
any collateral (which shall be limited to Permitted Investments) securing such
funds that is superior to claims of any other depositors or creditors of the
depository institution or trust company in which such account is maintained,
or (iii) a trust account or accounts maintained with the corporate trust
department of a federal or state chartered depository institution or trust
company having capital and surplus of not less than $50,000,000, acting in its
fiduciary capacity or (iv) any other account acceptable to the Rating
Agencies. 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.
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ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the applicable requirements of
the Underwriter's Exemption.
ERISA-Restricted Certificates: The Class A-R Certificates, and any
class of Certificates that does not satisfy the applicable rating requirement
under the Underwriter's Exemption.
Event of Default: As defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the sum of
(i) the amount remaining after the distribution of interest to
Certificateholders for such Distribution Date pursuant to Section 4.04(a)(v),
and (ii) the amount remaining after the distribution of principal to
Certificateholders for such Distribution Date pursuant to Section
4.04(d)(i)(D) or 4.04(d)(ii)(D).
Excess Proceeds: With respect to any Liquidated Loan, any
Liquidation Proceeds that are in excess of the sum of (i) the unpaid principal
balance of such Liquidated Loan as of the date of such liquidation plus (ii)
interest at the Mortgage Rate from the Due Date as to which interest was last
paid or advanced to Certificateholders (and not reimbursed to the Master
Servicer) up to the Due Date in the month in which such Liquidation Proceeds
are required to be distributed on the Stated Principal Balance of such
Liquidated Loan outstanding during each Due Period as to which such interest
was not paid or advanced.
Expense Fee Rate: The sum of (i) the Servicing Fee Rate and (ii) the
Trustee Fee Rate.
Extra Principal Distribution Amount: With respect to any
Distribution Date and Loan Group, the lesser of (1) the Overcollateralization
Deficiency Amount for such Distribution Date multiplied by a fraction, the
numerator of which is the Principal Remittance Amount for such Loan Group and
the denominator of which is the Principal Remittance Amount for both Loan
Groups, and (2) the Loan Group Excess Cashflow Allocation Amount for such
Distribution Date available for payment thereof.
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.
Xxxxxx Xxx Guaranty: The obligation of Xxxxxx Mae specified in
Section 4.06.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
First Cap Contract: Collectively, the transactions evidenced by the
Confirmation And Agreement (as assigned to the Trustee pursuant to the Cap
Contract Assignment Agreement) with respect to the Group 1 Mortgage Loans, a
form of which is attached hereto as Exhibit R-1.
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Fixed Rate Mortgage Loans: The group of Mortgage Loans identified in
the Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the
life of the related Mortgage and any Credit Comeback Loans, including in each
case any Mortgage Loans delivered in replacement thereof.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Funding Period: The period from the Closing Date to and including
the earlier to occur of (x) the date the amount in the Pre-Funding Account is
less than $25,000 and (y) September 20, 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.
Group 1 Certificates: The Class 1-A-1 Certificates.
Group 1 Credit Comeback Excess Amount: The Credit Comeback Excess
Amount with respect to Group 1 Credit Comeback Loans.
Group 1 Credit Comeback Loan: Any Credit Comeback Loan in Group 1.
Group 1 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 1 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 2 Certificates: Any of the Class 2-A-1, Class 2-M-1 and Class
A-R Certificates.
Group 2 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 2 Mortgage Loans", including any
Mortgage Loans delivered in replacement thereof.
Guaranteed Certificates: The Class 1-A-1 Certificates.
Guaranteed Interest Distribution Amount: With respect to any
Distribution Date and the Guaranteed Certificates, the amount, if any, after
giving effect to the distributions of the Guarantor Reimbursement Amount to
the Guarantor, by which the (i) sum of (x) the Current Interest and the
Interest Carry Forward Amount payable on the Guaranteed Certificates for such
Distribution Date and (y) the Prepayment Interest Shortfalls (to the extent
required to be covered by Compensating Interest by the Master Servicer) and
the Relief Act Interest Shortfalls allocated to the Guaranteed Certificates
for such Distribution Date exceeds (ii) the amount of interest actually paid
to the Holders of the Guaranteed Certificates on such Distribution Date (prior
to giving effect to any Guarantor Payment on such Distribution Date).
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Guaranteed Principal Distribution Amount: With respect to any
Distribution Date the amount, if any, by which (i) the aggregate Certificate
Principal Balance of the Class 1-A-1 Certificates (after giving effect to the
application of payments of principal on the Class 1-A-1 Certificates but prior
to giving effect to any Guarantor Payment on such Distribution Date) exceeds
(ii) the aggregate Stated Principal Balance of the Group 1 Mortgage Loans for
such Distribution Date.
Guarantor: Xxxxxx Xxx, or its successor in interest.
Guarantor Interest Reimbursement Amount: With respect to any
Distribution Date, the sum of (i) any accrued but unpaid Guaranty Fees, not
including the Guaranty Fee due on such Distribution Date, and (ii) the sum of
all amounts paid by the Guarantor in respect of the Guaranteed Interest
Distribution Amounts on all prior Distribution Dates to the extent not
previously reimbursed.
Guarantor Payment: Any payment made by the Guarantor in respect of a
Guaranteed Interest Distribution Amount or a Guaranteed Principal Distribution
Amount.
Guarantor Principal Reimbursement Amount: With respect to any
Distribution Date, the sum of all amounts paid by the Guarantor in respect of
Guaranteed Principal Distribution Amounts on all prior Distribution Dates to
the extent not previously reimbursed.
Guarantor Reimbursement Amount: With respect to any Distribution
Date, the sum of Guarantor Interest Reimbursement Amount and the Guarantor
Principal Reimbursement Amount.
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.
Initial Certificate Principal Balance: With respect to any
Certificate (other than the Class N and Class X Certificate) the Certificate
Principal Balance of such Certificate or any predecessor Certificate on the
Closing Date.
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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.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
(other than Xxxxxx Mae under the Xxxxxx Xxx Guaranty) pursuant to any
Insurance Policy or any other insurance policy covering a Mortgage Loan, to
the extent such proceeds are payable to the mortgagee under the Mortgage, the
Master Servicer or the trustee under the deed of trust and are not applied to
the restoration of the related Mortgaged Property or released to the Mortgagor
in accordance with the procedures that the Master Servicer would follow in
servicing mortgage loans held for its own account, in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Interest Carry Forward Amount: With respect to each class of the
Certificates (other than the Class X and Class A-R Certificates) and each
Distribution Date, the excess of (i) the Current Interest for such class with
respect to prior Distribution Dates over (ii) the amount actually distributed
to such class with respect to interest on such prior Distribution Dates.
Interest Determination Date: With respect to the first Accrual
Period, June 26, 2002. With respect to 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 related Cap Contract, less the Trustee Fee for the Mortgage
Loans.
Interest Rate Cap Agreement: An interest rate cap contract referred
to in the last paragraph of Section 8.11 and all related provisions of this
Agreement.
Interest Remittance Amount: With respect to the Mortgage Loans in
each Loan Group 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 July, August,
September or October 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 June 2032.
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Lender Letter: As defined in Section 2.03(b)(1xv).
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 Group: Any of the Group 1 Mortgage Loans or Group 2 Mortgage
Loans.
Loan Group Characteristics: The characteristics for each Loan Group
identified under the caption "The Mortgage Pool--Loan Characteristics" in the
Prospectus Supplement.
Loan Group 1 Deficiency Amount: The excess, if any, of the
Certificate Principal Balance of the Class 1-A-1 Certificates over the
Stated Principal Balance of the Mortgage Loans in Loan Group 1.
Loan Group 2 Deficiency Amount: The excess, if any, of the
Certificate Principal Balance of the Class 2-A-1 and Class 2-M-1 Certificates
over the Stated Principal Balance of the Mortgage Loans in Loan Group 2.
Loan Group Excess Cashflow Allocation Amount: With respect to any
Distribution Date and Loan Group, the product of (i) the Excess Cashflow for
such Distribution Date multiplied by (ii) a fraction, the numerator of which
is the Principal Remittance Amount for such Loan Group for such Distribution
Date and the denominator of which is the sum of the Principal Remittance
Amount for both Loan Groups.
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Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Majority Holder: The Holders of Certificates evidencing at least 51%
of the Voting Rights allocated to such Class of Certificates.
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.
Master Servicer Prepayment Charge Payment Amount: The amounts (i)
payable by the Master Servicer in respect of any Prepayment Charges waived
other than in accordance with the standard set forth Section 3.20, or (ii)
collected from the Master Servicer in its capacity as Seller in respect of a
remedy for the breach of the covenant made by the Master Servicer in its
capacity as Seller set forth in Section 3.20.
Master Servicer Remittance Date: With respect to any Distribution
Date, 3:00 p.m. New York time on the Business Day prior to the 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: With respect to any Distribution Date, the sum of (a)
weighted average Adjusted Maximum Mortgage Rate of the Mortgage Loans times a
fraction (not less than one), the numerator of which is the aggregate Stated
Principal Balances of the Mortgage Loans for such Distribution Date and the
denominator of which is the aggregate Certificate Principal Balances of the
Class 1-A-1, Class 2-A-1, Class A-R, Class 2-M-1, Class M-2 and Class B-1
Certificates on such Distribution Date (prior to giving effect to
distributions on such Distribution Date), and (b) a fraction, expressed as a
percentage, the numerator of which is the product of the aggregate amount
received in respect of both Cap Contracts for such Distribution Date times
twelve, and the denominator of which is the aggregate Certificate Principal
Balances of the Class 1-A-1, Class 2-A-1, Class A-R, Class 2-M-1, Class M-2
and Class B-1 Certificates on such Distribution Date (prior to giving effect
to distributions on such Distribution Date), adjusted, in the case of the rate
calculated by each of clause (a) and (b), to an effective rate reflecting the
calculation of interest on the basis of the actual number of days elapsed
during the related interest accrual period and a 360-day year.
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.
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MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.
MOM Loan: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is
payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation
and/or Debt Service Reduction with respect to such Mortgage Loan and (ii) any
reduction in the amount of interest collectible from the related Mortgagor
pursuant to the Relief Act; (b) without giving effect to any extension granted
or agreed to by the Master Servicer pursuant to Section 3.01; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are
paid when due.
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 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 in
the following information with respect to each Mortgage Loan:
(I) the loan number;
(II) the Loan Group;
(III) the Appraised Value;
(IV) the Initial Mortgage Rate;
(V) the maturity date;
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(VI) the original principal balance;
(VII) the Cut-off Date Principal Balance;
(VIII) the first payment date of the Mortgage Loan;
(IX) the Scheduled Payment in effect as of the Cut-off
Date;
(X) the Loan-to-Value Ratio or Combined Loan-to-Value
Ratio, as applicable, at origination;
(XI) a code indicating whether the residential dwelling
at the time of origination was represented to be
owner-occupied;
(XII) 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;
(XIII) with respect to each Group 1 Mortgage Loan, a code
indicating whether such Mortgage Loan is a Credit
Comeback Loan;
(XIV) with respect to each Adjustable Rate Mortgage Loan:
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Periodic Rate Cap;
(g) the Gross Margin; and
(h) the purpose of the Mortgage Loan; and
(XV) a code indicating whether the Mortgage Loan is
subject to the Oakland Ordinance.
Such schedule shall also set forth the total of the amounts described under
(vii) above for all of the Mortgage Loans and each Loan Group. The Mortgage
Loan Schedule shall be deemed to include 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.
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Mortgage Loans: Such of the Group 1 Mortgage Loans and Group 2
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 part of the Trust Fund (including any REO Property), the mortgage
loans so held being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property.
Any mortgage loan that was intended by the parties hereto to be transferred to
the Trust Fund as indicated by such Mortgage Loan Schedule which is in fact
not so transferred for any reason including, without limitation, a breach of
the representation contained in Section 2.02(b)(v) hereof, shall continue to
be a Mortgage loan hereunder until the Purchase Price with respect thereto has
been paid to the Trust Fund.
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, the Maximum
Rate 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.
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: (i) With respect to the Class 1-A-1 Certificates, (a)
for any Distribution Date on which the Stated Principal Balance of the
Mortgage Loans in Loan Group 1 is equal to or greater than the Certificate
Principal Balance of the Class 1-A-1 Certificates immediately prior to such
Distribution Date, the weighted average Adjusted Net Mortgage Rate on the
Mortgage Loans in Loan Group 1 less the Adjusted Guaranty Fee or (b) for any
Distribution Date on which the Certificate Principal Balance of the Class
1-A-1 Certificates is greater than the Stated Principal Balance of the
Mortgage Loans in Loan Group 1 immediately prior to such Distribution Date,
the weighted average of (x) the weighted average of the Adjusted Net Mortgage
Rate on the Mortgage Loans in Loan Group 1 less the Adjusted Guaranty Fee Rate
(weighted on the basis of the Stated Principal Balance of the Group 1 Mortgage
Loans) and (y) the weighted average of the Adjusted Net Mortgage Rate on the
Mortgage Loans in Loan Group 2 (weighted on the basis of the Loan Group 1
Deficiency Amount), (ii) with respect to the Class 2-A-1 and 2-M-1
Certificates, (a) for any Distribution Date on which the Stated Principal
Balance of the Mortgage Loans in Loan Group 2 is equal to or greater than the
Certificate Principal Balance of the Class 2-A-1 and Class 2-M-1 Certificates,
the weighted average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan
Group 2 or (b) for any Distribution
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Date on which the Certificate Principal Balance of the Class 2-A-1 and Class
2-M-1 Certificates is greater than the Stated Principal Balance of the
Mortgage Loans in Loan Group 2, the weighted average of (x) the weighted
average of the Adjusted Net Mortgage Rate on the Mortgage Loans in Loan Group
2 (weighted on the basis of the Stated Principal Balance of the Group 2
Mortgage Loans) and (y) the weighted average of the Adjusted Net Mortgage Rate
on the Mortgage Loans in Loan Group 1 (weighted on the basis of the Loan Group
2 Deficiency Amount) and (iii) with respect to the Class M-2 and Class B-1
Certificates, the weighted average Adjusted Net Mortgage Rate of the Mortgage
Loans in Loan Group 1 less the Adjusted Guaranty Fee Rate (weighted by an
amount equal to the positive difference (if any) of the Stated Principal of
the Mortgage Loans in Loan Group 1 over the outstanding Certificate Balance of
the Class 1-A-1 Certificates) and the Adjusted Mortgage Rate of the Mortgage
Loans in Loan Group 2 (weighted by an amount equal to the positive difference
(if any) of the Stated Principal of the Mortgage Loans in Loan Group 2 over
the outstanding Certificate Balance of the Class 2-A-1 and Class 2-M-1
Certificates), in the case of each of (i), (ii) and ( iii), adjusted to an
effective rate reflecting the calculation of interest on the basis of the
actual number of days elapsed during the related interest accrual period and a
360-day year.
Net Rate Carryover: The Class 1-A-1 Net Rate Carryover, the Class
2-A-1 Net Rate Carryover, the Class 2-M-1 Net Rate Carryover, the Class M-2
Net Rate Carryover or the Class B-1 Net Rate Carryover, as applicable.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not or, in the case of a current delinquency, would
not, be ultimately recoverable by the Master Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.
Non-United States Person : A Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a 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.
Notional Amount: With respect to the Class N Certificates, an amount
equal to the Original Class N Notional Amount reduced by the aggregate
distributions made to the Class N Certificates pursuant to Section
4.04(e)(xi).
Oakland Ordinance: As defined in Section 2.03(b)(lxxii).
OC Floor: For any Distribution Date, 0.50% of the sum of the Stated
Principal Balance of the Initial Mortgage Loans as of the Cut-off Date plus
the amount deposited in the Pre-Funding Account on the Closing Date.
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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 1.839% per
annum. If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered,
such other service for displaying One-Month LIBOR or comparable rates as may
be reasonably selected by the Trustee), One-Month LIBOR for the applicable
Accrual Period will be the Reference Bank Rate. If no such quotations can be
obtained by the Trustee and no Reference Bank Rate is available, One-Month
LIBOR will be One-Month LIBOR applicable to the preceding Accrual Period.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or
10.01, or the interpretation or application of the REMIC Provisions, such
counsel must (i) in fact be independent of the Depositor and the Master
Servicer, (ii) not have any direct financial interest in the Depositor or the
Master Servicer or in any affiliate of either, and (iii) not be connected with
the Depositor or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar
functions.
Optional Termination: The termination of the Trust Fund provided
hereunder pursuant to the purchase of the Mortgage Loans pursuant to the last
sentence of Section 9.01 hereof.
Optional Termination Date: The first Distribution Date on which the
Stated Principal Balance of the Mortgage Loans is less than or equal to 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 Class N Notional Amount: The Notional Amount of the Class N
Certificates on the Closing Date, as set forth opposite such Class in the
Preliminary Statement.
Original Mortgage Loan: The mortgage loan refinanced in connection
with the origination of a Refinancing Mortgage Loan.
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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.
Overcollateralized Amount: For any Distribution Date, the amount, if
any, by which (x) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period exceeds (y) the sum of the
aggregate Class Certificate Balances of the Class 1-A-1, Class 2-A-1, Class
2-M-1, Class M-2 and Class B-1 Certificates as of such Distribution Date
(after giving effect to distributions in respect of the Basic Principal
Distribution Amount on such Distribution Date).
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization
Target Amount exceeds the Overcollateralized Amount on such Distribution Date
(after giving effect to distributions in respect of the Basic Principal
Distribution Amount on such Distribution Date).
Overcollateralization Target Amount: (a) On the Closing Date and
each date prior to the Stepdown Date, an amount equal to 0.75% of the sum of
the Initial Cut-off Date Principal Balance of the Initial Mortgage Loans plus
the amount deposited in the Pre-Funding Account on the Closing Date, and (b)
on and after the Stepdown Date, an amount equal to 1.50% of the Stated
Principal Balances of the Mortgage Loans in the Mortgage Pool for the current
Distribution Date, subject to a minimum amount equal to the OC Floor;
provided, however, that, if on any Distribution Date, a Trigger Event has
occurred, the Overcollateralization Target Amount shall be the
Overcollateralization Target Amount on the Closing Date.
Ownership Interest: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
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Pass-Through Rate: The Class 1-A-1 Pass-Through Rate, the Class
2-A-1 Pass-Through Rate, the Class 2-M-1 Pass-Through Rate, the Class M-2
Pass-Through Rate, the Class B-1 Pass-Through Rate or the Class N Pass-Through
Rate, as applicable.
Percentage Interest: With respect to any Certificate (other than the
Class N, Class X or Class A-R Certificates), a fraction, expressed as a
percentage, the numerator of which is the Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
Certificate Principal Balance of the related Class. With respect to the Class
N Certificate, a fraction, expressed as a percentage, the numerator of which
is the Notional Amount represented by such Certificate and the denominator of
which is the aggregate Notional Amount of the Class N Certificates. With
respect to the Class X and Class A-R Certificates, the portion of the Class
evidenced thereby, expressed as a percentage, as stated on the face of such
Certificate.
Periodic Rate Cap: As to substantially all Adjustable Rate Mortgage
Loans and the related Mortgage Notes, the provision therein that limits
permissible increases and decreases in the Mortgage Rate on any Adjustment
Date to not more than three percentage points.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of the
United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower rating
as each Rating Agency has confirmed in writing will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by such Rating Agency;
(iii) [Reserved];
(iv) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of each
Rating Agency, or such lower rating as each Rating Agency has confirmed
in writing will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by such Rating Agency;
(v) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any state
thereof and subject to supervision and examination by federal and/or
state banking authorities, provided that the commercial paper and/or long
term unsecured debt obligations of such depository institution or trust
company (or in the case of the principal depository institution in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company, but only if Xxxxx'x is not a Rating
Agency) are then rated one of the two highest long-term and the highest
short-term ratings of each such Rating Agency for such securities, or
such lower ratings as each Rating Agency has confirmed in writing will
not
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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 Master Servicer but not yet deposited
in the Certificate Account) may be
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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 $57,866,645.14.
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 2002-2." 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.
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof (other than any Master
Servicer Prepayment Charge Payment Amount).
Prepayment Charge Schedule: As of the Cut-off Date, a list attached
hereto as Schedule I (including the Prepayment Charge Summary attached
thereto), setting forth the following information with respect to each
Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on the
related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of the
Cut-off Date.
The Prepayment Charge Schedule shall be amended from time to time by
the Master Servicer in accordance with the provisions of this Agreement and a
copy of each related amendment shall be furnished by the Master Servicer to
the Guarantor and the Class N and Class X Certificateholders.
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.
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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.
Principal Distribution Amount: With respect to each Distribution
Date and a Loan Group, the sum of (i) the Extra Principal Distribution Amount
for such Loan Group such Distribution Date, (ii) the Principal Remittance
Amount for such Loan Group for such Distribution Date, and (iii) for the
Distribution Date immediately following the end of the Funding Period, any
amounts remaining in the Pre-Funding Account allocated to such Loan Group
after the end of the Funding Period (net of any investment income therefrom).
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: With respect to each Loan Group, 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.
Proportionate Holder: As defined in Section 8.11.
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Prospectus Supplement: The Prospectus Supplement dated June 19,
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 or the Guarantor 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: Xxxxx'x and S&P. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Loan, an amount (not
less than zero or more than the Stated Principal Balance of the Mortgage Loan)
as of the date of such liquidation, equal to (i) the Stated Principal Balance
of such Liquidated Loan as of the date of such liquidation, minus (ii) the
Liquidation Proceeds, if any, received in connection with such liquidation
during the month in which such liquidation occurs, to the extent applied as
recoveries of principal of the Liquidated Loan. With respect to each Mortgage
Loan that has become the subject of a Deficient Valuation, (i) if the value of
the related Mortgaged Property was reduced below the principal balance of the
related Mortgage Note, the amount by which the value of the Mortgaged Property
was reduced below the principal balance of the related Mortgage Note, and (ii)
if the principal amount due under the related Mortgage Note has been reduced,
the difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation plus any reduction in the
interest component of the Scheduled Payments. With respect to each Mortgage
Loan that has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the related Scheduled Payment
was reduced.
Record Date: With respect to any Distribution Date and the
Certificates other than the Class A-R, Class N and Class X Certificates, the
Business Day immediately preceding such Distribution Date, or if such
Certificates are no longer Book-Entry Certificates, the last Business Day of
the month preceding the month of such Distribution Date. With respect to the
Class A-R, Class N and Class X Certificates, the last Business Day of the
month preceding the month of a Distribution Date.
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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 1-A-1, Class 2-A-1, Class A-R, Class
2-M-1, Class M-2 and Class B-1 Certificates on such Interest Determination
Date, provided that at least two such Reference Banks provide such rate. If
fewer than two offered rates appear, the Reference Bank Rate will be the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple
of 0.03125%) of the rates quoted by one or more major banks in New York City,
selected by the Trustee, as of 11:00 a.m., New York City time, on such date
for loans in U.S. dollars to leading European banks for a period of one month
in amounts approximately equal to the outstanding balance of the Class 1-A-1,
Class 2-A-1, Class 2-M-1, Class M-2 and Class B-1 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.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificate: Any Certificate other than the Class A-R
Certificate.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Interest Shortfall: With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction
in the amount of interest collectible thereon for the most recently ended Due
Period as a result of the application of the Relief Act, the amount by which
(i) interest collectible on such Mortgage Loan during such Due Period is less
than (ii) one month's interest on the Principal Balance of such Mortgage Loan
at the Mortgage Rate for such Mortgage Loan before giving effect to the
application of the Relief Act.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at Section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Report: A report by the Master Servicer and delivered to
the Guarantor and the Trustee pursuant to Section 4.01.
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.
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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 Group 1 Mortgage Loan, have a Mortgage Rate not
less than or no more than 1% per annum higher than the Mortgage Rate of the
Deleted Mortgage Loan and, with respect to any Adjustable Rate Mortgage Loan:
(a) have a Maximum Mortgage Rate no more than 1% per annum higher or lower
than the Maximum Mortgage Rate of the Deleted Mortgage Loan; (c) have the same
Index and Periodic Rate Cap as that of the Deleted Mortgage Loan; and (d) not
permit conversion of the related Mortgage Rate to a fixed Mortgage Rate; (iii)
have the same or higher credit quality characteristics than that of the
Deleted Mortgage Loan; (iv) be accruing interest at a rate not more than 1%
per annum higher or lower than that of the Deleted Mortgage Loan; (v) have a
Loan-to-Value Ratio or Combined Loan-to-Value Ratio, as applicable, no higher
than that of the Deleted Mortgage Loan; (vi) not permit conversion of the
Mortgage Rate from a fixed rate to a variable rate or visa versa; (viii)
provide for a prepayment charge on terms substantially similar to those of the
Prepayment Charge, if any, of the Deleted 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) with respect to any Group 1 Mortgage
Loan, have had an original Stated Principal Balance that conformed to the loan
limits of the Guarantor, (xii) be otherwise acceptable to the Guarantor, and
(xiii) 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 a Distribution Date after the
Stepdown Date, the fraction (expressed as a percentage) of (1) the excess of
(a) the aggregate Stated Principal Balance of the Mortgage Loans for the
preceding Distribution Date over (b) (i) before the Certificate Principal
Balances of the Class 1-A-1 and Class 2-A-1 Certificates have been reduced to
zero, the sum of (x) the product of the Certificate Principal Balance of the
Class 1-A-1 Certificates times a fraction the numerator of which is the
Certificate Principal Balance of the Class 2-A-1 Certificates and the
denominator of which is the sum of Certificate Principal Balances of the Class
2-A-1 and Class 2-M-1 Certificates and (y) the Certificate Principal Balance
of the Class 2-A-1 Certificates, or (ii) after such time, the Certificate
Principal Balance of the most senior class of Certificates outstanding as of
the preceding Master Servicer Advance Date divided by (2) the aggregate Stated
Principal Balance of the Mortgage Loans for the preceding Distribution Date.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such
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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.
Second Cap Contract: Collectively, the transactions evidenced by the
Confirmation And Agreement (as assigned to the Trustee pursuant to the Cap
Contract Assignment Agreement) with respect to the Group 2 Mortgage Loans, a
form of which is attached hereto as Exhibit R-2.
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.
Seller: Countrywide Home Loans, Inc., a New York corporation, and
its successors and assigns, in its capacity as seller of the Mortgage Loans to
the Depositor.
Seller Shortfall Interest Requirement: For any Loan Group with
respect to any Master Servicer Advance Date in July, August, September or
October 2002, the product of: (1) the excess of the aggregate Stated Principal
Balance of the Mortgage Loans in such Loan Group (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 allocable to such Loan Group, over the aggregate Stated Principal
Balance of the Mortgage Loans in such Loan Group (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 (2) a fraction, the
numerator of which is the weighted average Adjusted Net Mortgage Rates of the
Mortgage Loans in such Loan Group (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 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.
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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.
Special Servicer: As defined in Section 3.02(c).
Specially Serviced Mortgage Loan: As defined in section 3.02(c).
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 a Loan Group at any time shall mean the aggregate Stated Principal
Balance of all Mortgage Loans in such Loan Group at such time.
Stepdown Date: The later to occur of (i) the Distribution Date in
July 2005 or (ii) the first Distribution Date on which the Certificate
Principal Balance of the Class 1-A-1, Class 2-A-1 and Class 2-M-1 Certificates
(after calculating anticipated distributions on such Distribution Date) is
less than or equal to 84.90% of the aggregate Stated Principal Balances of the
Mortgage Loans for such Distribution Date.
Subordinate Certificates: The Class 2-M-1, Class M-2 and Class B-1
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.
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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 Group 1 Purchase
Amount and the Subsequent Transfer Date Group 2 Purchase Amount for such
Subsequent Transfer Date.
Subsequent Transfer Date Group 1 Purchase Amount: With respect to
any Subsequent Transfer Date, the "Subsequent Transfer Date Group 1 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 that are to be
included in Loan Group 1.
Subsequent Transfer Date Group 2 Purchase Amount: With respect to
any Subsequent Transfer Date, the "Subsequent Transfer Date Group 2 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 that are to be
included in Loan Group 2.
Subsequent Transfer Date Group 1 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 that are to be included in Loan Group 1, 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
allocated to purchase Subsequent Mortgage Loans to be included in Loan Group
1.
Subsequent Transfer Date Group 2 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 that are to be included in Loan Group 2, as
listed on the related Loan Number and Borrower Identification Mortgage Loan
Schedule delivered pursuant to Section 2.01(f); provided, however,
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that such amount shall not exceed the amount on deposit in the Pre-Funding
Account allocated to purchase Subsequent Mortgage Loans to be included in Loan
Group 2.
Subsequent Transfer Date Transfer Amount: With respect to any
Subsequent Transfer Date, the Subsequent Transfer Date Group 1 Transfer Amount
and the Subsequent Transfer Date Group 2 Transfer Amount for such Subsequent
Transfer Date.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(c).
Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(c), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation Section 1.860F-4(d) and
temporary Treasury regulation Section 301.6231(a)(7)-1T. Initially, this
person shall be the Trustee.
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.05.
Terminator: As defined in Section 9.01.
Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage
Rate that is fixed for 36 months after origination thereof before such
Mortgage Rate becomes subject to adjustment.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Trigger Event: With respect to any Distribution Date after the
Stepdown Date, either a Delinquency Trigger Event or a Cumulative Loss Trigger
Event.
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto on and after the Cut-off Date to the extent not applied in
computing the Cut-off Date Principal Balance thereof, exclusive of interest
not required to be deposited in the Certificate Account pursuant to Section
3.05(b)(ii); (ii) the Certificate Account, the Distribution Account, the
Pre-Funding Account, 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.
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Trustee: The Bank of New York, a New York banking corporation, not
in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the 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.
Unpaid Interest Shortfall Amount. With respect to the Certificates
and (i) the first Distribution Date, zero, and (ii) any Distribution Date
after the first Distribution Date, the amount, if any, by which (a) the sum of
the (1) the Monthly Interest Distributable Amount for such Class of
Certificates for the immediately preceding Distribution Date and (2) the
outstanding Unpaid Interest Shortfall Amount, if any, for such Class of
Certificates for such preceding Distribution Date exceeds (b) the aggregate
amount distributed on such Class of Certificates in respect of interest
pursuant to clause (a) of this definition on such preceding Distribution Date,
plus interest on the amount of interest due but not paid on such Class of
Certificates on such preceding Distribution Date, to the extent permitted by
law, at the Pass-Through Rate for such Class of Certificates for the related
Accrual Period.
Underwriter's Exemption: Prohibited Transaction Exemption 2000-58,
65 Fed. Reg. 67765 (2000), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.
Unpaid Realized Loss Amount: For any class of Certificates (other
than the Class A-R, Class N and Class X Certificates), the portion of the
aggregate Applied Realized Loss Amount previously allocated to that class
remaining unpaid from prior Distribution Dates.
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 97% to the Certificates other than the Class A-R, Class N
and Class X Certificates (with the allocation among the Certificates to be in
proportion to the Certificate Principal Balance of each Class relative to the
Certificate Principal Balance
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of all other such Classes), and 1% to each of the Class A-R, Class N and Class
X Certificates. Voting Rights will be allocated among the Certificates of each
such Class in accordance with their respective Percentage Interests.
Notwithstanding any of the foregoing, on any date on which any Guaranteed
Certificates are outstanding or any amounts are owed the Guarantor under this
Agreement, all of the Voting Rights allocated to the Guaranteed Certificates
shall be vested in the Guarantor.
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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.
The Seller further agrees to assign all of its right, title and
interest in and to the interest rate cap transaction evidenced by each
Confirmation And Agreement, 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 each 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.
(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
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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 30 or more days delinquent;
(vii) following the conveyance of all the Subsequent Mortgage Loans
on such Subsequent Transfer Date, the Loan Group will have
characteristics that fall within the Loan Group Characteristics; provided
that for the purpose of making such calculations, the characteristics for
any Initial Mortgage Loan will be taken as of the Initial Cut-off
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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 Trustee (or, in
the case of the Delay Delivery Mortgage Loans, will deliver to, and deposit
with, the Trustee within the time periods specified in the definition of Delay
Delivery Mortgage Loans) (except as provided in clause (vi) below) for the
benefit of the Certificateholders, the following documents or instruments with
respect to each such Mortgage Loan so assigned (with respect to each Mortgage
Loan, clause (i) through (vi) below, together, the "Mortgage File" for each
such Mortgage Loan):
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(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse, in the following
form: "Pay to the order of ________________ without recourse", with all
intervening endorsements that show a complete chain of endorsement from
the originator to the Seller, or, if the original Mortgage Note has been
lost or destroyed and not replaced, an original lost note affidavit from
the Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage, and in the case of each MERS
Mortgage Loan, the original Mortgage, noting the presence of the MIN of
the Mortgage Loan and language indicating that the Mortgage Loan is a MOM
Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "Asset-Backed
Certificates, Series 2002-2, CWABS, Inc., by The Bank of New York, a New
York banking corporation, as trustee under the Pooling and Servicing
Agreement dated as of June 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 Trustee a
true copy of such Mortgage and of each such undelivered interim assignment of
the Mortgage each certified by the Seller, the applicable title company,
escrow agent or attorney, or the originator of such Mortgage, as the case may
be, to be a true and complete copy of the original Mortgage or assignment of
Mortgage submitted for recording. For any such Mortgage Loan that is not a
MERS Mortgage Loan the Seller shall promptly deliver or cause to be delivered
to the Trustee such original Mortgage and such assignment or assignments with
evidence of recording indicated thereon upon receipt thereof from the public
recording official, or a copy thereof, certified, if appropriate, by the
relevant recording office, but in no event shall any such delivery be made
later than 270 days following the Closing Date; provided that in the event
that by such date the Seller is unable to deliver or cause to be delivered
each such Mortgage and each interim assignment by reason of the fact that any
such documents have not been returned by the appropriate recording office, or,
in the case of each interim assignment, because the related Mortgage has not
been returned by the appropriate recording office, the Seller shall deliver or
cause to be delivered such documents to the Trustee as promptly as possible
upon receipt thereof. If the public recording office in which a Mortgage or
interim assignment thereof is recorded retains the original of such Mortgage
or assignment, a copy of the original Mortgage or assignment so retained, with
evidence of recording thereon, certified to be true and complete by such
recording office, shall satisfy the Seller's obligations in Section 2.01. If
any document submitted for recording pursuant to this Agreement is (x) lost
prior to recording or rejected by the applicable recording office, the Seller
shall immediately prepare or cause to be prepared a substitute and submit it
for recording, and shall deliver copies and originals thereof in accordance
with the foregoing or (y) lost after recording, the Seller shall deliver to
the Trustee a copy of such document certified by the applicable public
recording office to be a true and complete copy of the original recorded
document. The Seller shall promptly forward or cause to be forwarded to the
Trustee (x) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (y) any other documents
required to be delivered by the Depositor or the Master Servicer to the
Trustee within the time periods specified in this Section 2.01.
With respect to each Mortgage Loan other than a MERS Mortgage Loan
as to which the related Mortgaged Property and Mortgage File are located in
(a) the State of California or (b) any other jurisdiction under the laws of
which the recordation of the assignment specified in clause (iii) above is not
necessary to protect the Trustee's and the Certificateholders, interest in the
related Mortgage Loan, as evidenced by an Opinion of Counsel reasonably
satisfactory to the Guarantor, delivered by the Seller to the Trustee, the
Guarantor 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 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
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MERS Mortgage Loan, the procedures of the preceding sentence shall be
applicable only so long as the related Mortgage File is maintained in the
possession of the Trustee in the State or jurisdiction described in such
sentence. In the event that with respect to Mortgage Loans other than MERS
Mortgage Loans (i) the Seller, the Depositor or the Master Servicer gives
written notice to the Trustee that recording is required to protect the right,
title and interest of the Trustee on behalf of the Certificateholders in and
to any Mortgage Loan, (ii) a court recharacterizes the sale of the Mortgage
Loans as a financing, or (iii) as a result of any change in or amendment to
the laws of the State or jurisdiction described in the first sentence of this
paragraph or any applicable political subdivision thereof, or any change in
official position regarding application or interpretation of such laws,
including a holding by a court of competent jurisdiction, such recording is so
required, the Trustee shall complete the assignment in the manner specified in
clause (iii) of the second paragraph of this Section 2.01 and the Seller shall
submit or cause to be submitted for recording as specified above or, should
the Seller fail to perform such obligations, the Trustee shall cause the
Master Servicer, at the Master Servicer's expense, to cause each such
previously unrecorded assignment to be submitted for recording as specified
above. In the event a Mortgage File is released to the Master Servicer as a
result of the Master Servicer's having completed a Request for Release in the
form of Exhibit M, the Trustee shall complete the assignment of the related
Mortgage in the manner specified in clause (iii) of the second paragraph of
this Section 2.01.
So long as the Trustee or its agent maintains an office in the State
of California, the Trustee or its agent shall maintain possession of and not
remove or attempt to remove from the State of California any of the Mortgage
Files as to which the related Mortgaged 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 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
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Mortgage Loan, but rather the Seller shall have five (5) Business Days to cure
such failure to deliver. The Seller shall promptly provide each Rating Agency
with written notice of any cure, repurchase or substitution made pursuant to
the proviso of the preceding sentence. On or before the thirtieth (30th) day
(or if such thirtieth day is not a Business Day, the succeeding Business Day)
after the Closing Date (in the case of 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 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, the Guarantor 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 Loans
as are in the Trustee's possession and based on its review and examination and
only as to the foregoing documents, such documents appear regular on their
face and relate to such 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 Trustee pursuant to the Agreement with respect to such
Initial Mortgage Loans are in its possession (except those documents described
in Section 2.01(g)(vi) and based on its review and examination and only as to
the foregoing documents, (i) such documents appear regular on their face and
relate to such 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 Trustee shall be under no duty or obligation to
inspect,
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review or examine such documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable or appropriate for the
represented purpose or that they have actually been recorded in the real
estate records or that they are other than what they purport to be on their
face.
Not later than 180 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer, the Seller and the Guarantor
(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 Trustee 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 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 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 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 Trustee shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set forth
herein. The Seller shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Mortgage File that come into the possession of the Seller
from time to time.
It is understood and agreed that the obligation of the Seller to
substitute for or to purchase any Mortgage Loan that does not meet the
requirements of Section 2.02(a)(A) or (B) above shall constitute the sole
remedy respecting such defect available to the 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 Trustee shall be
under no duty or obligation to inspect, review or examine such documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been 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 Trustee 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 presence of the MIN of the Subsequent Mortgage Loan
and language indicating that the
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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 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 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 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 a Subsequent Mortgage
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Loan that is a MERS Mortgage Loan, the Master Servicer shall cause MERS to
execute and deliver an assignment of the Mortgage in recordable form to
transfer the Mortgage from MERS to the Seller and shall cause such Mortgage to
be removed from registration on the MERS(R) System in accordance with MERS'
rules and regulations.
The Trustee shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set forth
herein. The Seller shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Mortgage File that come into the possession of the Seller
from time to time.
It is understood and agreed that the obligation of the Seller to
substitute for or to purchase, 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 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
performance and injunctive and other forms of equitable relief may be
subject to
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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 related Subsequent Cut-off Date in the
case of the Subsequent Mortgage Loans (unless otherwise
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indicated or the context otherwise requires, percentages with respect to the
Initial Mortgage Loans in a Loan Group are measured by the Cut-off Date
Principal Balance of the Initial Mortgage Loans in the related Loan Group):
(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 delinquent in payment of
principal and interest.
(x) No Group 1 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 100.00%; no Group 1
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%; and no Adjustable Rate Mortgage Loan that
is an Initial Mortgage Loan had a Loan-to-Value Ratio at origination in
excess of 100%.
(xi) Each Group 1 Loan is secured by a valid and enforceable first
lien on the related Mortgaged Property and each Group 2 Mortgage Loan is
secured by a valid and enforceable first or second lien on the related
Mortgaged Property, in each case subject only to (1) the lien of
non-delinquent current real property taxes and assessments, (2)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to
mortgage lending institutions generally or specifically reflected in the
appraisal made in connection with the origination of the related Mortgage
Loan, (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
such Group 2 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 an identified in the Mortgage File related to
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such Mortgage Loan. Approximately 6.105% of the Group 2 Mortgage Loans
that are initial Mortgage Loans are secured by second liens on the
related Mortgaged Properties.
(xii) Immediately prior to the assignment of each Mortgage Loan to
the Depositor, the Seller had good title to, and was the sole owner of,
such Mortgage Loan free and clear of any pledge, lien, encumbrance or
security interest and had full right and authority, 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
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each Mortgage Loan, each such policy is valid and remains in full force
and effect, and each such policy was issued by a title insurer qualified
to do business in the jurisdiction where the Mortgaged Property is
located and acceptable to Xxxxxx Mae or Xxxxxxx Mac and is in a form
acceptable to Xxxxxx Mae or Xxxxxxx Mac, which policy insures the Seller
and successor owners of indebtedness secured by the insured Mortgage, as
to the first priority lien, of the Mortgage subject to the exceptions set
forth in paragraph (xi) 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, servicing and collection
practices with respect to each Mortgage Loan have been in all respects
legal, proper, prudent and customary in the mortgage lending and
servicing business, as conducted by prudent lending institutions which
service mortgage loans of the same type in the jurisdiction in which the
Mortgaged Property is located.
(xxx) There is no pledged account or other security other than real
estate securing the Mortgagor's obligations.
(xxxi) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature.
(xxxii) Each Mortgage Loan contains a customary "due on sale"
clause.
(xxxiii) No more than approximately 3.42% of the Initial Mortgage
Loans in Loan Group 1 are secured by two- to four-family dwellings. No
more than approximately 4.92% of the Initial Mortgage Loans in Loan Group
1 are secured by condominium units. No less than approximately 82.74% of
the Initial Mortgage Loans in Loan Group 1 are secured by single family
detached dwellings. None of the Initial Mortgage Loans in Loan Group 1
are secured by manufactured housing. No more than approximately 8.91% of
the Initial Mortgage Loans in Loan Group 1 are secured by PUDs.
(xxxiv) Each Group 1 Loan had a principal balance at origination of
no more than $300,700 if a one-family property (or $451,050 if the
property is located in Alaska, Guam, Hawaii or the Virgin Islands) or
$384,900, $465,200 and $578,150, if a two-, three- or four-family
property, respectively (or, $577,350, $697,800 or $867,225, respectively,
if the property is located in Alaska, Guam, Hawaii or the Virgin
Islands).
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Provided, however, if any Mortgage Loan (or Mortgage Loans, if more than
one) and a "Xxxxxx Mae Mortgage Loan" are secured by liens on the same
property, the aggregate principal balances at origination of all such
mortgage loans is no more than $300,700 if a one-family property (or
$451,050 if the property is located in Alaska, Guam, Hawaii or the Virgin
Islands) or $384,900, $465,200 and $578,150, if a two-, three- or
four-family property, respectively (or, $577,350, $697,800 or $867,225,
respectively, if the property is located in Alaska, Guam, Hawaii or the
Virgin Islands). "Xxxxxx Xxx Mortgage Loan" means any mortgage loan which
is owned, securitized or serviced by Xxxxxx Mae.
(xxxv) To the extent required under applicable law, each originator
and subsequent mortgagee or servicer of the Mortgage Loan complied with
all licensing requirements and was authorized to transact and do business
in the jurisdiction in which the related Mortgaged Property is located at
all times when it held or serviced the Mortgage Loan. Any and all
requirements of any federal, state or local laws or regulations,
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, anti-predatory
lending, fair credit reporting, unfair collection practice, equal credit
opportunity, fair housing and disclosure laws and regulations, applicable
to the solicitation, origination, collection and servicing of such
Mortgage Loan have been complied with in all material respects; and any
obligations of the holder of the Mortgage Note, Mortgage and other loan
documents have been complied with in all material respects; servicing of
each Mortgage Loan has been in accordance with prudent mortgage servicing
standards, any applicable laws, rules and regulations and in accordance
with the terms of the Mortgage Notes, Mortgage and other loan documents,
whether such origination and servicing was done by Seller, its
affiliates, or any third party which originated the Mortgage Loan on
behalf of, or sold the Mortgage Loan to, any of them, or any servicing
agent of any of the foregoing;
(xxxvi) Each Initial Mortgage Loan in Loan Group 1 was originated on
or after September 30, 1996;
(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 May 1,
2007; each Two-Year Hybrid Mortgage Loan that is an Initial Mortgage Loan
had an initial Adjustment Date no later than July 1, 2004; each
Three-Year Hybrid Mortgage Loan that is an Initial Mortgage Loan had an
initial Adjustment Date no later than July 1, 2005.
(xxxviii) [Reserved]
(xxxix) Approximately 85.45% of the Initial Mortgage Loans in Loan
Group 1, 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 2.30% of the Initial
Mortgage Loans in Loan Group 1 Mortgage Loans are secured by investor
properties, and no less than
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approximately 97.28% of the owner-occupied Group 1 Mortgage Loans that
are Initial Mortgage Loans are secured by owner-occupied Mortgaged
Properties that are primary 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
(xliii) below contain a standard mortgagee clause naming the Seller or
the original mortgagee, and its successors in interest, as mortgagee, and
the Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance, including flood insurance, at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(xliii) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property with
a generally acceptable carrier in an amount representing coverage not
less than the least of (A) the original outstanding principal balance of
the Mortgage Loan, (B) the minimum amount required to compensate for
damage or loss on a replacement cost basis, or (C) the maximum amount of
insurance that is available under the Flood Disaster Protection Act of
1973, as amended.
(xliv) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation of
the Mortgaged Property.
(xlv) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material event that, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration under
the Mortgage or the related Mortgage Note; and the Seller has not waived
any default, breach, violation or event of acceleration.
(xlvi) Each Mortgaged Property is improved by a one- to four-family
residential dwelling, including condominium units and dwelling units in
PUDs. To the best of the Seller's knowledge, no improvement to a
Mortgaged Property includes a cooperative or a mobile home or constitutes
other than real property under state law.
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(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 credit blemished quality mortgage loans or, with respect
to Mortgage Loans purchased by the Seller were underwritten in all
material respects in accordance with customary and prudent underwriting
guidelines generally used by originators of credit blemished quality
mortgage loans.
(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 Group 1 Mortgage Loans that
are Initial Mortgage Loans as of the Cut-off Date ranged from 5.875% per
annum to 13.000% per annum and the weighted average Mortgage rate as of
the Cut-off Date was 8.536% per annum.
(liv) [Reserved]
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(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 Group 1 and Group 2
Mortgage Loans that are Initial Mortgage Loans range from approximately
2.75% to 8.50% and 2.33% to 13.29%, respectively, and the weighted
average Gross Margins were approximately 6.46% and 6.90%, respectively.
(lvii) Except for 879 Group 1 Mortgage Loans that are Initial
Mortgage Loans representing approximately 18.942% of the Group 1 Mortgage
Loans that are Initial Mortgage Loans, 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]
(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 Section 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage, or any substantially
similar successor provision) and applicable Treasury regulations
promulgated thereunder.
(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. Section
1602(aa).
(lxv) Each Group 1 Mortgage Loan was originated in compliance with
the following anti-predatory lending guidelines:
(A) Each Mortgage Loan satisfies the eligibility for purchase
requirements and was originated in compliance with Lender Letter #
LL03-00 dated April 11, 2000 for Xxxxxx Xxx Xxxxxxx (the "Lender
Letter");
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(B) No borrower was encouraged or required to select a Mortgage
Loan product offered by the Mortgage Loan's originator which is a
higher cost product designed for less creditworthy borrowers, unless
at the time of the Mortgage Loan's origination, such borrower did
not qualify taking into account credit history and debt-to-income
ratios for a lower-cost credit product then offered by the Mortgage
Loan's originator or any affiliate of the Mortgage Loan's
originator. If, at the time of loan application, the borrower may
have qualified for a for a lower-cost credit product then offered by
any mortgage lending affiliate of the Mortgage Loan's originator,
the Mortgage Loan's originator referred the borrower's application
to such affiliate for underwriting consideration;
(C) The methodology used in underwriting the extension of
credit for the each Mortgage Loan employs objective mathematical
principles which relate the borrower's income, assets and
liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the borrower's equity in
the collateral as the principal determining factor in approving such
credit extension. Such underwriting methodology confirmed that at
the time of origination (application/approval) the borrower had a
reasonable ability to make timely payments on the Mortgage Loan;
(D) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to
maturity: (i) prior to the loan's origination, the borrower agreed
to such premium in exchange for a monetary benefit, including but
not limited to a rate or fee reduction, (ii) prior to the loan's
origination, the borrower was offered the choice of another mortgage
product that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the borrower in the loan
documents pursuant to applicable state and federal law, and (iv)
notwithstanding any state or federal law to the contrary, Servicer
shall not impose such prepayment premium in any instance when the
mortgage debt is accelerated as the result of the borrower's default
in making the loan payments;
(E) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of
obtaining the extension of credit. No borrower obtained a prepaid
single-premium credit life, disability, accident or health insurance
policy in connection with the origination of the Mortgage Loan;
(F) No Mortgage Loan is subject to the Home Ownership and
Equity Protection Act of 1994 (15 USC Section 1602(aa)), Regulation
Z (12 CFR 226.32) or any similar state law or regulation including
those relating to "high cost mortgages" and "high LTV mortgages";
(G) All points and fees related to each Mortgage Loan were
disclosed in writing to the borrower in accordance with applicable
state and federal law. Except in the case of a Mortgage Loan in an
original principal amount of less than $60,000 which would have
resulted in an unprofitable origination, no borrower
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was charged "points and fees" (whether or not financed) in an amount
greater than 5% of the principal amount of such loan, such 5%
limitation calculated in accordance with the Lender Letter;
(H) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in
connection with the origination and servicing of each Mortgage Loan
has been disclosed in writing to the borrower in accordance with
applicable state and federal law and regulation; and
(I) The Master Servicer will transmit full-file credit
reporting data for each Mortgage Loan pursuant to Xxxxxx Mae Guide
Announcement 95-19 and that for each Mortgage Loan, the Master
Servicer agrees it shall report one of the following statuses each
month as follows: new origination, current, delinquent (30-, 60-,
90-days, etc.), foreclosed, or charged-off.
(lxvi) If the Mortgage Loan provides that the interest rate on the
principal balance of the related Mortgage Loan may be adjusted, all of
the terms of the related Mortgage pertaining to interest rate
adjustments, payment adjustments and adjustments of the outstanding
principal balance have been made in accordance with the terms of the
related Mortgage Note and applicable law and are enforceable and such
adjustments will not affect the priority of the Mortgage lien.
(lxvii) The Mortgaged Property complies with all applicable laws,
rules and regulations relating to environmental matters, including but
not limited to those relating to radon, asbestos and lead paint and
neither the Seller nor, to the Seller's knowledge, the Mortgagor, has
received any notice of any violation or potential violation of such law.
(lxviii) There is no action, suit or proceeding pending, or to the
best of Seller's knowledge, threatened or likely to be asserted with
respect to the Mortgage Loan against or affecting Seller before or by any
court, administrative agency, arbitrator or governmental body.
(lxix) No action, inaction, or event has occurred and no state of
fact exists or has existed that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable
hazard insurance policy, irrespective of the cause of such failure of
coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by
Seller or any designee of Seller or any corporation in which Seller or
any officer, director, or employee had a financial interest at the time
of placement of such insurance.
(lxx) Each Mortgage Loan has a fully assignable life of loan tax
service contract which may be assigned without the payment of any fee.
(lxxi) No Mortgagor has notified the Seller, and the Seller has no
knowledge, of any relief requested or allowed to a Mortgagor under the
Relief Act.
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(lxxii) No Mortgage Loan is subject to the City of Oakland
Anti-Predatory Lending Ordinance (i.e. the Oakland Residential Lending
Ordinance No. 12361 C.M.S., the amendment No. 12362 C.M.S. to Oakland's
Linked Banking Services Ordinance and Resolution 01-62 of the Oakland
Redevelopment Agency, collectively the "Oakland Ordinance") except as
identified on the Mortgage Loan Schedule. Any Mortgage Loan subject to
the Oakland Ordinance is in compliance with the provisions of the Oakland
Ordinance.
(lxxiii) No predatory or deceptive lending practices, including but
not limited to, the extension of credit to the Mortgagor without regard
for the Mortgagor's ability to repay the Mortgage Loan and the extension
of credit to the Mortgagor which has no apparent benefit to the
Mortgagor, were employed by the originator of the Mortgage Loan in
connection with the origination of the Mortgage Loan; and
(lxxiv) With respect to the Group 2 Mortgage Loans:
(A) No Mortgage Loan is subject to the provisions of the
Homeownership and Equity Protection Act of 1994 ("HOEPA"), except as
identified as such on the Mortgage Loan Schedule. With respect to
any Mortgage Loan subject to HOEPA, the Mortgage File contains a
notice from the originator, and a copy of a notice to each entity
which was a purchaser or assignee of the Mortgage Loan, satisfying
the provisions of such Act and the regulations issued thereunder, to
the effect that the Mortgage Loan is subject to special truth in
lending rules.
(lxxv) The information set forth in the Prepayment Charge Schedule
is complete, true and correct in all material respects at the date or
dates respecting which such information is furnished and each Prepayment
Charge is permissible and enforceable in accordance with its terms under
applicable law upon the Mortgagor's full and voluntary principal
prepayment (except to the extent that: (1) the enforceability thereof may
be limited by bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally; or (2) the
collectibility thereof may be limited due to acceleration in connection
with a foreclosure or other involuntary prepayment).
(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
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respects and, if such breach is not so cured, shall, (i) if such 90-day period
expires prior to the second anniversary of the Closing Date, remove such
Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and substitute
in its place a Replacement Mortgage Loan, in the manner and subject to the
conditions set forth in this Section; or (ii) repurchase the affected Mortgage
Loan or Mortgage Loans from the Trustee at the Purchase Price in the manner
set forth below; provided that any such substitution pursuant to (i) above or
repurchase pursuant to (ii) above shall not be effected prior to the delivery
to the Trustee and, upon request, to the Guarantor 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, the Guarantor or the Trustee for any expenses reasonably
incurred by the Master Servicer, the Guarantor or the Trustee in respect of
enforcing the remedies for such breach. To enable the Master Servicer to amend
the Mortgage Loan Schedule, any Representing Party liable for a breach under
this Section 2.03 shall, unless it cures such breach in a timely fashion
pursuant to this Section 2.03, promptly notify the Master Servicer whether
such Representing Party intends either to repurchase, or to substitute for,
the Mortgage Loan affected by such breach. With respect to the representations
and warranties described in this Section that are made to the best of the
Representing Party's knowledge, if it is discovered by any of the Depositor,
the Master Servicer, the Seller or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, notwithstanding the
Representing Party's lack of knowledge with respect to the substance of such
representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
With respect to any Replacement Mortgage Loan or Loans, the Seller
delivering such Replacement Mortgage Loan shall deliver to the Trustee for the
benefit of the Certificateholders the related Mortgage Note, Mortgage and
assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to
the Distribution Date on which such proceeds are to be distributed shall not
be part of the Trust Fund and will be retained by the Seller delivering such
Replacement Loan on such Distribution Date. For the month of substitution,
distributions to Certificateholders will include the Scheduled Payment due on
any Deleted Mortgage Loan for the related Due Period and thereafter the Seller
shall be entitled to retain all amounts received in respect of such Deleted
Mortgage Loan. The Master Servicer shall amend the Mortgage Loan Schedule for
the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans
and the Master Servicer shall deliver the amended Mortgage Loan Schedule to
the Trustee. Upon such substitution, the Replacement Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects, and the
Seller delivering such Replacement Mortgage Loan shall be deemed to have made
with respect to such Replacement Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Section 2.03(b)
with respect to such Mortgage Loan. Upon any such substitution and the deposit
to the Certificate Account of the amount required to be deposited therein in
connection with such substitution as described in the following paragraph, the
Trustee shall release to the
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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.
The Seller shall also be required to promptly repurchase at the
Purchase Price any Mortgage Loan which is an Early Payment Default Loan.
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 Trustee shall release the related Mortgage File held for the benefit of
the Certificateholders to such Seller, and the Trustee shall execute and
deliver at such Person's direction the related instruments of transfer or
assignment prepared by such Seller, in each case without recourse, as shall be
necessary to transfer title from the Trustee for the benefit of the
Certificateholders and transfer the Trustee's interest to such Seller to any
Mortgage Loan purchased pursuant to this Section 2.03. It is understood and
agreed that the obligation under this Agreement of the Seller to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and
is continuing shall constitute the sole remedy against the Seller respecting
such breach available to Certificateholders, the Depositor or the Trustee.
(d) The representations and warranties set forth in Section 2.03
hereof shall survive delivery of the respective Mortgage Files to the
Co-Trustee for the benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master Servicer
and the Trustee as follows, as of the date hereof and as of each Subsequent
Transfer Date:
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(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 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.
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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 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, and, upon request, to the Guarantor, an
Opinion of Counsel, addressed to the Trustee, and, upon request, to the
Guarantor, to the effect that such repurchase or substitution would not (i)
result in the imposition of the tax on "prohibited transactions" of the Trust
Fund or contributions after the Closing Date, as defined in sections
860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause the Trust Fund
to fail to qualify as a REMIC at any time that any Certificates are
outstanding. Any Mortgage Loan as to which repurchase or substitution was
delayed pursuant to this paragraph shall be repurchased or the substitution
therefor shall occur (subject to compliance with Sections 2.02, 2.03 or 2.04)
upon the earlier of (a) the occurrence of a default or imminent default with
respect to such loan and (b) receipt by the Trustee, and, upon request, to the
Guarantor, 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
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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.
Section 2.08 Rights of the Guarantor.
In addition to the specific rights of the Guarantor identified in
this Agreement but subject to the provisions of Section 8.01(iii) and Section
8.02(a)(ix), the Guarantor shall have the right to direct the Trustee relating
to the exercise of any remedy available to the Trustee or to the exercise of
any power conferred on the Trustee pursuant to this Agreement. Notwithstanding
anything to the contrary anywhere in this Agreement, all rights of the
Guarantor hereunder, except any rights to indemnification, shall permanently
terminate upon the later to occur of (A) such time as the Guaranteed
Certificates shall no longer be outstanding and (B) the payment in full to the
Guarantor of any amounts owed to the Guarantor in respect of the Xxxxxx Xxx
Guaranty; provided that the Guarantor shall not have any rights hereunder,
except indemnification rights, so long as any default has occurred and is
continuing under the Xxxxxx Mae Guaranty.
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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
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.
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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.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Monthly Payments or Stated Principal Balances that were made
by the Master Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Master Servicer, upon discovery
or receipt of notice thereof, immediately shall deliver to the Trustee for
deposit in the Distribution Account from its own funds the amount of any such
shortfall and shall indemnify and hold harmless the Trust Fund, the Trustee,
the Depositor, the Guarantor and any successor master servicer in respect of
any such liability; provided, that in the case of the Guarantor such indemnity
shall only apply with respect to Group 1 Mortgage Loans. Such indemnities
shall survive the termination or discharge of this Agreement. Notwithstanding
the foregoing, this Section 3.01 shall not limit the ability of the Master
Servicer to seek recovery of any such amounts from the related Mortgagor under
the terms of the related Mortgage Note, as permitted by law and shall not be
an expense of the Trust.
Section 3.02 Subservicing; Enforcement of the Obligations of Master
Servicer; Special Servicer.
(a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that (i)
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder, (ii) that
such subservicing agreements would not result in a withdrawal or a downgrading
by any Rating Agency of the ratings on any Class of Certificates, as evidenced
by a letter to that effect delivered by each Rating Agency to the Depositor
and the Guarantor and (iii) the Guarantor shall have consented to such
subservicing agreements (which consent shall not be unreasonably withheld)
with Subservicers, for the servicing and administration of the Mortgage Loans.
The Master Servicer shall deliver to the Guarantor and the Trustee copies of
all Sub-Servicing Agreements, and any amendments or modifications thereof,
promptly upon the Master Servicer's execution and delivery of such
instruments. Each of the Master Servicer, with the written consent of the
Guarantor, and the Guarantor shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. Notwithstanding the provisions of any subservicing
agreement, any of the provisions of this
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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) The Guarantor may require the Master Servicer to enter into a
special subservicing agreement with a servicer with expertise in servicing
delinquent mortgage loans as designated by the Guarantor (the "Special
Servicer") on or after the earliest Distribution Date with respect to which
the Certificate Principal Balance of the Class B-1 Certificates has been
reduced to zero. The parties hereto agree that, as of the Closing Date, Xxxxxx
Loan Servicing LP is an approved Special Servicer. Such special subservicing
agreement shall relate to the servicing of only Group 1 Mortgage Loans that
(x) have been delinquent in payment with respect to three or more Monthly
Payments (provided, however, that the third such Monthly Payment shall not be
deemed to be delinquent for purposes of this clause (x) until the close of
business on the last day of the month in which such Monthly Payment first
became due) and (y) have been transferred to the Special Servicer in
accordance with this Section 3.02 and the related special subservicing
agreement (a "Specially Serviced Mortgage Loan").
(d) The special subservicing agreement shall be consistent with the
provisions of this Agreement. In addition, any special subservicing agreement
with a Special Servicer appointed in accordance with Section 3.02(c) shall be
on terms which shall be reasonably acceptable to the Guarantor and the Master
Servicer and shall provide, at a minimum that:
(1) the Special Servicer shall service only the Specially Serviced
Mortgage Loans in a manner consistent with the provisions with this
Agreement except as provided otherwise in the special subservicing
agreement;
(2) the Special Servicer shall use the Xxxxxx Mae foreclosure
network (and pay the customary fees therefor) for foreclosures and
bankruptcies relating to Specially Serviced Mortgage Loans;
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(3) the Special Servicer shall use the Xxxxxx Xxx disposition
service (and pay the customary fees therefor) for the disposition of REO
Property related to Specially Serviced Mortgage Loans;
(4) the Special Servicer shall make Servicing Advances on the
Specially Serviced Mortgage Loans to the same extent and in the same
manner as the Master Servicer with respect to the Group I Mortgage Loans
pursuant to this Agreement;
(5) the Special Servicer shall be entitled to receive the Servicing
Fee with respect to all Specially Serviced Mortgage Loans;
(6) prior to the transfer of servicing to the Special Servicer, the
Master Servicer and the Special Servicer shall have provided all notices
relating to such transfer of servicing as required to be delivered to the
borrowers by applicable state and federal law;
(7) the Special Servicer shall indemnify the Master Servicer and the
Trustee for any liabilities to them arising from failures of the Special
Servicer to perform its obligations according to the terms of the
subservicing agreement;
(8) the Master Servicer shall promptly give notice thereof to the
Trustee and the Guarantor of the transfer of servicing to the Special
Servicer, including the loan number together with the borrower's name and
the unpaid principal balance of the transferred Mortgage Loan at the time
of transfer;
(9) each of the respective obligations, duties, and liabilities of
the Master Servicer and the Special Servicer (or either of them) with
respect to the servicing of the Specially Serviced Mortgage Loans that
have arisen prior to the date on which the servicing of such Specially
Serviced Mortgage Loan was transferred to the Special Servicer (the
"Effective Date"), or that arise on and after the Effective Date, under
this Agreement and the subservicing agreement and that remain unperformed
or unsatisfied shall survive any transfer of servicing;
(10) once a Group I Mortgage Loan becomes a Specially Serviced
Mortgage Loan, such Mortgage Loan shall remain a Specially Serviced
Mortgage Loan, and shall continue to be serviced by the Special Servicer,
until the earlier of the liquidation or other disposition of such
Mortgage Loan or the termination of the subservicing agreement,
regardless of delinquency status or otherwise;
(11) the Guarantor may remove the Special Servicer if the Special
Servicer at any time fails to meet any of the above criteria or
otherwise, in the judgment of the Guarantor, fails to perform according
to the terms of the subservicing agreement and the provisions of this
Section 3.02; provided that prior to any such removal the Guarantor shall
designate a successor Special Servicer meeting the requirements of this
Section 3.02, and no removal of a Special Servicer shall be effective
until a successor Special Servicer has entered into a special
subservicing agreement meeting the requirements of this Section 3.02 and
agreed to assume the duties of the Special Servicer or the Master
Servicer has undertaken such duties; and
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(12) in connection with any transfer of a Group I Mortgage Loan to
the Special Servicer as a Specially Serviced Mortgage Loan, the Master
Servicer shall execute any appropriate assignments or other documents
reasonable and necessary to further the prosecution of the Special
Servicer obligations under the special subservicing agreement.
Section 3.03 Rights of the Depositor, the Guarantor, the Seller and
the Trustee in Respect of the Master Servicer.
None of the Trustee, the Seller, the Guarantor or the Depositor
shall have any responsibility or liability for any action or failure to act by
the Master Servicer, and none of them is obligated to supervise the
performance of the Master Servicer hereunder or otherwise.
The Master Servicer shall afford (and any Subservicing Agreement
shall provide that each Subservicer shall afford) the Depositor, the Guarantor
and the Trustee, upon reasonable notice, during normal business hours, access
to all records maintained by the Master Servicer (and any such Subservicer) in
respect of the Master Servicer's rights and obligations hereunder and access
to officers of the Master Servicer (and those of any such Subservicer)
responsible for such obligations; provided, that access to records for the
Guarantor shall be limited to those related to Group 1 Mortgage Loans and its
origination programs relating to mortgage loans similar to the Mortgage Loans.
Upon request, the Master Servicer shall furnish to the Depositor, the
Guarantor and the Trustee its (and any such Subservicer's) most recent
financial statements and such other information relating to the Master
Servicer's capacity to perform its obligations under this Agreement that it
possesses; provided, that any such information furnished to the Guarantor
shall be limited to that which is related to Group 1 Mortgage Loans. To the
extent such information is not otherwise available to the public, the
Depositor, the Guarantor and the Trustee shall not disseminate any information
obtained pursuant to the preceding two sentences without the Masters
Servicer's (or any such Subservicer's) written consent, except as required
pursuant to this Agreement or to the extent that it is necessary to do so (i)
in working with legal counsel, auditors, taxing authorities or other
governmental agencies, rating agencies or reinsurers or (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any
court or governmental authority having jurisdiction over the Depositor, the
Guarantor, the Trustee or the Trust Fund, and in either case, the Depositor,
the Guarantor or the Trustee, as the case may be, shall use its best efforts
to assure the confidentiality of any such disseminated non-public information.
The Depositor may, but is not obligated to, enforce the obligations of the
Master Servicer under this Agreement and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the
Master Servicer under this Agreement or exercise the rights of the Master
Servicer under this Agreement; provided by virtue of such performance by the
Depositor of its designee. The Depositor shall not have any responsibility or
liability for any action or failure to act by the Master Servicer and is not
obligated to supervise the performance of the Master Servicer under this
Agreement or otherwise.
Section 3.04 Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer
be the Master Servicer hereunder (including by reason of an Event of Default),
the Trustee or its designee shall thereupon assume all of the rights and
obligations of the Master Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Master Servicer pursuant
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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, subject to Section 3.20, any Prepayment Charge or penalty
interest in connection with the prepayment of a Mortgage Loan and (ii) extend
the due dates for payments due on a Mortgage Note for a period not greater
than 270 days. In the event of any such arrangement, the Master Servicer shall
make Advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. The Master Servicer shall
not be required to institute or join in litigation with respect to collection
of any payment (whether under a Mortgage, Mortgage Note or otherwise or
against any public or governmental authority with respect to a taking or
condemnation) if it reasonably believes that enforcing the provision of the
Mortgage or other instrument pursuant to which such payment is required is
prohibited by applicable law.
(b) The Master Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit or cause to be deposited
on a daily basis within two Business Days of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted
by Subservicers or received by it in respect of Mortgage Loans
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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;
(ix) all Prepayment Charges and Master Servicer Prepayment Charge
Payment Amounts; and
(x) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer
into the Certificate Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of late payment charges or assumption fees, if collected, need not be
remitted by the Master Servicer. In the event that the Master Servicer shall
remit any amount not required to be remitted and not otherwise subject to
withdrawal pursuant to Section 3.08 hereof, it may at any time withdraw or
direct the institution maintaining the Certificate Account, to withdraw such
amount from the Certificate Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by
delivering written notice thereof to the institution maintaining the
Certificate Account, that describes the amounts deposited in error in the
Certificate Account. The Master Servicer shall maintain adequate records with
respect to all withdrawals made pursuant to this Section. All funds deposited
in the Certificate Account shall be held in trust for the Certificateholders
until withdrawn in accordance with Section 3.08.
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(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. The Trustee shall allocate (i) $40,444,429.40 of the
Pre-Funded Amount for the purchase of the Subsequent Mortgage Loans to be
included in Loan Group 1 and (ii) $17,422,215.74 of the Pre-Funded Amount for
the purchase of the Subsequent Mortgage Loans to be included in Loan Group 2.
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 Cut-off Date Principal Balances of
the Subsequent Mortgage Loans sold to the Trust Fund for inclusion in Loan
Group 1 or Loan Group 2, as the case may be, on the Subsequent Transfer Date
and pay that amount to the order of the Seller.
On the Business Day before the Distribution Date following the
Remittance Period in which the Funding Period ends, the Trustee shall (i)
withdraw the Unused Pre-Funded Amount from each of the Pre-Funding Accounts,
(ii) promptly deposit each amount in the Distribution Account, and (iii)
distribute each amount to the related Certificate Group on the Distribution
Date pursuant to Section 4.04.
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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 July, August, September and
October 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, the Carryover Reserve 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, 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. 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. 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.
(f) The Master Servicer shall give at least 30 days advance notice
to the Trustee, the Seller, the Guarantor, 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, the Guarantor, 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.
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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.
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; and provided, further, that
the Master Servicer shall give notice upon request to the Guarantor of
any withdrawal pursuant to this subsection;
(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, (1) the Master Servicer shall withdraw from
the Certificate Account and remit to
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the Trustee the Interest Remittance Amount and Principal Remittance Amount for
each Loan Group, and the Trustee shall deposit such amount in the Distribution
Account and (2) the Master Servicer shall withdraw from the Certificate
Account and remit to the Trustee the amount of Credit Comeback Excess Amount,
to the extent on deposit, and the Trustee shall deposit such amount in the
Distribution Account.
The Master Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to subclauses (i), (ii),
(iv), (v) and (vi) above and the Group 1 Credit Comeback Amount. Prior to
making any withdrawal from the Certificate Account pursuant to subclause
(iii), the Master Servicer shall deliver to the Trustee an Officer's
Certificate of a Servicing Officer indicating the amount of any previous
Advance determined by the Master Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loan(s), and their respective portions of
such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account
for distribution to the Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the last paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Distribution Account for the following purposes:
(i) to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds in
or credited to the Distribution Account;
(ii) to pay the Trustee the Trustee Fee on each Distribution Date;
(iii) to withdraw pursuant to Section 3.05 any amount deposited in
the Distribution Account and not required to be deposited therein; and
(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
(c) The Trustee shall withdraw funds from the Carryover Reserve Fund
for distribution to the Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the last paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Carryover Reserve Fund for the following purposes:
(i) to withdraw pursuant to Section 3.05 any amount deposited in the
Carryover Reserve Fund and not required to be deposited therein; and
(ii) to clear and terminate the Carryover Reserve Fund upon
termination of the Agreement pursuant to Section 9.01 hereof.
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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.
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
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the event that the Master Servicer is prohibited by law from enforcing any
such due-on-sale clause, or if coverage under any Required Insurance Policy
would be adversely affected, or if nonenforcement is otherwise permitted
hereunder, the Master Servicer is authorized, subject to Section 3.11(b), to
take or enter into an assumption and modification agreement from or with the
person to whom such property has been or is about to be conveyed, pursuant to
which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required
Insurance Policies to enter into a substitution of liability agreement with
such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Mortgagor and becomes liable under
the Mortgage Note. The Master Servicer shall notify the Trustee and the
Guarantor that any such substitution, modification or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. If the Class B-1 Certificates are no longer
outstanding or if the number of Group 1 Mortgage Loans which have been the
subject of a substitution, modification or assumption agreement exceeds 5% of
the number of Group 1 Mortgage Loans as of the Closing Date, the Master
Servicer shall not take or enter into any substitution, assumption or
modification agreement without obtaining the prior written consent of the
Guarantor to such substitution, assumption or modification agreement. The
Master Servicer shall submit to the Guarantor with its request for consent,
such information related to the proposed substitution, assumption or
modification agreement as can be expected to be needed by the Guarantor to
evaluate the Master Servicer's request, including the terms of the proposed
substitution, assumption or modification and the reasons for the Master
Servicer's decision that such substitution, assumption or modification
agreement should be taken or entered into with respect to such Group I
Mortgage Loan. The Guarantor shall be deemed to have consented to the Master
Servicer's request in the event that the Guarantor does not either provide the
Master Servicer with its written consent to such requested substitution,
assumption or modification agreement or written notice of its objection to
such substitution, assumption or modification agreement within five Business
Days of its receipt of the Master Servicer's request. Such requests shall be
sent to the Guarantor at: Xxxxxx Xxx, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000, Attn: Vice President-Loss Mitigation. The Master Servicer shall
give written notice to the Guarantor with respect to each substitution,
assumption or modification agreement which is entered into with the consent of
the Guarantor to the following address: Xxxxxx Mae, 0000 Xxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000, Attn: Bond Administration. Such notice shall be
delivered within thirty Business Days following the date of such substitution,
assumption or modification agreement. 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
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requires the signature of the Trustee, or if an instrument of release signed
by the Trustee is required releasing the Mortgagor from liability on the
Mortgage Loan, the Master Servicer shall prepare and deliver or cause to be
prepared and delivered to the Trustee for signature and shall direct, in
writing, the Trustee to execute the assumption agreement with the Person to
whom the Mortgaged Property is to be conveyed and such modification agreement
or supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding assumptions
or the transfer of the Mortgaged Property to such Person. In connection with
any such assumption, no material term of the Mortgage Note (including, but not
limited to, the Mortgage Rate, the amount of the Scheduled Payment, the
Maximum Mortgage Rate, the Minimum Mortgage Rate, the Gross Margin, the
Periodic Rate Cap, the Adjustment Date and any other term affecting the amount
or timing of payment on the Mortgage Loan) may be changed. In addition, the
substitute Mortgagor and the Mortgaged Property must be acceptable to the
Master Servicer in accordance with its underwriting standards as then in
effect. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in
the case of the original shall be added to the related Mortgage File and
shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part
thereof. Any fee collected by the Master Servicer for entering into an
assumption or substitution of liability agreement will be retained by the
Master Servicer as additional servicing compensation.
Section 3.12 Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds and Realized
Losses; Repurchase of Certain Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts to foreclose
upon or otherwise comparably convert the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments.
In connection with such foreclosure or other conversion, the Master Servicer
shall follow such practices and procedures as it shall deem necessary or
advisable and as shall be normal and usual in its general mortgage servicing
activities and the requirements of the insurer under any Required Insurance
Policy; provided that the Master Servicer shall not be required to expend its
own funds in connection with any foreclosure or towards the restoration of any
property unless it shall determine (i) that such restoration and/or
foreclosure will increase the proceeds of liquidation of the Mortgage Loan
after reimbursement to itself of such expenses and (ii) that such expenses
will be recoverable to it through Liquidation Proceeds (respecting which it
shall have priority for purposes of withdrawals from the Certificate Account
pursuant to Section 3.08 hereof). The Master Servicer shall be responsible for
all other costs and expenses incurred by it in any such proceedings; provided
that it shall be entitled to reimbursement thereof from the proceeds of
liquidation of the related Mortgaged Property, as contemplated in Section 3.08
hereof. If the Master Servicer has knowledge that a Mortgaged Property that
the Master Servicer is contemplating acquiring in foreclosure or by
deed-in-lieu of 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 and, with respect to Group I Mortgage Loans, the Master
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Servicer shall not foreclose or accept a deed in lieu of foreclosure without
the prior written consent of the Guarantor.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders (or the Trustee's nominee on behalf of the
Certificateholders). The Trustee's name shall be placed on the title to such
REO Property solely as the Trustee hereunder and not in its individual
capacity. The Master Servicer shall ensure that the title to such REO Property
references this Agreement and the Trustee's capacity thereunder. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall either itself
or through an agent selected by the Master Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent
the same, or any part thereof, as the Master Servicer deems to be in the best
interest of the Master Servicer and the Certificateholders for the period
prior to the sale of such REO Property. The Master Servicer shall prepare for
and deliver to the Trustee a statement with respect to each REO Property that
has been rented showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO
Property at such times as is necessary to enable the Trustee to comply with
the reporting requirements of the REMIC Provisions. The net monthly rental
income, if any, from such REO Property shall be deposited in the Certificate
Account no later than the close of business on each Determination Date. The
Master Servicer shall perform the tax reporting and withholding related to
foreclosures, abandonments and cancellation of indebtedness income as
specified by Sections 1445, 6050J and 6050P of the Code by preparing and
filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as
soon as practicable in a manner that maximizes the Liquidation Proceeds, but
in no event later than three years after its acquisition by the Trust Fund or,
at the expense of the Trust Fund, the Master Servicer shall request, more than
60 days prior to the day on which such three-year period would otherwise
expire, an extension of the three-year grace period. In the event the Trustee
or, upon request by, the Guarantor shall have been supplied with an Opinion of
Counsel (such opinion not to be an expense of the Trustee or the Guarantor) 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.
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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 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 and shall remit such information with
respect to the Group 1 Mortgage Loans to the Guarantor upon request.
(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. In addition, if the Class B-1 Certificates are no
longer outstanding, the Guarantor shall be entitled to purchase from the Trust
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Fund any Mortgage Loan that is 90 days or more delinquent at a price equal to
the Purchase Price. The Purchase Price for any Mortgage Loan purchased
hereunder shall be deposited in the Certificate Account, and the Trustee, upon
receipt of certification from the Master Servicer of such deposit and a
Request for Release from the Master Servicer in the form of Exhibit N hereto,
shall release or cause to be released to the purchaser of such Mortgage Loan
the related Mortgage File and shall execute and deliver such instruments of
transfer or assignment prepared by the purchaser of such Mortgage Loan, in
each case without recourse, as shall be necessary to vest in the purchaser of
such Mortgage Loan any Mortgage Loan released pursuant hereto and the
purchaser of such Mortgage Loan shall succeed to all the Trustee's right,
title and interest in and to such Mortgage Loan and all security and documents
related thereto. Such assignment shall be an assignment outright and not for
security. The purchaser of such Mortgage Loan shall thereupon own such
Mortgage Loan, and all security and documents, free of any further obligation
to the Trustee or the Certificateholders with respect thereto.
Section 3.13 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 Trustee by delivering a Request for Release substantially in the form of
Exhibit N. Upon receipt of such request, the Trustee shall promptly release
the related Mortgage File to the Master Servicer, and the Trustee shall at the
Master Servicer's direction execute and deliver to the Master Servicer the
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage in each case
provided by the Master Servicer, together with the Mortgage Note with written
evidence of cancellation thereon. The Master Servicer is authorized to cause
the removal from the registration on the MERS(R) System of such Mortgage and
to execute and deliver, on behalf of the Trust Fund and the Certificateholders
or any of them, any and all instruments of satisfaction or cancellation or of
partial or full release. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Certificate Account, the Distribution Account, the Carryover Reserve Fund or
the related subservicing account. From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan, including
for such purpose, collection under any policy of flood insurance any fidelity
bond or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making
of any corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee shall, upon delivery to
the Trustee of a Request for Release in the form of Exhibit M signed by a
Servicing Officer, release the Mortgage File to the Master Servicer. Subject
to the further limitations set forth below, the Master Servicer shall cause
the Mortgage File or documents so released to be returned to the Trustee when
the need therefor by the Master Servicer no longer exists, unless the Mortgage
Loan is liquidated and the proceeds thereof are deposited in the Certificate
Account, in which case the Trustee shall deliver the Request for Release to
the Master Servicer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this
Agreement, the Master Servicer shall deliver or cause to be delivered to the
Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any
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legal action brought to obtain judgment against the Mortgagor on the Mortgage
Note or the Mortgage or to obtain a deficiency judgment or to enforce any
other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Master Servicer shall cause possession of any Mortgage File or of the
documents therein that shall have been released by the Trustee to be returned
to the Trustee within 21 calendar days after possession thereof shall have
been released by the Trustee unless (i) the Mortgage Loan has been liquidated
and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Certificate Account, and the Master Servicer shall have delivered to
the Trustee a Request for Release in the form of Exhibit N or (ii) the
Mortgage File or document shall have been delivered to an attorney or to a
public trustee or other public official as required by law for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property and the Master Servicer shall have delivered to the
Trustee an Officer's Certificate of a Servicing Officer certifying as to the
name and address of the Person to which the Mortgage File or the documents
therein were delivered and the purpose or purposes of such delivery.
Section 3.14 Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise
are collected by the Master Servicer as Liquidation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. All Mortgage Files and funds
collected or held by, or under the control of, the Master Servicer in respect
of any Mortgage Loans, whether from the collection of principal and interest
payments or from Liquidation Proceeds, including but not limited to, any funds
on deposit in the Certificate Account, shall be held by the Master Servicer
for and on behalf of the Trust Fund and shall be and remain the sole and
exclusive property of the Trust Fund, subject to the applicable provisions of
this Agreement. The Master Servicer also agrees that it shall not create,
incur or subject any Mortgage File or any funds that are deposited in the
Certificate Account, the Distribution Account, the Carryover Reserve Fund or
in any Escrow Account (as defined in Section 3.06), or any funds that
otherwise are or may become due or payable to the Trustee for the benefit of
the Certificateholders, to any claim, lien, security interest, judgment, levy,
writ of attachment or other encumbrance, or assert by legal action or
otherwise any claim or right of set off against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that
the Master Servicer shall be entitled to set off against and deduct from any
such funds any amounts that are properly due and payable to the Master
Servicer under this Agreement.
Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer
shall be entitled to retain or withdraw from the Certificate Account out of
each payment of interest on a Mortgage Loan included in the Trust Fund an
amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.
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Additional servicing compensation in the form of any Excess
Proceeds, assumption fees, late payment charges, Prepayment Interest Excess,
and all income and gain net of any losses realized from Permitted Investments
shall be retained by the Master Servicer to the extent not required to be
deposited in the Certificate Account pursuant to Section 3.05 or 3.12(a)
hereof. The Master Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
any premiums for hazard insurance, as required by Section 3.10 hereof and
maintenance of the other forms of insurance coverage required by Section 3.10
hereof) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.08 and 3.12 hereof.
Section 3.16 Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of the Certificates and
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.
For a period of two years from the Closing Date, the Guarantor may
contact the Seller to confirm that the Seller continues to actively engage in
a program to originate mortgage loans to low-income families and to obtain
other non-proprietary information about the Seller's activities that may
assist the Guarantor in completing its own regulatory requirements during
normal business hours and subject to reimbursement for expenses. The Seller
shall use reasonable efforts to provide such information to the Guarantor.
Section 3.17 Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor, the Guarantor
and the Trustee on or before the 120th day after the end of the Master
Servicer's fiscal year, commencing with its 2002 fiscal year, an Officer's
Certificate stating, as to the signer thereof, that (i) a review of the
activities of the Master Servicer during the preceding calendar year and of
the performance of the Master Servicer under this Agreement has been made
under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has fulfilled all its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof and (iii) to
the best of such officer's knowledge, each Subservicer has fulfilled all its
obligations under its Subservicing Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation specifying
each such default known to such officer and the nature and status thereof. The
Trustee shall forward a copy of each such statement to each Rating Agency.
Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided such
statement is delivered by the Master Servicer to the Trustee.
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Section 3.18 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before the later of (i) the 120th day after the end of the
Master Servicer's fiscal year, commencing with its 2002 fiscal year or (ii)
within 30 days of the issuance of the annual audited financial statements
beginning with the audit for the period ending in 2002, the Master Servicer at
its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Master Servicer, the
Seller or any affiliate thereof) that is a member of the American Institute of
Certified Public Accountants to furnish a report to the Trustee, the
Guarantor, the Depositor and the Seller in compliance with the Uniform Single
Attestation Program for Mortgage Bankers. Copies of such report shall be
provided by the Trustee to any Certificateholder upon request at the Master
Servicer's expense, provided such report is delivered by the Master Servicer
to the Trustee. Upon written request, the Master Servicer shall provide to the
Certificateholders its publicly available annual financial statements (or the
Master Servicer's parent company's publicly available annual financial
statements, as applicable), if any, promptly after they become available.
Section 3.19 The Cap Contracts.
The Seller shall assign all of its right, title and interest in and
to the interest rate cap transaction evidenced by the Cap Contract to, and
shall cause all of its obligations in respect of such transaction to be
assumed by, the Trustee on behalf of the Trust Fund, on the terms and
conditions set forth in the Cap Contract Assignment Agreement. The Cap
Contracts will be assets of the Trust Fund but will not be an asset of any
REMIC. The Master Servicer, on behalf of the Trustee, shall deposit any
amounts received from time to time with respect to a 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 a Cap Contract.
The Master Servicer, on behalf of the Trustee, shall act as
calculation agent and/or shall terminate a Cap Contract, in each case upon the
occurrence of certain events of default or termination events to the extent
specified thereunder. Upon any such termination, the Cap Contract Counterparty
will be obligated to pay the Trustee or the Master Servicer for the benefit of
the Trust Fund an amount in respect of such termination. Any amounts received
by the Trustee or the Master Servicer for the benefit of the Trust Fund, as
the case may be, in respect of such termination shall be deposited and held in
the Distribution Account to pay Net Rate Carryover for the Certificates as
provided in Section 4.04(b) 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.
Section 3.20 Prepayment Charges.
(a) Notwithstanding anything in this Agreement to the contrary, in
the event of a Principal Prepayment in full or in part of a Mortgage Loan, the
Master Servicer may not
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waive any Prepayment Charge or portion thereof required by the terms of the
related Mortgage Note unless (i) the Servicer determines that such waiver
would maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking
into account the value of such Prepayment Charge, or (ii) (A) the
enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium,
receivership, or other similar law relating to creditors' rights generally or
(2) due to acceleration in connection with a foreclosure or other involuntary
payment, or (B) the enforceability is otherwise limited or prohibited by
applicable law. In the event of a Principal Prepayment in full or in part with
respect to any Mortgage Loan, the Master Servicer shall deliver to the Trustee
an Officer's Certificate substantially in the form of Exhibit M no later than
the third Business Day following the immediately succeeding Determination Date
with a copy to the Class N and Class X Certificateholders. If the Master
Servicer has waived or does not collect all or a portion of a Prepayment
Charge relating to a Principal Prepayment in full or in part due to any action
or omission of the Master Servicer, other than as provided above, the Master
Servicer shall deliver to the Trustee, together with the Principal Prepayment
in full or in part, the amount of such Prepayment Charge (or such portion
thereof as had been waived) for deposit into the Distribution Account for
distribution in accordance with the terms of this Agreement.
(b) Upon discovery by the Seller or a Responsible Officer of the
Trustee of a breach of the foregoing subsection (a), the party discovering the
breach shall give prompt written notice to the other parties.
Section 3.21 Reports to the Guarantor; Certificate Account
Statements.
Not later than fifteen days after each Distribution Date, the Master
Servicer shall forward to the Guarantor, upon request, a statement prepared by
the Master Servicer setting forth the status of the Certificate Account as of
the close of business on such Distribution Date and showing, for the period
covered by such statement, the aggregate amount of deposits into and
withdrawals from the Certificate Account of each category of deposit specified
in Section 3.05(b) and each category of withdrawal specified in Section
3.08(a). Such statement may be in the form of the then current Xxxxxx Xxx
Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program
with appropriate additions and changes, and shall also include information as
to the aggregate of the outstanding principal balances of all of the Mortgage
Loans as of the last day of the calendar month immediately preceding such
Distribution Date.
Section 3.22 Group 1 Mortgage Loans Subject to Relief Act.
If any of the Group 1 Mortgage Loans becomes subject to the Relief
Act, the Master Servicer shall, with respect to such Group 1 Mortgage Loan,
complete Xxxxxx Mae Special Information Worksheet (for Military Indulgence)
substantially in the form set forth on Exhibit L-1 hereto and shall require
the related Mortgagor to complete Xxxxxx Xxx Form 180 Request For Military
Indulgence substantially in the form set forth as Exhibit L-2 hereto. The
Master Servicer shall retain the executed originals of such forms in its
servicing files related to such Group 1 Mortgage Loan and, upon the
Guarantor's request, shall promptly deliver such forms to the Guarantor at the
address specified by the Guarantor, or if no such address is specified, to
Xxxxxx Mae, Management Portfolio Processing Unit, 00000 Xxxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Mail Stop: 5H-1W-06. Each Remittance Report delivered
by the Master Servicer to the Guarantor pursuant to Section 4.04 in connection
with a Distribution Date
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shall include a schedule of the Group 1 Mortgage Loans subject to the Relief
Act on such Distribution Date and shall set forth the amount of Relief Act
Interest Shortfalls for such Distribution Date in connection with each such
Group 1 Mortgage Loan.
ARTICLE IV.
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance Reports.
(a) Within two Business Days after each Determination Date, the
Master Servicer shall deliver to the Guarantor and the Trustee by telecopy or
electronic mail (or by such other means as the Master Servicer, the Guarantor
and the Trustee, as the case may be, may agree from time to time) a Remittance
Report with respect to the related Distribution Date. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Master Servicer.
(b) Subject to the conditions of this Article IV, the Master
Servicer, as required below, shall make an Advance and deposit such Advance in
the Certificate Account. Each such Advance shall be remitted to the
Certificate Account no later than 1:00 p.m. Pacific time on the Master
Servicer Advance Date in immediately available funds. The Trustee will provide
notice to the Guarantor and the Master Servicer by telecopy by the close of
business on any Master Servicer Advance Date in the event that the amount
remitted by the Master Servicer to the Trustee on the Distribution Account
Deposit Date is less than the Advances required to be made by the Master
Servicer for such Distribution Date. The Master Servicer shall be obligated to
make any such Advance only to the extent that such advance would not be a
Nonrecoverable Advance. If the Master Servicer shall have determined that it
has made a Nonrecoverable Advance or that a proposed Advance or a lesser
portion of such Advance would constitute a Nonrecoverable Advance, the Master
Servicer shall deliver (i) to the Trustee for the benefit of the
Certificateholders funds constituting the remaining portion of such Advance,
if applicable, and (ii) to the Depositor, the Guarantor, each Rating Agency
and the Trustee an Officer's Certificate setting forth the basis for such
determination.
(c) In lieu of making all or a portion of such Advance from its own
funds, the Master Servicer may (i) cause to be made an appropriate entry in
its records relating to the Certificate Account that any Amount Held for
Future Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required
to be distributed pursuant to this Agreement. The Master Servicer shall be
entitled to be reimbursed from the Certificate Account for all Advances of its
own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Mortgage Loan shall continue
until such Mortgage Loan is paid in full or the related Mortgaged Property or
related REO Property has been liquidated or until the purchase or
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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.
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 Contracts will be distributed as described in paragraph (b)
below):
(i) concurrently (a) from the Interest Funds for Loan Group 1 (and
if a Loan Group 1 Deficiency Amount exists, an amount from Interest Funds
from Loan Group 2 (after the distribution of Interest Funds from Loan
Group 2 as provided in clause (b) below) equal to such Interest Funds
times a fraction the numerator of which is such Loan Group 1 Deficiency
Amount and the denominator of which is the aggregate Stated Principal
Balances of the Group 2 Mortgage Loans for such Distribution Date), first
to the Guarantor, the amount of the Guaranty Fee and the Guarantor
Reimbursement Amount, and second, to the Class 1-A-1 Certificates, the
Current Interest and any Interest Carry Forward Amount for such class,
and (b) from the Interest Funds for Loan Group 2 (and if a Loan Group 2
Deficiency Amount exists, an amount from Interest Funds from Loan Group 1
(after the distribution of Interest Funds from Loan Group 1 as provided
in clause (a) above) equal to such Interest Funds times a fraction the
numerator of which is such Loan Group 2 Deficiency Amount and the
denominator of which is the aggregate Stated Principal Balances of the
Group 1 Mortgage Loans for such Distribution Date), to the Class 2-A-1
Certificates, the Current Interest and any Interest Carry Forward Amount
for each such class;
(ii) from the Interest Funds for Loan Group 2 (and if a Loan Group 2
Deficiency Amount exists, an amount from Interest Funds from Loan Group 1
(after the distribution of Interest Funds from Loan Group 1 as provided
in clause (1) above) equal to such Interest Funds times a fraction the
numerator of which is such Loan Group 2 Deficiency Amount and the
denominator of which is the aggregate Stated Principal
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Balances of the Group 1 Mortgage Loans for such Distribution Date), to
the Class 2-M-1 Certificates, the Current Interest for such class,
(iii) from the Interest Funds for both Loan Groups to the Class M-2
Certificates, the Current Interest for such Class;
(iv) from the Interest Funds for both Loan Groups to the Class B-1
Certificates, the Current Interest for such Class; and
(v) any remainder, as part of the Excess Cashflow.
(b) On each Distribution Date on or prior to each Cap Contract
Termination Date, amounts received by the Trustee in respect of the related
Cap Contract for such Distribution Date will be withdrawn from the Carryover
Reserve Fund and distributed (i) in the case of any such amounts received on
the First Cap Contract (and any such amounts received on the Second Cap
Contract after application pursuant to clause (ii) below) to the Class 1-A-1
Certificates to the extent needed to pay any Net Rate Carryover, (ii) in the
case of any such amounts received on the Second Cap Contract (and any such
amounts received on the First Cap Contract after application pursuant to
clause (i) above) sequentially, to the Class 2-A-1 Certificates and the Class
2-M-1 Certificates to the extent needed to pay any Net Rate Carryover, and
(iii) from any such amounts received on both Cap Contracts after application
pursuant to clauses (i) and (ii) above, sequentially, to the Class M-2
Certificates and the Class B-1 Certificates to the extent needed to pay any
Net Rate Carryover.
(c) [reserved].
(d) On each Distribution Date, the Principal Distribution Amount for
such Distribution Date with respect to each Loan Group 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) (i) from the Principal Distribution Amount for Loan Group 1
to the Guarantor the amount of the unpaid Guaranty Fee and the
Guarantor Reimbursement Amount, then from any remaining Principal
Distribution Amount for Loan Group 1 to the Class 1-A-1 Certificates
until the Certificate Principal Balance thereof is reduced to zero
and (ii) the Principal Distribution Amount for Loan Group 2
sequentially to the Class A-R Certificates and the Class 2-A-1
Certificates in that order, until the Certificate Principal Balance
thereof is reduced to zero; provided, however that (i) after the
Certificate Principal Balance of the Class 1-A-1 Certificates has
been reduced to zero, the Principal Distribution Amount from both
Loan Groups will be applied to the Class 2-A-1 Certificates until
the Certificate Principal Balance thereof is reduced to zero and
(ii) after the Certificate Principal Balances of the Group 2
Certificates and the Class B-1 Certificates have been reduced to
zero, the Principal Distribution Amount from both Loan Groups will
be applied to the Class 1-A-1 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
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(B) the remaining Principal Distribution Amount for both Loan
Groups, to the Class 2-M-1 Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(C) the remaining Principal Distribution Amount for both Loan
Groups, to the Class M-2 Certificates, until the Certificate
Principal Balance thereof is reduced to zero;
(D) the remaining Principal Distribution Amount for both Loan
Groups, to the Class B-1 Certificates, until the Certificate
Principal Balance thereof is reduced to zero; and
(E) any remainder, as part of the Excess Cashflow.
(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) (i) from the Principal Distribution Amount for Loan Group 1
to the Guarantor the amount of the unpaid Guaranty Fee and the
Guarantor Reimbursement Amount, then from any remaining Principal
Distribution Amount for Loan Group 1 to the Class 1-A-1 Certificates
in an amount equal to the Class 1-A-1 Principal Distribution Amount
until the Certificate Principal Balance thereof is reduced to zero
and (ii) from the Principal Distribution Amount for Loan Group 2, to
the Class 2-A-1 Certificates in an amount equal to the Class 2-A-1
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero, provided, however that (i) after
the Certificate Principal Balance of the Class 1-A-1 Certificates
has been reduced to zero, the Principal Distribution Amount from
both Loan Groups will be applied to the Class 2-A-1 Certificates in
an amount equal to sum of the Class 2-A-1 Principal Distribution
Amount and any undistributed Class 1-A-1 Principal Distribution
Amount until the Certificate Principal Balance thereof is reduced to
zero and (ii) after the Certificate Principal Balances of the Group
2 Certificates and the Class B-1 Certificates have been reduced to
zero, the Principal Distribution Amount from both Loan Groups will
be applied to the Class 1-A-1 Certificates in an amount equal to sum
of (x) the Class 1-A-1 Principal Distribution Amount, (x) any
undistributed Class 2-A-1 Principal Distribution Amount and (y) any
undistributed Class 2-M-1 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to zero;
(B) from the remaining Principal Distribution Amount for Loan
Group 2, to the Class 2-M-1 Certificates, in an amount equal to the
Class 2-M-1 Principal Distribution Amount until the Certificate
Principal Balance thereof is reduced to zero, provided, however that
after the Certificate Principal Balance of the Class 2-A-1
Certificates has been reduced to zero, the Principal Distribution
Amount from both Loan Groups will be applied to the Class 2-M-1
Certificates in an amount equal to the sum of (x) the Class 2-M-1
Principal Distribution Amount, (y) any undistributed Class 1-A-1
Principal Distribution Amount and (z) any
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undistributed Class 2-A-1 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to zero,
(C) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero;
(D) to the Class B-1 Certificates, the Class B-1 Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero; and
(E) any remainder, as part of the Excess Cashflow.
(e) With respect to any Distribution Date, any Excess Cashflow will
be paid to the classes of certificates as follows:
(i) from Excess Cashflow for Loan Group 1, to the Guarantor any
remaining Guarantor Reimbursement Amount;
(ii) from Excess Cashflow from both Loan Groups, to the holders of
the class or classes of Offered Certificates and the Class 1-A-1
Certificates then entitled to receive distributions in respect of
principal, in an amount equal to the Extra Principal Distribution Amount,
payable to such holders as part of the Principal Distribution Amount
pursuant to Section 4.04(d) above; provided however, until the
Certificate Principal Balance of the Group 2 Certificates and the Class
B-1 Certifcates has been reduced to zero, distributions of any Extra
Principal Distribution Amount in respect of the Class 1-A-1 Certificates
will be limited such that that the aggregate of the amounts of principal
of and interest distributed to the Class 1-A-1 Certificates on such
Distribution Date (including but not limited to any such Extra Principal
Distribution Amount) will not exceed the aggregate of all Interest Funds
and the Principal Remittance Amount for Loan Group 1 for such
Distribution Date;
(iii) from any remaining Excess Cashflow (a) in the case of Excess
Cashflow received from Loan Group 1 (and any such amounts received from
Loan Group 2 after application pursuant to clause (b) below) to the Class
1-A-1 Certificates to the extent needed to pay any Net Rate Carryover for
such class, (b) in the case of Excess Cashflow received from Loan Group 2
(and any such amounts received from Loan Group 1 after application
pursuant to clause (a) above) sequentially, to the Class 2-A-1 and Class
2-M-1 Certificates to the extent needed to pay any Net Rate Carryover for
each such class, and (iii) from any such amounts received from both Loan
Groups after application pursuant to clauses (a) and (b) above)
sequentially, to the Class M-2 and Class B-1 Certificates to the extent
needed to pay any Net Rate Carryover for each such class;
(iv) from any remaining Excess Cashflow from Loan Group 2, to the
holders of the Class 2-A-1 Certificates, in an amount equal to the Unpaid
Realized Loss Amounts for such class;
(v) from any remaining Excess Cashflow from Loan Group 2, to the
holders of the Class 2-M-1 Certificates, in an amount equal to any
Interest Carry Forward Amount for such class;
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(vi) from any remaining Excess Cashflow from Loan Group 2, to the
holders of the Class 2-M-1 Certificates, in an amount equal to the Unpaid
Realized Loss Amounts for the Class 2-M-1 Certificates;
(vii) from any remaining Excess Cashflow from both Loan Groups, to
the holders of the Class M-2 Certificates, in an amount equal to any
Interest Carry Forward Amount for such class;
(viii) from any remaining Excess Cashflow from both Loan Groups, to
the holders of the Class M-2 Certificates, in an amount equal to the
Unpaid Realized Loss Amounts for the Class M-2 Certificates;
(ix) from any remaining Excess Cashflow from both Loan Groups, to
the holders of the Class B-1 Certificates, in an amount equal to any
Interest Carry Forward Amount for such class;
(x) from any remaining Excess Cashflow from both Loan Groups, to the
holders of the Class B-1 Certificates, in an amount equal to the Unpaid
Realized Loss Amounts for the Class B Certificates;
(xi) from any remaining Excess Cashflow from both Loan Groups, to
pay the Class N Certificates, (x) the Current Interest for such Class,
(y) the Interest Carry Forward Amount for such Class and (z) any
remaining Excess Cashflow to reduce the Notional Amount of the Class N
Certificates, until the Notional Amount of the Class N Certificates has
been reduced to zero;
(xii) to the Class X Certificates, the Class X Distributable Amount;
and
(xiii) any remaining Excess Cashflow, to the Class A-R Certificates.
(f) To the extent that a Class of 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 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.
(g) On each Distribution Date, all Prepayment Charges (including
amounts deposited in connection with the full or partial waiver of such
Prepayment Charges pursuant to Section 3.20) shall be allocated to the Class N
Certificates for so long as the Notional Amount of the Class N Certificates is
greater than zero pursuant to Section 4.04(e)(xi) above), and to the Class X
Certificates after the Class N Notional Amount has been reduced to zero.
(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-1 Certificates until the Class B-1 Certificate
Principal Balance is reduced to zero;
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(ii) to the Class M-2 Certificates until the Class M-2 Certificate
Principal Balance is reduced to zero; and
(iii) to the Class 2-M-1 Certificates until the Class 2-M-1
Certificate Principal Balance is reduced to zero.
Subject to Section 9.02 hereof respecting the final distribution, on
each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a
bank or other entity having appropriate facilities therefor, if (i) such
Holder has so notified the Trustee at least 5 Business Days prior to the
related Record Date and (ii) such Holder shall hold Regular Certificates with
aggregate principal denominations of not less than $1,000,000 or evidencing a
Percentage Interest aggregating 10% or more with respect to such Class or, if
not, by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 9.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the
name of a Depository shall be made to such Depository in immediately available
funds.
Payments to the Guarantor on each Distribution Date will be made by
wire transfer of immediately available funds to the following account:
FNMA Federal Reserve Account
Telegraphic FNMA NYC ABA 000000000
Ref. GR466 02-T10
On or before 5:00 p.m. Pacific time on the first Business Day
following each Determination Date, the Master Servicer shall deliver a report
to the Trustee (in the form of a computer readable magnetic tape or by such
other means as the Master Servicer and the Trustee may agree from time to
time) and to the Guarantor (using the internet and the following domain name:
xxxxxx_xxxxxxxxxxxxxx@xxxxxxxxx.xxx or by such other means as the Master
Servicer and the Guarantor may agree from time to time) containing such data
and information as agreed to by the Master Servicer, the Guarantor 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 Remittance Amount and Principal Remittance
Amount for each Loan Group 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
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be responsible to recompute, recalculate or verify information provided to it
by the Master Servicer and shall be permitted to conclusively rely on any
information provided to it by the Master Servicer.
Section 4.05 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare
and cause to be forwarded by first class mail to each Holder of a Class of
Certificates of the Trust Fund, the Master Servicer, the Seller, the Guarantor
and the Depositor a statement setting forth for the Certificates:
(i) the amount of the related distribution to Holders of each Class
allocable to principal, separately identifying (A) the aggregate amount
of any Principal Prepayments included therein and (B) the aggregate of
all scheduled payments of principal included therein;
(ii) the amount of such distribution to Holders of each Class
allocable to interest;
(iii) any Interest Carry Forward Amount for each Class;
(iv) the Certificate Principal Balance of each Class after giving
effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Applied Realized Loss
Amounts for such Distribution Date;
(v) the aggregate of the Stated Principal Balance of the Mortgage
Loans for the Mortgage Pool, each Loan Group;
(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) the Net Rate Carryover paid on any Class of Certificates on
such Distribution Date and any Net Rate Carryover remaining on any Class
of Certificates on such Distribution Date;
(ix) the amount of Advances for each Certificate Group included in
the distribution on such Distribution Date;
(x) the amount of Applied Realized Loss Amounts for each Certificate
Group for such Distribution Date;
(xi) the cumulative amount of Applied Realized Loss Amounts for each
Certificate Group to date;
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(xii) the number and aggregate principal amounts of Mortgage Loans
in each Loan Group: (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 in each Loan Group, 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, in each Loan Group 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 in each Loan Group, the
loan number and Stated Principal Balance relating thereto;
(xvii) with respect to each Loan Group, whether a Trigger Event has
occurred;
(xviii) [reserved];
(xix) [reserved];
(xx) with respect to each Distribution Date prior to the end of the
Funding Period, (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 (specifying the
aggregate Stated Principal Balances such Subsequent Mortgage Loans
included in each Loan Group);
(xxi) with respect to the September 2002 Distribution Date, (A) the
remaining amounts in the Pre-Funding Account (if any) at the end of the
Funding Period that are included in Principal Distribution Amount,
specifying the portion thereof allocated to the Class 1-A-1 Certificates,
and (B) the aggregate Stated Principal Balances of the Subsequent
Mortgage Loans for Subsequent Transfer Dates occurring during the related
Due Period (specifying the aggregate Stated Principal Balances such
Subsequent Mortgage Loans included in each Loan Group 1);
(xxii) the amount, if any, received under the Cap Contract for such
Distribution Date;
(xxiii) the amount of Realized Losses applied to the Class 2-M-1,
Class M-2 and Class B-1 Certificates for such Distribution Date;
(xxiv) all payments made by the Master Servicer in respect of
Prepayment Interest Shortfalls for such Distribution Date;
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(xxv) the amount paid by the Guarantor under the Xxxxxx Xxx Guaranty
for such Distribution Date;
(xxvi) all amount paid to the Guarantor in respect of the Guarantor
Reimbursement Amount for such Distribution Date; and
(xxvii) the information set forth in the Prepayment Charge Schedule.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability,
timeliness and accuracy of the information derived from the Master Servicer.
The Trustee will send a copy of each statement provided pursuant to this
Section 4.05 to each Rating Agency. The Trustee may make the above information
available to Certificateholders via the Trustee's website at
xxxx://xxx.xxxxxxxxxxxx.xxx.
On the third Business Day preceding each Distribution Date, the
Trustee shall deliver to the Guarantor (by electronic medium as specified in
the next sentence) a statement identifying the Class Factor for the Class
1-A-1 Certificate. The Trustee shall deliver such statement on or before 3:00
PM (New York time) on such day via the internet using the following domain
name: xxxx_xxxxx@xxxxxxxxx.xxx. If a Guarantor Payment will be payable on a
Distribution Date, all information required under Section 4.05(a) must also be
similarly delivered to the Guarantor on such third Business Day proceeding
such Distribution Date. The second consecutive failure by the Trustee to
deliver the Class Factor (or to deliver an accurate Class Factor) to the
Guarantor shall constitute an event of default and permit the Guarantor to
remove the Trustee for cause; provided that the Master Servicer had delivered
the information set forth above for the related Distribution Date to the
Trustee.
(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;
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(iii) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash
flows described above;
(iv) The original issue discount (or, in the case of the Mortgage
Loans, market discount) or premium accrued or amortized through the end
of such calendar quarter with respect to each related Class of regular or
residual interests created hereunder and to the Mortgage Loans, together
with each constant yield to maturity used in computing the same;
(v) The treatment of losses realized with respect to the Mortgage
Loans or the regular interests created hereunder, including the timing
and amount of any cancellation of indebtedness income of the related
REMIC with respect to such regular interests or bad debt deductions
claimed with respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of the
related REMIC; and
(vii) Any taxes (including penalties and interest) imposed on the
related REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure property"
or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above
shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06 Xxxxxx Mae Guaranty.
On each Distribution Date following receipt of a statement (as set
forth in Section 4.05) that indicates a Deficiency Amount for such
Distribution Date, the Guarantor shall distribute a Guarantor Payment in an
aggregate amount equal to the Deficiency Amount for such Distribution Date
directly to the Holders of the Guaranteed Certificates, without first
depositing such amount in the Distribution Account, as follows: (i) the
Guaranteed Interest Distribution Amount shall be distributed as interest with
respect to the Class 1-A-1 Certificates as provided in Section 4.04(a)(i); and
(ii) the Guaranteed Principal Distribution Amount shall be distributed as
principal with respect to the Class 1-A-1 Certificates as provided in Section
4.04(d)(i)(A) or Section 4.04(d)(ii)(A), as applicable.
Section 4.07 [Reserved]
Section 4.08 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Certificates, the
Carryover Reserve Fund and shall deposit $10,000 therein. The Carryover
Reserve Fund shall be an Eligible Account, and funds on deposit therein shall
be held separate and apart from, and shall not be commingled with, any other
moneys, including without limitation, other moneys held by the Trustee
pursuant to this Agreement.
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(b) On each Distribution Date, the Trustee shall deposit all amounts
received pursuant to the Cap Contracts in the Carryover Reserve Fund. The
Trustee shall make withdrawals from the Carryover Reserve Fund to make
distributions pursuant to Section 4.04(b) hereof. Funds withdrawn from the
Carryover Reserve Fund may not be applied pursuant to any other subsection of
Section 4.04 other than as expressly provided for in this Section 4.08(b).
(c) Any amounts remaining after the distributions required pursuant
to Section 4.04(b) first, will be deposited into the Carryover Reserve Fund up
to an amount equal to the Secondary Carryover Reserve Fund Deposit, second,
distributed to the Class N Certificates, and third, after the Certificate
Principal Balance of the Class N Certificate has been reduced to zero, to the
Class X Certificateholders; provided, however, that if such Cap Contract is
subject to early termination, early termination payments received on such Cap
Contract will be held by the Trustee until the applicable Cap Contract
Termination Date and deposited in the Carryover Reserve Fund as necessary to
cover any Net Rate Carryover on the Certificates entitled thereto on future
Distribution Dates.
(d) Funds in the Carryover Reserve Fund may be invested in Permitted
Investments at the direction of the Majority Holder of the Class X
Certificates. Any net investment earnings on such amounts shall be payable to
the Majority Holder of the Class X Certificates. 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.
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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:
Minimum Integral Multiples Original Certificate
Class Denomination in Excess of Minimum Principal Balance
----- ------------ -------------------- -----------------
1-A-1 $20,000 $1,000 $605,800,000
2-A-1 $20,000 $1,000 $244,160,000
2-M-1 $20,000 $1,000 $16,800,000
M-2 $20,000 $1,000 $38,595,000
B-1 $20,000 $1,000 $24,645,000
A-R $99.95(2) N/A $100
N N/A N/A $70,000,000(1)
X N/A N/A N/A
-------------------------------
(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
exchanges of Certificates as herein provided. Upon surrender for registration
of Transfer of any
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Certificate, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Trustee duly
executed by the holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No Transfer of 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
acceptable in form and substance to the Master Servicer and the Depositor.
Notwithstanding
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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 affidavits, certifications
and opinions referred to above in this Section 5.02 shall not be an expense of
the Trust Fund, the Trustee, the Depositor, the Seller or the Master Servicer.
(e) The beneficial ownership of the Class N Certificates and the
Class X Certificates shall not be transferred to a Non-United States Person
unless such beneficial ownership is transferred to a Non-United States Person
who will at all times be a Proportionate Holder. Neither the Class N nor the
Class X Certificate shall be pledged or used as collateral for any other
obligation if it would cause any portion of the Trust to be treated as a
taxable mortgage pool under Section 7701(i) of the Code. These restrictions on
transfers of a Class X and Class N
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Certificates set forth in this Section 5.02(f) shall cease to apply (and the
applicable portions of any legend on a Class X or Class N Certificate may be
deleted) with respect to transfers occurring after delivery to the Trustee of
an Opinion of Counsel, which Opinion of Counsel shall not be an expense 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 or tax reporting obligation on the Trust Fund, a
Certificateholder or another Person.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and of the ownership thereof and (b) there is
delivered to the Master Servicer, the Trustee and the Guarantor such security
or indemnity as may be required by them to save each of them harmless, then,
in the absence of notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute, authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 5.03, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the Trustee)
connected therewith. Any replacement Certificate issued pursuant to this
Section 5.03 shall constitute complete and indefeasible evidence of ownership
in the Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time. All Certificates surrendered
to the Trustee under the terms of this Section 5.03 shall be canceled and
destroyed by the Trustee in accordance with its standard procedures without
liability on its part.
Section 5.04 Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master
Servicer or the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Master Servicer, the Trustee nor any agent of the
Master Servicer or the Trustee shall be affected by any notice to the
contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor or Master Servicer shall request such information in writing from
the Trustee, then the Trustee shall, within ten Business Days after the
receipt of such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The
Depositor and every Certificateholder, by receiving and holding a Certificate,
agree that the Trustee shall not be held
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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;
(b) the Depositor, the Seller, the Master Servicer and the Trustee
may deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of
the respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued pursuant to Section 5.08, the
Depository will make book-entry transfers among the Depository Participants
and receive and transmit distributions of principal and interest on the
related Certificates to such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may
be given by Certificate Owners (acting through the Depository and the
Depository Participants) owning Book-Entry Certificates evidencing the
requisite percentage of principal amount of such Class of Certificates.
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Section 5.07 Notices to Depository.
Whenever any notice or other communication is required to be given
to Certificateholders of the Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates shall
have been issued to the related Certificate Owners, the Trustee shall give all
such notices and communications to the Depository.
Section 5.08 Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to
any Certificates, (a) the Depositor advises the Trustee that the Depository is
no longer willing or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Trustee or the
Depositor is unable to locate a qualified successor, (b) the Depositor, at its
sole option, advises the Trustee that it elects to terminate the book-entry
system with respect to such Certificates through the Depository or (c) after
the occurrence and continuation of an Event of Default, Certificate Owners of
such Book-Entry Certificates having not less than 51% of the Voting Rights
evidenced by any Class of Book-Entry Certificates advise the Trustee and the
Depository in writing through the Depository Participants that the
continuation of a book-entry system with respect to Certificates of such Class
through the Depository (or its successor) is no longer in the best interests
of the Certificate Owners of such Class, then the Trustee shall notify all
Certificate Owners of such Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners of such Class requesting the same. The
Depositor shall provide the Trustee with an adequate inventory of certificates
to facilitate the issuance and transfer of Definitive Certificates. Upon
surrender to the Trustee of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall authenticate and deliver such Definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in
delivery of such instructions and each may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of such
Definitive Certificates, all references herein to obligations imposed upon or
to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of such
Definitive Certificates as Certificateholders hereunder.
Section 5.09 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense
an office or offices or agency or agencies in New York City where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates its offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Trust MBS Administration, as offices for such
purposes. The Trustee will give prompt written notice to the
Certificateholders of any change in such location of any such office or
agency.
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ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER
Section 6.01 Respective Liabilities of the Depositor, the Master
Servicer and the Seller.
The Depositor, the Master Servicer and the Seller shall each be
liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor, the Master
Servicer or the Seller.
The Depositor will keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of
the United States or under the laws of one of the states thereof and will
obtain and preserve its qualification or registration to do business as a
foreign partnership in each jurisdiction in which such qualification or
registration is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Depositor, the Master Servicer or the
Seller may be merged or consolidated, or any Person resulting from any merger
or consolidation to which the Depositor, the Master Servicer or the Seller
shall be a party, or any person succeeding to the business of the Depositor,
the Master Servicer or the Seller, shall be the successor of the Depositor,
the Master Servicer or the Seller, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided that
the successor or surviving Person to the Master Servicer shall be qualified to
service mortgage loans on behalf of, Xxxxxx Mae or Xxxxxxx Mac.
Section 6.03 Limitation on Liability of the Depositor, the Seller,
the Master Servicer, the Guarantor and Others.
None of the Depositor, the Seller, the Master Servicer or the
Guarantor or any of the directors, officers, employees or agents of the
Depositor, the Seller, the Master Servicer or the Guarantor 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
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Depositor, the Seller, the Master Servicer, the Guarantor or any such Person
against any breach of representations or warranties made by it herein or
protect the Depositor, the Seller, the Master Servicer, the Guarantor 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, the Guarantor and any
director, officer, employee or agent of the Depositor, the Seller, the Master
Servicer or the Guarantor 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, the
Guarantor and any director, officer, employee or agent of the Depositor, the
Seller, the Master Servicer or the Guarantor 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, the Master Servicer or the Guarantor 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, the Master Servicer or the Guarantor 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, the Master Servicer and the Guarantor shall be entitled
to be reimbursed therefor out of the Certificate Account as provided by
Section 3.08 hereof.
The Master Servicer (except the Trustee to the extent it has
succeeded the Master Servicer as required hereunder) indemnifies and holds the
Guarantor harmless against any and all claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that the Guarantor may sustain in any way related to
the failure of the Master Servicer to perform its duties and service the
Mortgage Loans in compliance with the terms of this Agreement. The Master
Servicer shall immediately notify the Guarantor if a claim is made that may
result in such claims, losses, penalties, fines, forfeitures, legal fees or
related costs, judgments, or any other costs, fees and expenses, and the
Master Servicer shall assume (with the consent of the Guarantor) the defense
of any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment
or decree which may be entered against the Master Servicer and/or the
Guarantor in respect of such claim. The provisions of this paragraph shall
survive the termination of this Agreement and the payment of the outstanding
Certificates.
Section 6.04 Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that its duties hereunder
are no longer permissible under applicable law or (ii) with the written
consent of the Trustee and the Guarantor and written confirmation from each
Rating Agency (which confirmation shall be furnished to the Depositor
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and the Trustee) that such resignation will not cause such Rating Agency to
reduce the then current rating of the Certificates. Any such determination
pursuant to clause (i) of the preceding sentence permitting the resignation of
the Master Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trustee. No resignation of the Master Servicer shall become
effective until the Trustee or a successor servicer designated by the
Guarantor (subject to Section 2.08) shall have assumed the Master Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement. If the Guarantor shall not have designated a successor servicer
within 15 days after the receipt by it of a request so to do, the Trustee
shall have the power to make such appointment.
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.
The Master Servicer shall provide the Trustee and the Guarantor
(upon such party's reasonable request) with copies of any such insurance
policies and fidelity bond. The Master Servicer shall be deemed to have
complied with this provision if an Affiliate of the Master Servicer has such
errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Master Servicer.
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 Guarantor or Holders of
Certificates evidencing not less than 25% of the Voting Rights evidenced
by the Certificates; or
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(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 Guarantor or 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 of the Guarantor or 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 and the
Guarantor (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,
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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 seller/servicer in good standing, that has a net worth of
at least $15,000,000, that is reasonably acceptable to the Guarantor and that
is willing to service the Mortgage Loans and executes and delivers to the
Depositor and the Trustee an agreement accepting such delegation and
assignment, that contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer
(other than liabilities and indemnities of the Master Servicer under Section
6.03 hereof incurred prior to termination of the Master Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement;
and provided further that each Rating Agency acknowledges that its rating of
the Certificates in effect immediately prior to such assignment and delegation
will not be qualified or reduced as a result of such assignment and
delegation. No appointment of a successor to the Master Servicer hereunder
shall be effective until the Trustee shall have consented thereto, and written
notice of such proposed appointment shall have been provided by the Trustee to
each Certificateholder. The Trustee shall not resign as servicer until a
successor servicer has been appointed and has accepted such appointment.
Pending appointment of a successor to the Master Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall,
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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 promptly upon receipt of the original with evidence of recording
thereon or a copy certified by the public recording office in which such
assignment was recorded.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, to the Guarantor and to each Rating Agency.
(b) Within 10 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and the Guarantor
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
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 that are specifically required to be furnished
pursuant to any provision of this Agreement shall examine them to determine
whether they conform to the requirements of this Agreement, to the extent
provided in this Agreement. If any such instrument is found not to conform to
the requirements of this Agreement in a material manner, the Trustee shall
take action as it deems appropriate to have the instrument corrected.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure
to perform its obligations in compliance with this Agreement, or any liability
that would be imposed by reason of its willful misfeasance or bad faith;
provided that:
(i) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable,
individually or as Trustee, except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Trustee and the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Agreement that it reasonably believed in good
faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable, individually or as Trustee,
for an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless the Trustee was grossly
negligent or acted in bad faith or with willful misfeasance; and
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(iii) the Trustee shall not be liable, individually or as Trustee,
with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the direction of the Guarantor or
Holders of each Class of Certificates evidencing not less than 25% of the
Voting Rights of such Class relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Agreement.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable, individually or as Trustee,
for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default that may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by the Guarantor
or the Holders of each Class of Certificates evidencing not less than 25%
of the Voting Rights of such Class; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee not reasonably assured to
the Trustee by the Guarantor or such Certificateholders, the Trustee may
require reasonable indemnity against such expense, or liability from the
Guarantor or such Certificateholders as a condition to taking any such
action;
(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;
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(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
(ix) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders or the Guarantor,
pursuant to the provisions of this Agreement, unless such
Certificateholders or the Guarantor, as applicable, shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof
at the trial or other proceeding relating thereto, and any such suit, action
or proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
Section 8.03 Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Trustee's execution and authentication of the
Certificates. The Trustee shall not be accountable for the use or application
by the Depositor or the Master Servicer of any funds paid to the Depositor or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Certificate Account by the Depositor or the Master
Servicer.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must
engage persons not regularly in its employ to perform acts or services on
behalf of the Trust Fund, which acts or services are not in
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the ordinary course of the duties of a trustee, paying agent or certificate
registrar, in the absence of a breach or default by any party hereto, the
reasonable compensation, expenses and disbursements of such persons, except
any such expense, disbursement or advance as may arise from its negligence,
bad faith or willful misconduct). The Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified by the Master Servicer
and held harmless against any loss, liability or expense (i) incurred in
connection with any legal action relating to this Agreement or the
Certificates, or in connection with the performance of any of the Trustee's
duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of
the Trustee's duties hereunder or by reason of reckless disregard of the
Trustee's obligations and duties hereunder and (ii) resulting from any error
in any tax or information return prepared by the Master Servicer. Such
indemnity shall survive the termination of this Agreement or the resignation
or removal of the Trustee hereunder.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on
the Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
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 trust
hereby created by giving written notice thereof to the Guarantor, the
Depositor, the Master Servicer and the Certificateholders. Upon receiving such
notice of resignation, the Guarantor shall promptly appoint a successor
Trustee (reasonably acceptable to the Depositor) by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor Trustee and to the Holders of Certificates entitled to at least
51% of the Voting Rights. A copy of such instrument shall be delivered to the
Depositor, the Certificateholders, the Trustee and the Master Servicer by the
Guarantor. If no successor Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning
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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, or the Guarantor (ii) the
Trustee shall become incapable of acting, or shall be adjudged as bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or (iii)(A) a tax is imposed with respect to the Trust Fund by
any state in which the Trustee or the Trust Fund is located, (B) the
imposition of such tax would be avoided by the appointment of a different
trustee and (C) the Trustee fails to indemnify the Trust Fund against such
tax, then the Depositor, the Guarantor 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, with the consent of the Guarantor, 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
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acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Depositor.
Section 8.09 Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of
Section 8.06 hereof without the execution or filing of any paper or further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee and the Guarantor 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 or the Guarantor shall not have approved such appointment
within 15 days after the receipt by it of a request so to do, or in the case
an Event of Default shall have occurred and be continuing, the Trustee or the
Guarantor 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
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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 trustee or co-trustee shall refer to this
Agreement and the conditions of this Article VIII. Each separate trustee and
co-trustee upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision
of this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee and a copy thereof given to the Master Servicer and the
Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11 Tax Matters.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that the 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 by the
Trustee to Certificateholders and the Guarantor 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
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information at the time or times in the manner required by the Code for the
Trust Fund; (c) make or cause to be made elections, on behalf of each REMIC
created hereunder to be treated as a REMIC on the federal tax return of each
such REMIC for its first taxable year (and, if necessary, under applicable
state law); (d) prepare and forward, or cause to be prepared and forwarded, to
the Certificateholders and to the Internal Revenue Service and, if necessary,
state tax authorities, all information returns and reports as and when
required to be provided to them in accordance with the REMIC Provisions,
including without limitation, the calculation of any original issue discount
using the Prepayment Assumption; (e) provide information necessary for the
computation of tax imposed on the transfer of a Class A-R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be
charged to the Person liable for such tax); (f) to the extent that they are
under its control conduct the affairs of the Trust Fund at all times that any
Certificates are outstanding so as to maintain the status of each REMIC
created hereunder as a REMIC under the REMIC Provisions; (g) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any REMIC created hereunder; (h) pay, from
the sources specified in the last paragraph of this Section 8.11, the amount
of any federal, state and local taxes, including prohibited transaction taxes
as described below, imposed on any REMIC created hereunder prior to the
termination of the Trust Fund when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Trustee from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); (i) sign or cause to be signed
federal, state or local income tax or information returns; (j) maintain
records relating to each REMIC created hereunder, including but not limited to
the income, expenses, assets and liabilities of each such REMIC, and the fair
market value and adjusted basis of the Trust Fund property determined at such
intervals as may be required by the Code, as may be necessary to prepare the
foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent, after consultation with the Guarantor
and upon accommodation of the Guarantor's reasonable requests, 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. Additionally, on or before April 15 of each year,
the Trustee will deliver to the Guarantor, upon request, a certificate of
compliance with the REMIC Provisions for the preceding calendar year,
substantially in the form of Exhibit K.
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
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Depositor hereby indemnifies the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations
of the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in Section 860F(a)(2) of the Code, on the "net
income from foreclosure property" of the Trust Fund as defined in Section
860G(c) of the Code, on any contribution to the Trust Fund after the startup
day pursuant to Section 860G(d) of the Code, or any other tax is imposed,
including, without limitation, any federal, state or local tax or minimum tax
imposed upon the Trust Fund pursuant to Sections 23153 and 24872 of the
California Revenue and Taxation Code if not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax
arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) (x) the Master Servicer, in the case of
any such minimum tax, and (y) any party hereto (other than the Trustee) to the
extent any such other tax arises out of or results from a breach by such other
party of any of its obligations under this Agreement or (iii) in all other
cases, or in the event that any liable party here fails to honor its
obligations under the preceding clauses (i) or (ii), any such tax will be paid
first with amounts otherwise to be distributed to the Class A-R
Certificateholders , and second with amounts otherwise to be distributed to
all other Certificateholders in the following order of priority: first, to the
Class 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 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 the Secondary Carryover Reserve Fund Deposit, in favor of
the Certificateholders (other than the Holders of the Class A-R, Class X and
Class N Certificates). Thus, each Certificate (other than the Class A-R, Class
X and Class N Certificates) shall be treated as representing ownership of not
only Upper Tier REMIC Regular Interests, but also ownership of an interest in
an interest rate cap contract. For purposes of determining the issue price of
the Upper Tier REMIC Regular interests, the Trustee shall assume that the
interest rate cap contract has a value of $10,000.
In the event that any Person holds pro rata shares of the ownership
of the Class N Certificates and the Class X Certificates (a "Proportionate
Holder"), the Trustee shall treat such Person as the holder of the ownership
of the same pro-rata share of the Class X Interest. In the event that any
Person holds non-pro rata shares of the ownership of the Class N Certificates
and the Class X Certificates (a "Disproportionate Holder"), the Trustee shall
treat such Person, and all other Disproportionate Holders, as partners in a
partnership that owns the Class X Interest
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(other than the shares of the Class X Interest held by any Proportionate
Holders) for federal income tax purposes and shall not treat the Class N and
Class X Certificates held by the Disproportionate Holders as interests in any
REMIC created hereunder. By acquiring the Class N Certificates and the Class X
Certificates, the respective Holders will agree to treat the Class N
Certificates and the Class X Certificates in the manner described in the
preceding sentences for federal income tax purposes. In the event the second
sentence of this paragraph applies, (i) a separate capital account shall be
established and maintained for each Holder of a Class N or Class X Certificate
in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv), which shall
be credited with income or gain and debited by any expenses or losses and
distributions allocable to such Certificates, (ii) the Class N Certificates
shall be allocated income in an amount equal to interest at the Pass-Through
Rate thereon and any original issue discount that would be reportable thereon
if the Class N Certificate were a debt instrument issued on the date ownership
of the Class N and Class X Certificates is separated, with a principal balance
equal to its Notional Amount, (iii) the Class X and Class N Certificates shall
be allocated income with respect to all Prepayment Charges (including amounts
in connection with the full or partial waiver of such Prepayment Charges or
premiums pursuant to Section 2.03) in accordance with the allocation of such
amounts pursuant to Section 4.04, (iv) the Class X and Class N Certificates
shall be allocated accruals (under any reasonable method) of any "cap
premiums" deemed received on the date ownership of the Class X and Class N
Certificates is separated in respect of the obligation of the Class X Interest
to pay Net Rate Carryover, and shall be allocated expense in respect of any
actual payment of such Net Rate Carryover based on which one of such Classes
economically bears such expense, (v) the Class X Certificates shall be
allocated all remaining income and any expenses and Realized Losses with
respect to the Class X Interest, until the capital account of the Class X
Certificates is reduced to zero, and any remaining expenses or losses shall be
allocated to the Class N Certificates, (vi) neither the Class N Certificates
nor the Class X Certificates shall be responsible for restoring any deficit to
its capital account, (vii) upon termination of the Trust Fund pursuant to
Article X, all amounts available for distribution to Holders of the Class N
and Class X Certificates shall be distributed in accordance with their
positive capital account balances, first to the Class N Certificates until
their Notional Amount and any accrued but unpaid interest thereon are reduced
to zero, and then to the Class X Certificates, and (viii) the Trustee shall
maintain books and records with respect to the partnership on a calendar year
basis (unless a different taxable year shall be required by the Code) and
shall prepare or cause to be prepared, and cause the Holder of the largest
Percentage Interest of the Class X Certificates to sign and file or cause to
be filed all federal and state tax and information returns for the
partnership, and shall furnish or cause to be furnished Schedule K-1's to the
Holders of the Class N and Class X Certificates at the time required by the
Code. Unless otherwise directed by a majority of the Percentage Interests of
the Class X and Class N Certificates, the Trustee shall not make an election
under Section 754 of the Code. The Holder of the largest Percentage Interest
of the Class X Certificates, by acceptance of its Class X Certificate, agrees
to act as "tax matters partner" (within the meaning of Section 6231(a)(7) of
the Code and to sign and timely file all federal and state partnership tax and
information returns prepared by the Trustee pursuant to this Section 8.11.
Section 8.12 [Reserved.]
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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, the Guarantor and the Trustee created hereby shall terminate upon the
earlier of (a) the purchase by the Majority Holder of the Class X Certificate
(or if such Holder does not elect to exercise such purchase option, the Master
Servicer) of all of the Mortgage Loans (and REO Properties) remaining in the
Trust Fund at the price equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan in the Trust Fund (other than in respect of REO
Property), (ii) accrued interest thereon at the applicable Mortgage Rate (or,
if such repurchase is effected by the Master Servicer, at the applicable Net
Mortgage Rate), (iii) the appraised value of any REO Property in the Trust
Fund (up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Master
Servicer and the Trustee and (iv) any unreimbursed Servicing Advances, and the
principal portion of any unreimbursed Advances, made on the Mortgage Loans
prior to the exercise of such repurchase and (b) the later of (i) the maturity
or other liquidation (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to related Certificateholders of all
amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United
States to the Court of St. James's, living on the date hereof and (ii) the
Latest Possible Maturity Date.
The right to purchase all Mortgage Loans and REO Properties by the
Majority Holder of the Class X Certificates or the Master Servicer (the party
exercising such purchase option, the "Terminator") pursuant to clause (a)
above shall be conditioned upon the Stated Principal Balance of the Mortgage
Loans, at the time of any such repurchase, aggregating (a) in the case of
purchase by the Majority Holder of the Class X Certificate, ten percent (10%)
or less and (b) in the case of purchase by the Master Servicer, five percent
(5%) of the 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 a
Loan Group other than the funds in the Certificate Account related to such
Loan Group, the Master Servicer shall direct the Trustee to send a final
distribution notice promptly to each related Certificateholder and the
Guarantor 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 and the Guarantor within five (5) Business Days
after such Determination Date that the final distribution in retirement of
such Class of Certificates is scheduled to be made on the immediately
following
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Distribution Date. Any final distribution made pursuant to the immediately
preceding sentence will be made only upon presentation and surrender of the
related Certificates at the Corporate Trust Office of the Trustee. If the
Master Servicer elects to terminate pursuant to clause (a) of Section 9.01, at
least 20 days prior to the date notice is to be mailed to the affected
Certificateholders, such electing party shall notify the Depositor and the
Trustee of the date such electing party intends to terminate and of the
applicable repurchase price of the related Mortgage Loans and REO Properties.
Notice of any termination, specifying the Distribution Date on which
related Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to related Certificateholders mailed not earlier than the 10th day and
no later than the 15th day of the month immediately preceding the month of
such final distribution. Any such notice shall specify (a) the Distribution
Date upon which final distribution on related Certificates will be made upon
presentation and surrender of such Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and
(d) that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of
such Certificates at the office therein specified. The Master Servicer will
give such notice to each Rating Agency at the time such notice is given to the
affected Certificateholders.
In the event such notice is given, the Master Servicer shall cause
all funds in the Certificate Account to be remitted to the Trustee for deposit
in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of
the Certificates. Upon such final deposit and the receipt by the Trustee of a
Request for Release therefor, the Trustee shall promptly release to the Master
Servicer the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders of each affected Class the
amounts allocable to such Certificates held in the Distribution Account (and,
if applicable, the Carryover Reserve Fund) in the order and priority set forth
in Section 4.04 hereof on the final Distribution Date and in proportion to
their respective Percentage Interests.
In the event that any affected Certificateholders shall not
surrender related Certificates for cancellation within six months after the
date specified in the above mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
related Certificates for cancellation and receive the final distribution with
respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Loan Group. If within one
year after the second notice all related Certificates shall not have been
surrendered for cancellation, the Class R (in the case of Loan Group 1 and
Loan Group 2) shall be entitled to all unclaimed funds and other assets of the
Loan Group that relate to such Class of Certificates and remain subject
hereto.
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Section 9.03 Additional Termination Requirements.
(a) In the event the Terminator exercises its purchase option, the
Trust Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee and the Guarantor have been supplied with an
Opinion of Counsel, at the expense of the Terminator, to the effect that the
failure of the Trust Fund to comply with the requirements of this Section 9.03
will not (i) result in the imposition of taxes on "prohibited transactions" of
a REMIC, or (ii) cause any REMIC created hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding:
(1) The Master Servicer shall establish a 90-day
liquidation period and notify the Trustee thereof, which shall in turn specify
the first day of such period in a statement attached to the Trust Fund's final
Tax Return pursuant to Treasury Regulation Section 1.860F-1. The Master
Servicer shall prepare a plan of complete liquidation and shall otherwise
satisfy all the requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder, as evidenced by an Opinion of Counsel
delivered to the Guarantor, the Trustee, and the Depositor obtained at the
expense of the Terminator;
(2) During such 90-day liquidation period, and at or prior
to the time of making the final payment on the Certificates, the Master
Servicer as agent of the Trustee shall sell all of the assets of the Trust
Fund to the Terminator for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Class A-R 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 Terminator.
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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, Xxxxxx Mae 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, the Seller and
Xxxxxx Xxx 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, Xxxxxx Mae 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
-135-
which are required to consent to any such amendment without the consent of the
Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, neither
the Trustee nor the Guarantor shall consent to any amendment to this Agreement
unless each shall have first received an Opinion of Counsel, which opinion
shall be an expense of the party requesting such amendment but in any case
shall not be an expense of the Trustee, to the effect that such amendment will
not cause the imposition of any tax on the Trust Fund or the
Certificateholders or cause the Trust Fund to fail to qualify as a REMIC at
any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder, the
Guarantor 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
-136-
IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
Section 10.04 Intention of Parties.
It is the express intent of the parties hereto that the conveyance
of the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Depositor, or if for any other
reason this Agreement 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, and upon request to the Guarantor, 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.
-137-
In addition, the Trustee shall promptly furnish to each Rating
Agency, and upon request to the Guarantor, copies of the following:
(i) Each report to Certificateholders described in Section
4.05;
(ii) Each annual statement as to compliance described in
Section 3.17; and
(iii) Each annual independent public accountants' servicing
report described in Section 3.18.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when sent by facsimile
transmission, first class mail or delivered to (i) in the case of the
Depositor, CWABS, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
facsimile number: (000) 000-0000, Attention: Xxxxx X. Xxxxxxx, or such other
address as may be hereafter furnished to the Seller, the Master Servicer, the
Guarantor and the Trustee by the Depositor in writing; (ii) in the case of the
Seller, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000, facsimile number (000) 000-0000, Attention: Xxxxx X. Xxxxxxx, or such
other address as may be hereafter furnished to the Depositor, the Master
Servicer, the Guarantor and the Trustee by the Seller in writing; (iii) in the
case of the Master Servicer, Countrywide Home Loans Servicing LP, 000
Xxxxxxxxxxx Xxx, Xxxx Xxxxxx, Xxxxxxxxxx, facsimile number (000) 000-0000,
Attention: Xxxx Xxxx or such other address as may be hereafter furnished to
the Depositor, the Seller, the Guarantor and the Trustee by the Master
Servicer in writing; (iv) in the case of the Trustee, The Bank of New York,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust MBS
Administration, CWABS, Series 2002-2, or such other address as the Trustee may
hereafter furnish to the Depositor or the Master Servicer; (v) in the case of
Xxxxxx Xxx, 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, X.X. 00000, Attention: Director
of Securities Administration (telecopy number (000) 000-0000 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 postage prepaid, to their respective addresses
appearing in the Certificate Register. A copy of any notice required to be
given hereunder shall also be mailed, upon request, to the Guarantor.
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.
-130-
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
Section 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Certificates
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third party by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, the Holders of Certificates evidencing not less than
25% of the Voting Rights evidenced by the Certificates shall also have made
written request to the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity shall have
neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions
of this Section 10.08, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
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
-139-
Master Servicer relating to the Mortgage Loans, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants selected by the Depositor, the Seller or the Trustee and to
discuss its affairs, finances and accounts relating to the Mortgage Loans with
its officers, employees and independent public accountants (and by this
provision the Master Servicer hereby authorizes such accountants to discuss
with such representative such affairs, finances and accounts), all at such
reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Depositor, the Seller or
the Trustee of any right under this Section 10.09 shall be borne by the party
requesting such inspection; all other such expenses shall be borne by the
Master Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for
any reason whatsoever, and that the Certificates, upon due authentication
thereof by the Trustee pursuant to this Agreement, are and shall be deemed
fully paid.
* * *
-140-
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Seller
and the Trustee have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first
above written.
CWABS, INC.,
as Depositor
By:_________________________________
Name: Xxxxx Xxxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as Seller
By:_________________________________
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
COUNTRYWIDE HOME LOANS
SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By:_________________________________
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By:_________________________________
Name: Xxxxxxxx Xxxxxxxxxxx
Title: Vice President
XXXXXX MAE,
as Guarantor (with respect to the
Class 1-A-1 Certificates)
By:_________________________________
Name:
Title:
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 27th day of June, 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.
---------------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 27th day of June, 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.
________________________
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 27th day of June, 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.
-------------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 27th day of June, 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.
-------------------------------------------
Notary Public
Exhibit A-1
through A-5
[Exhibits A-1 through A-5 are
photocopies of such Certificates as
delivered.]
[See appropriate documents delivered at closing.]
A-1
Exhibit B
Exhibit B is a photocopy
of the Class N Certificate
as delivered.
[See appropriate documents delivered at closing.]
B-1
Exhibit C
Exhibit C is a photocopy
of the Class X Certificate
as delivered.
[See appropriate documents delivered at closing.]
C-1
Exhibit D
Exhibit D is a photocopy
of the Class A-R Certificate
as delivered.
[See appropriate documents delivered at closing.]
D-1
Exhibit E
Exhibit E is a photocopy
of the Tax Matters Person Certificate
as delivered.]
[See appropriate documents delivered at closing.]
E-1
Exhibit F-1 and F-2
[Exhibit F-1 and F-2 are schedules of Mortgage Loans]
[Delivered to Trustee at closing and on file with the Trustee.]
F-1
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Seller]
[Master Servicer]
[Guarantor]
Re: Pooling and Servicing Agreement dated as of June 1, 2002 among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, Federal National Mortgage Association, as Guarantor,
and The Bank of New York, as Trustee, relating to the
Asset-Backed Certificates, Series 2002-2
--------------------------------------------------------------
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) it
has received:
(i) the original Mortgage Note, endorsed by the Seller or the originator
of such Mortgage Loan, without recourse in the following form: "Pay to the
order of , without recourse", 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]
[Guarantor]
Re: Pooling and Servicing Agreement dated as of June 1, 2002 among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer,
Federal National Mortgage Association, as Guarantor, and The
Bank of New York, as Trustee, relating to the Asset-Backed
Certificates, Series 2002-2 [and the Subsequent Transfer
Agreement dated as of _________, 2002 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) it 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
G-2-1
[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) 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 2002-2, CWABS, Inc.,
by The Bank of New York, a New York banking corporation, as trustee
under the Pooling and Servicing Agreement dated as of June 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.
G-2-2
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 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]
[Guarantor]
Re: Pooling and Servicing Agreement dated as of June 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, Federal National
Mortgage Association, as Guarantor, and The Bank of New York,
as Trustee, relating to the Asset-Backed Certificates, Series
2002-2 [and the Subsequent Transfer Agreement dated as of
_________, 2002 (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) it has received:
(i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form:
"Pay to the order of _______________ without recourse", with all
intervening endorsements that show a complete chain of endorsement from
the originator to the Seller, or, if the original Mortgage Note has been
lost or destroyed and not replaced, an original lost note affidavit from
the Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note;
(ii) in the case of each [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 2002-2, CWABS, Inc., by
The Bank of New York, a
G-3-1
New York banking corporation, as trustee under the Pooling and Servicing
Agreement dated as of June 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).
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]
[Guarantor]
Re: Pooling and Servicing Agreement dated as of June 1, 2002 among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer,
Federal National Mortgage Association, as Guarantor, and The
Bank of New York, as Trustee, relating to the Asset-Backed
Certificates, Series 2002-2
---------------------------------------------------------------
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) it 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]
[Guarantor]
Re: Pooling and Servicing Agreement dated as of June 1, 2002 among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer,
Federal National Mortgage Association, as Guarantor, and The
Bank of New York, as Trustee, relating to the Asset-Backed
Certificates, Series 2002-2 [and the Subsequent Transfer
Agreement dated as of ____________, 2002 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) it has received:
(i) the original Mortgage Note, endorsed by the Seller or the originator
of such Mortgage Loan, without recourse in the following form: "Pay to the
order of _________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller, or, if the original Mortgage Note has been lost or destroyed and
not replaced, an original lost note affidavit from the Seller, stating that
the original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;
(ii) in the case of each [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];
H-1
(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 Certificates, Series 2002-2, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of June 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 June 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, and The Bank of New York, as Trustee.
Capitalized terms used, but not defined herein or in Exhibit 1 hereto, shall
have the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee.
2. The Transferee is not an employee benefit plan that is subject to
Title I of ERISA or to Section 4975 of the Internal Revenue Code of 1986, nor
is it acting on behalf of or with plan assets of any such plan. The Transferee
is, as of the date hereof, and will be, as of the date of the Transfer, a
Permitted Transferee. The Transferee 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
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 includable 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.
I-4
Section 5.02(c) of the Agreement
--------------------------------
(c) Each Person who has or who acquires any Ownership Interest in a Class
A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Class A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Class A-R Certificate unless, 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
I-5
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.
I-6
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE FOR CLASS A-R CERTIFICATES
Date:
CWABS, Inc.
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset Backed
Certificates, Series 2002-2
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 June 1, 2002, among CWABS, Inc., as Depositor, Countrywide Home
Loans, Inc., as Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, Federal National Mortgage Association, as Guarantor, and The Bank of
New York, as Trustee.
Very truly yours,
__________________________________
Name of Transferor
By: ______________________________
Name:
Title:
J-1
EXHIBIT K
[date]
Xxxxxx Mae
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxxx, XX 00000
Dear Sir:
Reference is hereby made to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of June 1, 2002, among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as Seller, Federal National
Mortgage Association, as Guarantor, Countrywide Home Loans Servicing LP, as
Master Servicer, and The Bank of New York, as Trustee. All capitalized terms
used herein but not defined herein shall have the meanings assigned to them in
Pooling and Servicing Agreement.
The undersigned, an officer of the Trustee, hereby certifies to you that
the Trustee has complied with the REMIC Provisions for the preceding calendar
year.
THE BANK OF NEW YORK
By:________________________
Name:______________________
Title:_____________________
K-1
EXHIBIT L
Xxxxxx Xxx Form with respect to Relief Act Interest Shortfalls
L-1
EXHIBIT M
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
Officer's Certificate
Asset-Backed Certificates, Series 2002-2
[Date]
Via Facsimile
The Bank of New York
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pre-Payments
Dear Sir or Madam:
__________________ hereby certifies that he/she is an officer of the
Master Servicer, holding the office set forth beneath his/her name and hereby
further certifies as follows:
With respect to the Mortgage Loans set forth in the attached
schedule:
1. A Principal Prepayment in full was received during the related Due
Period;
2. Any prepayment penalty due under the terms of the Mortgage Note with
respect to such Principal Prepayment in full was received from the
mortgagor and deposited in the Certificate Account;____ Yes ____ No
3. As to each Mortgage Loan so noted on the attached schedule, all or part
of the prepayment penalty required in connection with the Principal
Prepayment in full was waived based upon (Circle one): (i) the Master
Servicer's determination that such waiver would maximize recovery of
Liquidation Proceeds for such Mortgage Loan, taking into account the
value of such prepayment penalty, or (ii)(A) the enforceability thereof
be limited (1) by bankruptcy insolvency, moratorium, receivership, or
other similar law relating to creditors' rights generally or (2) due to
acceleration in connection with a foreclosure or other involuntary
payment, or (B) the enforceability is otherwise limited or prohibited by
applicable law;
4. We certify that all amounts due in connection with the waiver of a
prepayment penalty inconsistent with number 3 above which are required to
be deposited by the Master Servicer pursuant to Section 3.20 of the
Pooling and Servicing Agreement, have been or will be so deposited.
M-1
Capitalized terms used herein shall have the meanings ascribed to
such terms in the Pooling and Servicing Agreement dated as of June 1, 2002
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, Federal National
Mortgage Association, as Guarantor, and The Bank of New York, as Trustee.
COUNTRYWIDE HOME LOANS SERVICING LP
By:
--------------------------------
Name:
Title:
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 2002-2
__________________________________________ 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 June 1, 2002 (the "Pooling and Servicing
Agreement"), relating to the CWABS, Inc. Asset-Backed Certificates, Series
2002-2 (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.
(iii) 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]
BNP Paribas
BNP PARIBAS, PARIS
[address]
[phone]
DATE: [Month] [Date] [Year]
TO: Countrywide Home Loans, Inc.
ATTENTION:
TELEPHONE: [Phone]
FACSIMILE: [Fax]
FROM: Derivatives Documentation
TELEPHONE: [Phone]
FACSIMILE: [Fax]
SUBJECT: Fixed Income Derivatives Confirmation and
Agreement
REFERENCE NUMBER: ____ - 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 BNP Paribas, Paris ("BNP") 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.
5. 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: [o]
Countrywide Home Loans, Inc.
June [o], 2002
Page 2 of 13
6. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Rate Cap
Notional Amount: Shall equal:
(i) USD ___ for the initial Calculation
Period, and
(ii) the amount as detailed in the
Schedule of Notional Amounts
attached hereto.
Trade Date: [Month] [Date], [Year]
Effective Date: [Month] [Date], [Year]
Termination Date: [Month] [Date] [Year], subject to
adjustment in accordance with the
Business Day Convention.
Fixed Amount (Premium): _____
Counterparty
[Month][Date][Year]
USD _____
Floating Amounts:
BNP
___%
The 25th calendar day of each month
during the Term of this Transaction,
commencing [Month][Date][Year] and
ending on the Termination Date,
subject to adjustment in accordance
with the Business Day Convention.
R-2
Reference Number: [o]
Countrywide Home Loans, Inc.
June [o], 2002
Page 3 of 13
Each Payment shall be applicable.
The Floating Rate Payment Date
shall be one Business day preceding
each Floating Rate Payer Period End
Dates.
USD-LIBOR-BBA
___ month
___/___
The first day of each Calculation
Period
Inapplicable
Business Days: New York and London
Business Day Convention: Modified Following
Calculation Agent: BNP
7. 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.
8. 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 BNP or Counterparty for any
purpose.
R-3
Reference Number: [o]
Countrywide Home Loans, Inc.
June [o], 2002
Page 4 of 13
(b) "Specified Transaction" is not applicable to BNP or Counterparty for any
purpose, and, accordingly, Section 5(a)(v) shall not apply to BNP or
Counterparty.
(c) The "Cross Default" provisions of Section 5(a)(vi) will not apply to BNP
or to Counterparty.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to BNP or Counterparty.
(e) The "Automatic Early Termination" provision of Section 6(a) will not
apply to BNP 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 BNP 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)
BNP 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 BNP as the Affected Party.
R-4
Reference Number: [o]
Countrywide Home Loans, Inc.
June [o], 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 Form/Document/Certificate Date by which to be
document delivered
BNP and the Counterparty Any document required or Promptly after the earlier of (i)
reasonably requested to allow reasonable demand by either
the other party to make party or (ii) learning that such
payments under this form or document is required
Agreement without any
deduction or withholding for
or on the account of any Tax
or with such deduction or
withholding at a reduced
rate
Party required to Form/Document/ Date by which to Covered by Section
deliver document Certificate be delivered 3(d) Representation
BNP and the Any documents required Upon the execution Yes
Counterparty by the receiving party to and delivery of this
evidence the authority of Agreement and
the delivering party or its such Confirmation
Credit Support 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: [o]
Countrywide Home Loans, Inc.
June [o], 2002
Page 6 of 13
BNP and the A certificate of an Upon the execution and Yes
Counterparty authorized officer of the delivery of this
party, as to the Agreement and
incumbency and authority such Confirmation
of the respective officers
of the party signing this
Agreement, any relevant
Credit Support Document,
or any Confirmation,
as the case may be
(3) BNP 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 BNP:
Address: [Address]
Attention: _________
Facsimile: [Fax]
with a copy to:
Address: [Address]
Attention: ___________
Facsimile: [Fax]
(For all purposes)
Address for notices or communications to the Counterparty:
Address: [Address]
Attention: __________
Facsimile: [Fax]
Phone: [Phone]
(b) Process Agent. For the purpose of Section 13(c):
BNP appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
R-6
Reference Number: [o]
Countrywide Home Loans, Inc.
June [o], 2002
Page 7 of 13
(c) Offices. The provisions of Section 10(a) will not apply to this
Agreement; neither BNP nor the Counterparty have any Offices other than
as set forth in the Notices Section and BNP 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:
BNP is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BNP.
(f) Credit Support Document. Not applicable for either BNP or the Counterparty.
(g) Credit Support Provider.
BNP: 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: [o]
Countrywide Home Loans, Inc.
June [o], 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) BNP 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 BNP 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 BNP IS AN OBLIGOR OR A
CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.
R-8
Reference Number: [o]
Countrywide Home Loans, Inc.
June [o], 2002
Page 9 of 13
9. Account Details and
Settlement Information: Payments to BNP:
[_______]
ABA Number: _______ , for the account
of [_______]
Account Number: _________ , for further
credit to [_______]
Sub-account Number: _________
Attention: [_______]
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 BNP a facsimile of the fully-executed
Confirmation to [___________]. For inquiries regarding U.S. Transactions,
please contact [NAME] by telephone at [___________]. For all other inquiries
please contact [NAME] by telephone at [___________]. Originals will be
provided for your execution upon your request.
R-9
Reference Number: [o]
Countrywide Home Loans, Inc.
June [o], 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,
BNP PARIBAS, PARIS
By:______________________________
Name:
Title:
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
COUNTRYWIDE HOME LOANS, INC.
By:______________________________
Name:
Title:
(Authorized Signatory)
cc:
R-10
Reference Number: [o]
Countrywide Home Loans, Inc.
June [o], 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
July 25, 2002
July 25, 2002 August 25, 2002
August 25, 2002 September 25, 2002
September 25, 2002 October 25, 2002
October 25, 2002 November 25, 2002
November 25, 2002 December 25, 2002
December 25, 2002 January 25, 2003
January 25, 2003 February 25, 2003
February 25, 2003 June 25, 2003
June 25, 2003 April 25, 2003
April 25, 2003 May 25, 2003
May 25, 2003 June 25, 2003
June 25, 2003 July 25, 2003
July 25, 2003 August 25, 2003
August 25, 2003 September 25, 2003
September 25, 2003 October 25, 2003
October 25, 2003 November 25, 2003
November 25, 2003 December 25, 2003
December 25, 2003 January 25, 2004
January 25, 2004 February 25, 2004
February 25, 2004 June 25, 2004
June 25, 2004 April 25, 2004
April 25, 2004 May 25, 2004
May 25, 2004 June 25, 2004
June 25, 2004 July 25, 2004
July 25, 2004 August 25, 2004
August 25, 2004 September 25, 2004
September 25, 2004 October 25, 2004
October 25, 2004 November 25, 2004
November 25, 2004 December 25, 2004
December 25, 2004 January 25, 2005
January 25, 2005 February 25, 2005
February 25, 2005 June 25, 2005
June 25, 2005 April 25, 2005
April 25, 2005 May 25, 2005
May 25, 2005 June 25, 2005
June 25, 2005 July 25, 2005
R-11
Reference Number: [o]
Countrywide Home Loans, Inc.
June [o], 2002
Page 12 of 13
Applicable Notional
From and including To but excluding Amount (USD)
-------------------------------- -------------------------- ----------------------------
July 25, 2005 August 25, 2005
August 2, 2005 September 25, 2005
September 25, 2005 October 25, 2005
October 25, 2005 November 25, 2005
November 25, 2005 December 25, 2005
December 25, 2005 January 25, 2006
January 25, 2006 February 25, 2006
February 25, 2006 June 25, 2006
June 25, 2006 April 25, 2006
April 25, 2006 May 25, 2006
May 25, 2006 June 25, 2006
June 25, 2006 July 25, 2006
July 25, 2006 August 25, 2006
August 25, 2006 September 25, 2006
September 25, 2006 October 25, 2006
October 25, 2006 November 25, 2006
November 25, 2006 December 25, 2006
December 25, 2006 January 25, 2007
January 25, 2007 February 25, 2007
February 25, 2007 June 25, 2007
June 25, 2007 April 25, 2007
April 25, 2007 May 25, 2007
May 25, 2007 June 25, 2007
June 25, 2007 July 25, 2007
July 25, 2007 August 25, 2007
August 25, 2007 September 25, 2007
September 25, 2007 October 25, 2007
October 25, 2007 November 25, 2007
November 25, 2007 December 25, 2007
December 25, 2007 January 25, 2008
January 25, 2008 February 25, 2008
February 25, 2008 June 25, 2008
June 25, 2008 April 25, 2008
April 25, 2008 May 25, 2008
May 25, 2008 June 25, 2008
June 25, 2008 July 25, 2008
July 25, 2008 August 25, 2008
August 25, 2008 September 25, 2008
September 25, 2008 October 25, 2008
October 25, 2008 November 25, 2008
November 25, 2008 December 25, 2008
December 25, 2008 January 25, 2009
R-12
Reference Number: [o]
Countrywide Home Loans, Inc.
June [o], 2002
Page 13 of 13
Applicable Notional
From and including To but excluding Amount (USD)
-------------------------------- -------------------------- ----------------------------
January 25, 2009 February 25, 2009
February 25, 2009 June 25, 2009
June 25, 2009 April 25, 2009
April 25, 2009 May 25, 2009
May 25, 2009 June 25, 2009
June 25, 2009 July 25, 2009
July 25, 2009 August 25, 2009
August 25, 2009 September 25, 2009
September 25, 2009 October 25, 2009
October 25, 2009 November 25, 2009
November 25, 2009 December 25, 2009
December 25, 2009 January 25, 2010
January 25, 2010 February 25, 2010
February 25, 2010 June 25, 2010
June 25, 2010 April 25, 2010
April 25, 2010 May 25, 2010
May 25, 2010 June 25, 2010
June 25, 2010 July 25, 2010
July 25, 2010 August 25, 2010
August 25, 2010 September 25, 2010
September 25, 2010 October 25, 2010
October 25, 2010 November 25, 2010
November 25, 2010 December 25, 2010
December 25, 2010 January 25, 2011
January 25, 2011 February 25, 2011
February 25, 2011 June 25, 2011
June 25, 2011 April 25, 2011
April 25, 2011 May 25, 2011
May 25, 2011 June 25, 2011
June 25, 2011 July 25, 2011
July 25, 2011 August 25, 2011
August 25, 2011 September 25, 2011
September 25, 2011 October 25, 2011
October 25, 2011 November 25, 2011
November 25, 2011 Termination Date
R-13
EXHIBIT S
[FORM OF CAP CONTRACT ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of June 28, 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 2002-2 ("Assignee"), pursuant to a Pooling
and Servicing Agreement dated as of June 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, Xxxxxx Xxx,
and BNP Paribas by and through its authorized agent BNP Paribas Securities
Corp. ("Remaining Party").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, effective as of June 28, 2002, Assignor desires to assign
all of its rights and delegate all of its duties and obligations to Assignee
under those certain Transactions (the "Assigned Transactions") as evidenced by
those certain confirmations dated June 18, 2002 whose BNP Paribas reference
numbers are 324820 and 324818 (the "Confirmations"), copies of which are
attached hereto as Exhibits I and II;
WHEREAS, Assignor and Remaining Party executed and delivered the
Confirmations in connection with an ISDA Master Agreement
(Multicurrency--Cross Border) form (the "ISDA Form Master Agreement") dated as
of May 26, 1996;
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 that may be agreed to by
Assignee and Remaining Party; 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 June 28, 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.
2. ISDA Form Master Agreement. Assignor and Remaining Party agree that as
of the Effective Date (a) the terms and provisions of an ISDA Master Agreement
(Multicurrency-
S-1
Cross Border) form as published by the International Swaps and Derivatives
Association, Inc. shall be deemed incorporated by reference into the
Confirmations as if fully set forth therein and will govern the Confirmations
and (b) with respect to the Confirmations, the fourth full paragraph on the
first page thereof beginning with the words "This Confirmation Supplement
Forms Part of..." is hereby deemed deleted in its entirety.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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
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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.
8. Governing Law. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York (exclusive of
its conflicts of laws principles).
9. Notices. For the purposes of this Assignment Agreement and Section
12(a) of the ISDA Form Master Agreement 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, 000 Xxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust MBS Administration, CWABS, Series 2002-2 or such
other address as may be hereafter furnished in writing to Assignor and
Remaining Party; and (iii) in the case of Remaining Party,
Address: BNP Paribas, 00 Xxxxxxxxx xxx Xxxxxxxx, 00000 Xxxxx, Xxxxxx
Attention: BFI/BOLTIT
Telex No. 282919 Answerback: BNP 282919F
copy to: BNP Paribas, 00 Xxxxxxxx Xxxxxx, Xxxxxx XX0 0XX, Xxxxxxx
Attention: Legal and Transaction Management Group
Telex No: 296723 Answerback: PARCAP
Electronic Messaging System Details: BPCMGB2X
(For all purposes)
such other address as may be hereafter furnished in writing to Assignor and
Assignee.
10. Payments. All payments remitted by Remaining Party under the Assigned
Transaction shall be made by wire transfer according to the following
instructions:
Bank of New York
New York, NY
ABA # 000-000-000
GLA # 111-565
For Further Credit: TAS A/C 082008
Attn: Xxxxx X. Xxxxxxx: (000) 000-0000
11. Counterparts. This Assignment Agreement may be executed and delivered
in counterparts (including by facsimile transmission), each of which when
executed shall be deemed to be an original but all of which taken together
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement
as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
THE BANK OF NEW YORK, NOT IN AN INDIVIDUAL
CAPACITY, BUT AS TRUSTEE FOR CWABS, INC.
ASSET BACKED CERTIFICATES, SERIES 2002-2
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
BANK PARIBAS
BY: BNP PARIBAS SECURITIES CORP., as its
agent and on its behalf
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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